Self-employment tax in Texas
Good news for Texas freelancers: Texas has no state income tax. That means as a 1099 contractor or sole proprietor you only owe federal self-employment tax and federal income tax — nothing to the state on your earnings.
What a Texas freelancer owes
- No Texas state income tax on your freelance or 1099 income.
- You still owe federal self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare).
- Plus federal income tax based on your bracket, minus the deductible half of SE tax.
Estimate your Texas taxes
Free 1099 self-employment tax calculator. No sign-up.
Texas has no state income tax, so this federal estimate is your full bill.
States with no income tax are set to 0%. Estimate only — adjust for local taxes.
Estimates use 2026 US federal figures (IRS Rev. Proc. 2025-32): self-employment tax of 15.3% (12.4% Social Security up to the $184,500 wage base + 2.9% Medicare) plus federal income tax on your net profit after the standard deduction. State and local taxes are only included if you set a state rate above. Simplified estimate for planning only — not tax advice.
Guide: Self-employment tax in Texas — one tax bill, not two
Texas is one of the simplest states in America to be self-employed, tax-wise. There is no state income tax — no state return for your self-employment income, no state estimated payments, no second calendar to track. Everything in this guide is about your one remaining obligation: the federal bill.
That federal bill has two parts. First, self-employment tax of 15.3% on 92.35% of your net profit, covering Social Security and Medicare. Second, federal income tax on your profit after deducting half of your SE tax and taking deductions you qualify for, such as the standard deduction and the qualified business income deduction. You pay both through quarterly estimated payments to the IRS using Form 1040-ES, due mid-April, mid-June, mid-September, and mid-January. The IRS expects you to pay as you earn; waiting until you file in April usually means an underpayment penalty on top of the tax.
What about the Texas franchise tax you may have heard about? It applies to most LLCs, corporations, and other formal entities — not to sole proprietors or general partnerships owned directly by individuals. And even for entities, no franchise tax is due below a generous revenue threshold (over $2.4 million in recent years), though a no-tax-due information report may still need to be filed. If you stay a sole proprietor, none of this applies to you. Local obligations are lighter still: some cities require permits for certain trades, and if your business owns equipment, your county may tax business personal property — but there is no Texas tax on your self-employment income itself.
Worked example. A Houston electrician working as a sole proprietor nets $75,000. SE tax: $75,000 × 92.35% × 15.3% ≈ $10,598. Federal income tax, after the half-SE-tax deduction and standard deduction, might come to roughly $7,000–$8,000 depending on filing status. Total federal bill: around $18,000, or about $4,500 per quarterly payment. State bill: $0.
Simple does not mean automatic. Your quarterly payments are only right if your profit figure is right, which means every expense captured. MoneyFeed is a WhatsApp tool that works with your existing bookkeeping app — text an expense or snap a receipt photo in chat and get clean, categorized records back, exportable as CSV, Excel, or PDF. Your bookkeeping app, now on WhatsApp. Text It. Snap It. Books Ready.
FAQ
No. Texas has no state income tax for individuals, so self-employed Texans owe only federal self-employment tax and federal income tax on their profit.
No. There are no Texas estimated income tax payments. Your only quarterly obligation is to the IRS, using Form 1040-ES.
It is a state tax on most business entities such as LLCs and corporations. Sole proprietors and general partnerships owned directly by individuals are exempt. Entities below the revenue threshold (over $2.4 million in recent years) owe no tax, though an information report may still be required.
With no state income tax, many set aside 20–25% of profit for the combined federal bill. Higher earners should plan on more. Base the figure on your profit after expenses, not your gross income.
Yes — a federal one. Most sole proprietors report business profit on Schedule C and self-employment tax on Schedule SE as part of their Form 1040.
Texas freelancer tax — FAQ
Do freelancers pay state income tax in Texas?
No. Texas is one of a handful of US states with no personal state income tax, so your 1099 / self-employed income is not taxed at the state level.
What taxes do I still owe as a Texas freelancer?
Federal self-employment tax (15.3%) and federal income tax. Many Texas freelancers also make quarterly estimated federal payments to avoid IRS penalties.
How do I estimate my Texas 1099 taxes?
Use MoneyFeed's free 1099 tax calculator — since Texas has no state tax, your federal estimate is essentially your full tax bill.
Figures are 2026 headline guidance for freelancers and the self-employed, not tax advice. Check current IRS and state rules or a CPA for your situation.