Texas tax notes
- No state income tax. Higher property tax rate (1.81% on average) and high sales tax (8.2% combined avg) compensate.
- Annual Texas Franchise Tax on businesses with > $2.47M in revenue (2025).
- Homestead exemption + Sec. 25.18 caps annual assessment increases on primary residences.
Sample tax numbers for Texas
Quick orientation — use the full calculator for your actual situation.
Tax moves that matter most for Texas
Texas has no state income tax, so SALT cap concerns are limited to property tax. Optimization focus shifts to federal: 401(k), Mega Backdoor Roth, HSA, S-Corp election for self-employed.
At nearly twice the national average, property tax dominates the SALT cap calculation in Texas. Bunching property tax payments (paying 18 months in one calendar year) can sometimes push you above the standard deduction in alternating years.
At net SE income above ~$80k-$100k, electing S-Corp typically saves $5k-$15k/yr in self-employment tax — the math is largely federal but affects Texas state tax via PTET (if applicable).
If you have 1099 income, Solo 401(k) lets you contribute up to $70,000/yr (2025) — far more than SEP-IRA in most cases. Reduces both federal and Texas state income tax.
Run your Texas numbers
Open the full optimizer with Texas pre-selected to see your specific tax picture.
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