Best US Cities for 1099 Workers (2026 Guide)

A remote 1099 worker is one of the few populations that can rationally optimize where they live based on the same factors that drive corporate site-selection decisions: tax burden, cost of living, housing supply, and infrastructure. Most W-2 workers are tethered to their employer's geography. Most retirees are tethered to family. Freelancers carry their income with them — and the difference between living in San Francisco versus Austin, all else equal, is roughly $30,000–$60,000 per year in after-tax purchasing power for a freelancer earning $150,000.

This guide ranks US cities for self-employed Americans using the factors that actually move the needle for this population: state income tax, housing cost relative to income, healthcare marketplace quality (1099 workers buy ACA plans individually), internet and coworking infrastructure, and domicile-establishment ease. The rankings are organized into tiers; within each tier, the order is alphabetical because precise rank order is sensitive to your personal weighting.

What actually matters for 1099 workers

The standard "best places to live" lists from Forbes or Money magazine weight school quality, crime rates, and walkability heavily. Those matter — but the freelancer-specific factors are different:

1. State income tax — the largest single delta. A 9% California top bracket vs 0% Texas means $13,500 extra in your pocket on $150k of net SE income. Over a 10-year stay, that's $135,000.
2. Housing cost as % of income — varies 4x between expensive coastal cities and Midwest/South alternatives. Rent or mortgage at 25% of income leaves room for retirement saving; at 50% it doesn't.
3. Cost of living broadly — groceries, transportation, utilities, healthcare premiums. Often correlated with housing but with regional quirks (utilities are cheap in TX, expensive in CA).
4. Healthcare marketplace quality — state-based exchanges (CA, NY, MA, WA, CO) typically have better plan selection and customer service than federal healthcare.gov states. Premiums vary 3x between markets.
5. Internet and coworking infrastructure — gigabit residential, multiple ISP options, coworking spaces within 10 minutes. Critical for remote work.
6. Domicile-establishment friction — getting a driver's license, voter registration, and establishing residency. Some states make this easy (TX, FL); others audit aggressively (CA, NY).
7. Climate and lifestyle preferences — sun vs seasons, urban vs suburban, single vs family. Real but unranked here.

The nine no-income-tax states — the baseline

Nine US states levy no income tax on earned income (2026):

• Alaska — no income tax, no statewide sales tax. Climate hostile to remote workers; small population.
• Florida — no income tax, 6% state sales tax. Hurricanes and humidity.
• Nevada — no income tax, 6.85% sales tax. Las Vegas concentration; some rural depopulation areas.
• New Hampshire — no income tax on earned income; 5% tax on interest/dividends being phased out by 2027. High property taxes.
• South Dakota — no income tax. Sparse population but established domicile-services industry (RVers and remote workers).
• Tennessee — no income tax. 7% state sales tax + local. Nashville is one of the hottest 1099 destinations.
• Texas — no income tax. 6.25% state sales tax + up to 2% local. High property taxes (1.6–2.5%). Multiple metro options (Austin, Houston, Dallas, San Antonio).
• Washington — no income tax. 6.5% state sales tax. Watch out: Seattle's local Business and Occupation tax (B&O) applies to gross receipts even with no state income tax.
• Wyoming — no income tax, 4% state sales tax. Very sparse; few major metros.

For a freelancer earning $150,000, moving from California (9.3% marginal) to any no-income-tax state saves roughly $13,000–$14,000/year in state income tax. That's the baseline savings before any housing or COL adjustment.

Use our state tax compare calculator to see your specific savings, or the cost of living calculator for combined housing + tax delta.

Tier 1: best overall for 1099 workers

Austin, Texas

State income tax: 0%. Housing: moderate-to-high — median home $560k (2026), up substantially from a decade ago but still 60% cheaper than SF Bay Area. Healthcare: Texas uses federal healthcare.gov; plan selection is OK, not great. Infrastructure: excellent — gigabit residential ubiquitous, dozens of coworking spaces, strong tech labor market for client-facing work. Climate: hot summers (90s°F, 4 months), mild winters. Negatives: property tax is 2–2.5% of value (high), no state income tax means high reliance on property/sales tax, traffic congestion, summer heat domes.

Austin is the de facto headquarters of the remote-tech-freelancer migration. The combination of zero state income tax, deep client pipeline, and lifestyle amenities makes it the standard against which other cities are measured.

Nashville, Tennessee

State income tax: 0% (Hall tax fully phased out 2021). Housing: moderate — median home $475k. Healthcare: Tennessee uses healthcare.gov; selection varies by county. Infrastructure: gigabit + strong fiber buildout, growing coworking scene. Climate: hot summers, four real seasons, occasional ice storms. Negatives: 7% sales tax (high), property tax 0.6% (low, partial offset), some sprawl.

Nashville has the lowest combined cost of living among Tier-1 freelancer cities and benefits from the country-music-tourism economy diversifying its base. Excellent option for freelancers prioritizing housing affordability.

Tampa / St. Petersburg, Florida

State income tax: 0%. Housing: moderate — median home $415k (Tampa proper), lower in suburbs. Healthcare: federal healthcare.gov; plan selection varies. Infrastructure: good — gigabit available in most neighborhoods, ample coworking. Climate: warm year-round, hurricane risk June-November. Negatives: 6% state sales tax + 1–2% local, property insurance has spiked 30–50% in the last 3 years due to hurricane and flood risk, occasional hurricane disruption.

Tampa edges out Miami for 1099 workers because housing is 30% cheaper while still offering Florida's no-income-tax structure. The healthcare market is weaker than larger metros but acceptable.

Las Vegas / Henderson, Nevada

State income tax: 0%. Housing: moderate-low — median home $445k. Healthcare: federal healthcare.gov; Nevada market is OK but smaller. Infrastructure: good — gigabit widespread, decent coworking. Climate: very hot summers (100°F+), mild winters. Negatives: 8.375% combined sales tax (highest in Tier-1), aridity (water restrictions are real), tourism-dependent local economy.

Henderson (suburban Las Vegas) is the freelancer-friendly variant — quieter, more residential, lower crime than the Strip area. Combined state tax savings + lower-than-California housing make it competitive.

Tier 2: high quality of life with modest tax bite

Denver / Boulder, Colorado

State income tax: 4.4% flat. Housing: high — median home $625k (Denver), $850k+ (Boulder). Healthcare: Connect for Health Colorado state exchange — high quality, multiple insurers. Infrastructure: excellent — gigabit, multiple ISPs, strong coworking. Climate: dry, sunny year-round, 300 days/year sun, four seasons.

The 4.4% flat tax is the lowest among states with any income tax. Colorado's "TABOR" amendment caps how much the state can collect, creating periodic refunds. Healthcare exchange is among the best in the country.

Raleigh / Durham / Chapel Hill, North Carolina (the Research Triangle)

State income tax: 4.5% flat (declining to 4.25% by 2027 per current legislation). Housing: moderate-high — median $475k. Healthcare: federal healthcare.gov; Triangle has strong hospital systems. Infrastructure: excellent — Research Triangle Park, universities provide gigabit + coworking density. Climate: humid summers, mild winters.

The Triangle benefits from a university-research-anchor economy that keeps housing and labor costs reasonable. NC's flat tax structure is simpler than graduated-bracket states.

Salt Lake City, Utah

State income tax: 4.55% flat. Housing: moderate — median $525k. Healthcare: federal healthcare.gov. Infrastructure: good — fiber buildout in progress, decent coworking. Climate: four seasons, dry, snow-skiable winters.

SLC's growth has been quieter than Austin's but the fundamentals are strong: low cost of living, immediate access to outdoor recreation, growing tech industry. The Latter-Day Saints cultural overlay is real but not restrictive for non-members.

Charlotte, North Carolina

State income tax: 4.5% (same as Triangle). Housing: moderate — median $445k. Healthcare: healthcare.gov. Infrastructure: banking-industry-anchored, strong residential broadband, growing coworking. Climate: humid summers, mild winters.

Often overlooked vs Raleigh-Durham but offers similar tax structure with slightly lower housing. Banking industry presence means commercial real estate and business services are mature.

Phoenix / Scottsdale, Arizona

State income tax: 2.5% flat (one of the lowest non-zero rates). Housing: moderate — median $465k Phoenix, $725k Scottsdale. Healthcare: healthcare.gov. Infrastructure: good — gigabit ubiquitous, coworking concentrated in Scottsdale and downtown Phoenix. Climate: extreme summer heat (110°F+, 3 months), mild winters.

Arizona's 2.5% flat tax is the lowest among states with any income tax. Phoenix metro is one of the fastest-growing US areas.

Tier 3: high-cost but worth-it for specific freelancers

Seattle / Bellevue, Washington

No income tax + strong tech job market + Pacific Northwest lifestyle. Major caveat: housing is $850k+ median home, and the state's high sales + property + B&O business taxes claw back some of the income-tax savings. Best for freelancers with established Seattle-area clients or strong outdoor-lifestyle preference.

Boston, Massachusetts

State income tax 5% flat + 4% "millionaire surtax" above $1M. Massachusetts state-based healthcare exchange is the original ACA model and remains best-in-class. World-class universities, strong consulting and healthcare client base. Housing is brutal ($875k+ median home). Worth it for freelancers with Boston-anchored client relationships.

New York City (Brooklyn, Queens, lower Manhattan)

State income tax + NYC city income tax stacks to 10–13.5% for top earners. The most aggressive audit jurisdiction in the country. Worth it ONLY for freelancers whose client work absolutely requires NYC presence — finance, media, fashion, certain creative industries. Otherwise the tax burden makes it net-negative.

Skip list: where 1099 workers are net-disadvantaged

California (most metros)

California has the highest state income tax (top bracket 12.3% + 1% mental health surcharge = 13.3% for top earners). Combined with high housing (SF Bay Area medians $1.4M+, LA $850k+) and aggressive audits, the math rarely works for freelancers earning $100k+ who have no California-specific client tie. Exception: high-earning tech freelancers with Bay Area client networks may still find the cost worth the access. For everyone else, leaving California typically saves $30–80k/year in combined tax + housing relative to comparable lifestyle elsewhere.

New York State (outside NYC city tax zone)

Upstate New York has lower housing but the state income tax is still 4–10.9% (graduated). Property taxes are among the highest in the country (2–3% in many counties). Healthcare is excellent (state-based exchange) but overall tax burden is high.

New Jersey

State income tax 1.4–10.75%, property tax averaging 2.2% (highest in nation), and proximity-to-NYC pricing on housing. Worth it for freelancers commuting to NYC for client work (avoids NYC city income tax). Otherwise: pass.

Hawaii

Top bracket 11%, housing 50% above mainland averages, transport costs high due to island logistics. Beautiful but expensive on a freelancer income. Best for retirees, not active freelancers.

Oregon

9.9% top state income tax + Portland metro income tax surcharge for high earners. Combined with growing housing costs ($550k+ Portland median), the math has weakened over the last decade. Still viable for freelancers prioritizing climate and outdoor lifestyle, but not the no-brainer it was in the 2010s.

Domicile rules — what makes you a resident

Changing states isn't just buying a house there. To establish residency for tax purposes:

• Driver's license — get one in your new state within 30–60 days of moving.
• Voter registration — register in your new state, deregister from the old.
• Primary residence — the address you spend the most time at. If you keep a house in California, that's still your primary unless you sell or rent it out.
• 183-day rule — most states consider you a resident if you spend 183+ days there in a year. The flip side: spending 183+ days in your old state can still make you a resident even if you've "moved."
• Bank accounts, professional licenses, business filings — update all to your new state.
• Religious, social, club, vehicle registrations — these are tertiary signals but California's residency auditors look at all of them.

The hardest case: you "move" from California to Texas but maintain a vacation home in California, your spouse stays in the California house for several months a year, and you continue to vote in California elections. California's Franchise Tax Board has won residency disputes against people who thought they'd moved away. The standard is "domicile" + "183 days," and both have to align.

Audit risk — California and New York are aggressive

If you're leaving California (or NYC) and you have substantial income, expect potential scrutiny in the years following the move. The state will look for:

• How much time you actually spent in the state (cell phone records, credit card transactions, social media check-ins)
• Whether you continued business operations in the state
• Whether you owned property there
• Whether family stayed behind
• Where your "social and economic life" was centered

For freelancers earning $200k+ leaving high-tax states, talking to a CPA before the move is worth $500–$1,500 in fees to avoid potentially $20k+ in residency-disputed taxes. Get a "domicile-change checklist" and follow it.

Healthcare market quality by state

For 1099 workers buying ACA marketplace plans, the state's exchange matters more than W-2 workers realize:

• Best (state-based exchanges) — Massachusetts (MAHealth), California (Covered California), New York (NY State of Health), Washington (Washington Healthplanfinder), Colorado (Connect for Health Colorado). Multiple insurers, extensive plan selection, strong customer service.
• Mid-tier (federal healthcare.gov) — Texas, Florida, Georgia, North Carolina, Tennessee. Adequate plan selection but variable by county.
• Weakest markets — Wyoming, Alaska, parts of West Virginia. Often only 1–2 insurers participating.

The tax-savings calculation for moving from California to Texas often ignores that California's state exchange might give you better healthcare options. If you have ongoing medical needs, factor this in.

Worked examples

SF Bay Area → Austin (freelancer earning $150,000 net SE):

• State income tax savings: ~$13,500/year (from ~9% California marginal to 0% Texas)
• Housing savings: median home $1,400k SF → $560k Austin = $840k less down + much lower monthly
• Healthcare: slightly worse marketplace in TX, ~$1,000/year more expensive premium
• Property tax: TX 2.2% vs CA 1.1% — partial offset (~$5k/year more if you buy)
• Total: net positive ~$8k–$15k/year ongoing + $400k–$800k of housing-asset savings

NYC → Tampa (freelancer earning $200,000 net SE):

• State + city tax savings: ~$22,000/year (from ~11% combined to 0%)
• Housing savings: median $1,200k NYC → $415k Tampa = $785k less to buy equivalent space
• Healthcare: NY exchange is excellent → FL healthcare.gov is mid-tier, ~$1,500/year more for similar plan
• Property insurance: Florida hurricane premium = ~$3,000/year more
• Net: ~$17k/year ongoing savings + housing-asset savings

LA → Las Vegas (freelancer earning $100,000 net SE):

• State tax savings: ~$5,500/year (from ~6% effective to 0%)
• Housing savings: $850k LA median → $445k Vegas = $405k less
• Healthcare: similar federal marketplace
• Net: ~$4–5k/year ongoing + housing-asset savings

Use our cost of living calculator to model your specific numbers.

Common mistakes to avoid

• Keeping a California / NY house "just in case." Maintaining a home in your origin state is the #1 way to lose a residency audit. Sell or fully convert to rental (with no personal use).
• Forgetting the spouse rule. If your spouse stays behind for kids' school or family reasons, your "joint" residency may still tie to the old state.
• Underestimating property tax in Texas / Florida. Texas property taxes (2–2.5% of value) on a $500k house = $10–12k/year. That's most of the income-tax savings gone if you stay 10 years.
• Ignoring sales tax in Tennessee. Tennessee's 9.55% combined state + local sales tax (highest in the country) eats into the no-income-tax savings for high-spend freelancers.
• Optimizing only for taxes. If you hate the new climate / city, you'll move back within 18 months and lose the savings to moving costs (~$5k–$20k each direction).
• Forgetting nexus for clients in the old state. If you keep California clients and travel there for in-person work, you may still owe California tax on the days you worked there. Track your travel days.
• Healthcare plan mismatch. Cancel your old state's healthcare plan correctly when you move. Some states require formal notice; failing to do so triggers tax-form complications.
• Forgetting to update business entity domicile. If you have an LLC, change its registered address to the new state (or maintain a registered agent in the old state if business operations stay there).

Frequently asked questions

How long do I need to live in the new state to "establish" residency?
Standard answer: 183 days plus domicile change (license, voter registration, primary home). Some states (FL) accept a "Declaration of Domicile" filed at the county level. Most states will start treating you as a resident the day you arrive if your old state's ties are fully cut.

What if I'm a digital nomad and don't have a fixed address?
Pick a low-tax state, get a mail-forwarding service there (e.g., Escapees in Texas, Americas Mailbox in South Dakota), and use that address for everything. Many full-time RVers and remote workers establish South Dakota residency this way.

Does my LLC's state matter for my taxes?
Yes. Single-member LLCs are disregarded entities for federal tax (income flows to your personal 1040), but state filing requirements follow the LLC's registered state. If you move from California to Texas and your LLC stays in California, you may still owe California LLC franchise tax ($800/year minimum) and have to file California state returns.

What about Puerto Rico's Act 60?
Puerto Rico offers a 4% effective federal income tax on bona fide PR residents (Act 60). Real benefit for high-earners but requires 183+ days/year in PR, Puerto Rican primary residence, severing US-mainland ties. Best for freelancers earning $300k+ who can genuinely relocate. Not a "tax trick" — IRS scrutiny is real.

What's the best state for a freelancer with kids in school?
Tier-1 cities (Austin, Nashville, Tampa) all have functional public school systems but performance varies dramatically by neighborhood. Research specific school districts before buying. The Triangle (NC) and Salt Lake City have above-average school quality.

Can I split my time between two states?
Technically yes, but pick one as your domicile (driver's license, voter registration, primary home). The other state becomes your "vacation home" and you may owe non-resident income tax for any income earned while physically there. Track days carefully — exceeding 183 in either state creates dual-residency claims.

I love California / NYC but the taxes are eating my net income. Anywhere to compromise?
For California: Lake Tahoe area straddles Nevada line; living on the Nevada side (Incline Village, Carson City) gives you California-proximity with Nevada tax. For NYC: northern Westchester or Connecticut puts you outside NYC city income tax but still commutable for in-person client work. Both are imperfect compromises.

The bottom line

For most freelancers earning $100k+ outside of a high-tax state with strong client ties, the geo-arb math is meaningful — typically $5,000 to $50,000/year in net savings, plus housing-asset differences that can reach hundreds of thousands of dollars over time.

The Tier-1 cities (Austin, Nashville, Tampa, Las Vegas) capture most of the upside while preserving urban amenities and client-pipeline access. Tier-2 cities (Denver, Raleigh, SLC) trade some tax savings for higher quality of life and stronger healthcare markets. Tier-3 cities (Seattle, Boston, NYC) are worth it only when client work demands the geography.

Run your specific math through our cost of living calculator and state tax compare calculator. Get a CPA consultation before the move if you're leaving California or New York with $200k+ income. And remember: the savings only matter if you actually like living in the new place.

Run the numbers for your actual situation before booking movers. The headline state-tax-rate delta is only about 30% of the real cost-of-living delta — housing usually dominates.

This article is for educational purposes only. It is not personalized tax, legal, or financial advice. Quarterly1099 is published by Vincent Roy and is not a CPA, EA, or licensed tax preparer. All content is sourced from IRS publications and current tax law. Fact-checked against IRS publications and 2026 Rev. Proc. 2025-32. For your specific situation, consult a licensed CPA or Enrolled Agent. See our full disclaimer.

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