Income tax
Texas state income tax (2026)
0%. Texas does not tax personal income, which includes 1099 / self-employment earnings. You file a federal return (Form 1040 + Schedule C + Schedule SE) but no state income return is required.
Texas · 1099 quarterly taxes · 2026
1099 Quarterly Taxes in Texas (2026)
Texas has no state income tax, which makes it one of the most tax-friendly states for self-employed Americans. But it doesn't mean you're off the hook — Texas freelancers still owe federal income tax and the full 15.3% self-employment tax. There's also a state-level franchise tax for some businesses.
Franchise tax
Texas franchise tax — does it apply to me?
The Texas franchise tax applies to LLCs, corporations, and partnerships earning above the "no-tax-due" threshold (currently $2.47 million in annual revenue). Most sole-proprietor freelancers and small LLCs are well below this threshold and owe nothing. However, you may still need to file a "no tax due" report annually if your entity is registered with the Texas Secretary of State.
Due dates
Federal quarterly payments — Texas-specific tips
Federal quarterly estimated tax due dates apply: April 15, June 15, September 15, 2026, and January 15, 2027. Pay through IRS Direct Pay (free) or mail Form 1040-ES with a check.
Because Texas residents have no state-level income tax to deduct, your federal AGI is your federal AGI — there's no state itemization layer to worry about. This makes Texas freelance tax planning unusually clean.
Deductions
Common Texas freelancer deductions
- Standard business expenses (home office, mileage, software, contractors).
- Half of SE tax (federal above-the-line deduction).
- QBI deduction — 20% of qualified business income, federal only.
- SEP-IRA and Solo 401(k) contributions.
- Self-employed health insurance premiums.
Sales tax —
Sales tax — separate from income tax
If you sell physical products or certain taxable services in Texas, you may owe state sales tax (6.25% state + up to 2% local). This is collected separately from income tax. Most service-based freelancers (writers, designers, developers, consultants) are not required to collect sales tax, but check the Texas Comptroller's taxable services list.
Franchise tax
Texas franchise tax — the $2.47M threshold (deeper dive)
Texas has no income tax but DOES have a franchise tax (sometimes called the "margin tax") that applies to LLCs, corporations, and certain partnerships. As of TY 2024+, the no-tax-due threshold is $2.47 million in annual revenue:
- Below $2.47M annual revenue: No franchise tax owed. Most LLCs no longer need to file a "No Tax Due Report" since 2024 — but you still need to file a Public Information Report (PIR) or Ownership Information Report (OIR) by May 15 each year, depending on entity type. Skipping required filings triggers $50 late penalty + 5% interest.
- $2.47M - $20M revenue: 0.375% (retail/wholesale) or 0.75% (most other businesses) on margin. Multiple deduction methods (70% of revenue, COGS, compensation) — pick the lowest.
- Sole proprietors with no LLC/corp: NOT subject to franchise tax. Schedule C only.
Most TX-based 1099 contractors are sole proprietors and never see this. But if you've formed an LLC for liability protection, you still need to file the annual PIR/OIR with the Texas Comptroller even with $0 revenue.
Texas sales tax
Texas sales tax for service freelancers
Most service freelancing (consulting, writing, design, photography) is NOT taxable for sales tax in Texas. But certain services are. Watch for these gray areas:
- Data processing services: Taxable. Includes web hosting, cloud services, some SaaS work performed for TX clients.
- Information services: Taxable.
- Real property repair/maintenance services: Taxable.
- Photography: Taxable as tangible personal property if you deliver prints/albums; typically not if delivery is digital-only.
- Writers, designers, software developers: Generally NOT taxable as long as you're producing intellectual property delivered electronically.
If you're in a taxable category, register with the Texas Comptroller for a sales tax permit and collect 6.25% state + up to 2% local (8.25% in most major cities).
Texas gig hubs
Texas gig hubs and freelance industries
Specific industry concentrations worth noting:
- Permian Basin oil & gas: Field engineers, drilling consultants, equipment operators. Often paid as 1099 with high day rates ($800-$2,500/day). Heavy mileage, heavy per diem, heavy meals — watch the 50% meal deduction limit. PPE and specialized clothing typically deductible.
- Austin tech freelancers: Software dev, design, marketing. CA refugees often arrive thinking TX has zero tax burden — true for income tax, but check the city business taxes (Austin has none for most freelancers, but property tax is high if you own a home office).
- Dallas finance/insurance: Many 1099 financial advisors and insurance agents. E&O insurance + license fees + continuing ed are key deductions.
- Houston energy/medical: Locum tenens physicians, energy consultants. Meal reimbursements at hospital cafeterias and oil-field camps create per-diem complexity.
Calculator
Try the calculator with Texas pre-selected
Run the Quarterly1099 calculator → (Texas state rate = 0%, so your bill is federal only.)