Texas Tax Calculator
Estimate your Texas tax burden for 2025: federal income tax, FICA, property tax, and how much you save vs. high-income-tax states.
🤠 What is the Texas Tax Calculator?
Texas is one of nine US states with no state income tax. Texas residents pay federal income tax and FICA (Social Security and Medicare) on their earnings, but pay zero dollars to the state of Texas on wages, salary, investment income, or retirement distributions. This fundamentally changes the tax picture for Texans compared to residents of high-income-tax states like California (up to 13.3%), New York (up to 10.9%), or New Jersey (up to 10.75%).
This calculator covers two aspects of the Texas tax picture. The Income Tax mode computes your federal income tax using 2025 IRS brackets, your FICA obligation, and shows a direct comparison of how much you save versus a California or New York resident earning the same income. A software engineer earning $150,000 in Austin pays zero TX state income tax, while the same engineer in San Francisco pays roughly $10,000 in CA state tax and SDI. In New York City, that engineer pays roughly $12,000 in combined NY state and NYC city tax. These savings often drive relocation decisions for high-income professionals.
The Property and Sales Tax mode addresses a common counterargument: Texas offsets its zero income tax with high property taxes and sales taxes. This is partially true. Texas average effective property tax rates run 1.60% to 2.15%, among the highest in the US. Combined sales tax reaches 8.25% in major cities. The calculator lets you input your home value and annual spending to estimate these local taxes and see your full Texas tax picture.
This calculator is designed for wage earners and salaried employees in 2025. Self-employed Texans also owe self-employment tax (15.3% on net earnings up to $176,100). Businesses with gross revenues above $2.47 million may owe Texas franchise tax. For complex situations including capital gains, rental income, or business ownership, consult a Texas CPA for a precise calculation.
📐 Formula
Total TX Tax = Tfederal + TFICA + $0state
Tfederal = Federal income tax using 2025 IRS brackets after $15,000 standard deduction (single) or $30,000 (married)
TFICA = Social Security 6.2% on first $176,100 + Medicare 1.45% on all income + 0.9% Additional Medicare on income above $200,000 (single)
$0state = Texas state income tax = $0 (no state income tax in Texas)
Property Tax = Home Assessed Value × County Effective Rate (average 1.75%). Homestead exemption reduces school district assessed value by $100,000.
Sales Tax = Annual Spending × 75% taxable share × 8.0% combined TX rate (6.25% state + 1.75% average local)
Example: Single, $80,000 income: Federal = $8,114. FICA = $6,120. TX state = $0. Total = $14,234 (17.8% effective). CA equivalent adds $3,869. NYC equivalent adds $5,961.
📖 How to Use This Calculator
Steps
1
Choose your calculation mode - Select Income Tax to see your federal tax, FICA, and state comparison savings. Select Property and Sales Tax to estimate your Texas local tax burden based on home value and spending.
2
Enter your annual gross income (Income Tax mode) - Type or drag to your total annual income. Select your filing status: Single, Married Filing Jointly, or Head of Household. The calculator automatically shows TX state tax as $0.
3
Enter home value and spending (Property and Sales Tax mode) - Type your home assessed value and adjust the property tax rate if you know your county rate. Enter estimated annual household spending to see the approximate sales tax cost for the year.
4
Click Calculate to see results - View your complete Texas tax picture: total taxes owed, net take-home pay, effective rates, and your annual dollar savings compared to California and New York residents at the same income level.
💡 Example Calculations
Example 1 - Single, $75,000 Annual Income
A single teacher in Austin earning $75,000 per year
1
Federal taxable income = $75,000 − $15,000 standard deduction = $60,000
2
Federal tax = 10%×$11,925 + 12%×$36,550 + 22%×$11,525 = $1,193 + $4,386 + $2,536 = $8,115
3
FICA = 6.2%×$75,000 (SS) + 1.45%×$75,000 (Medicare) = $4,650 + $1,088 = $5,738. TX state = $0.
4
Total = $13,853. Net take-home = $61,147 (18.5% effective). Savings vs. California = $3,869. Savings vs. NY State = $3,489.
Net Take-Home = $61,147/year ($5,096/month)
Try this example →Example 2 - Married Filing Jointly, $120,000
A married couple in Houston filing jointly with $120,000 combined income
1
Federal taxable income = $120,000 − $30,000 = $90,000. TX state = $0.
2
Federal tax = 10%×$23,850 + 12%×$66,150 = $2,385 + $7,938 = $10,323
3
FICA = 6.2%×$120,000 + 1.45%×$120,000 = $7,440 + $1,740 = $9,180. Total tax = $19,503.
4
Net take-home = $100,497 (16.3% effective). Savings vs. California = $5,051. Savings vs. NY State = $5,285. Savings vs. NYC = $9,090.
Net Take-Home = $100,497/year ($8,375/month)
Try this example →Example 3 - Single High Earner, $250,000
A single tech professional in Dallas earning $250,000
1
Federal taxable income = $250,000 − $15,000 = $235,000. TX state = $0.
2
Federal tax (through 32% bracket) = $1,193 + $4,386 + $12,073 + $22,548 + $12,064 = $52,264
3
FICA = SS cap $176,100×6.2% + Medicare $250,000×1.45% + Additional Medicare $50,000×0.9% = $10,918 + $3,625 + $450 = $14,993
4
Total = $67,257. Net take-home = $182,743 (26.9% effective). Savings vs. California = $22,059. Savings vs. NYC = $23,303.
Net Take-Home = $182,743/year ($15,229/month)
Try this example →Example 4 - Property and Sales Tax, $350,000 Home
A homeowner in San Antonio with a $350,000 home and $60,000 annual spending
1
Annual property tax = $350,000 × 1.75% = $6,125. (Before homestead exemption, which reduces school district assessed value by $100,000.)
2
Taxable spending estimate = $60,000 × 75% = $45,000 (groceries and prescriptions are exempt). Sales tax = $45,000 × 8% = $3,600
3
Total estimated local taxes = $6,125 + $3,600 = $9,725 per year (property + sales combined)
Total Local TX Taxes = $9,725/year
Try this example →❓ Frequently Asked Questions
Does Texas have a state income tax in 2025?
No. Texas has no state income tax and has not had one since at least 1845. The Texas Constitution (Article 8, Section 17) prohibits a personal income tax without voter approval. A 2019 amendment further entrenched this by requiring a two-thirds legislative majority plus voter approval before any income tax could be imposed. Texas residents pay federal income tax and FICA but pay zero TX state income tax on wages, salary, or investment income.
What is the Texas state tax rate for individuals?
The Texas individual income tax rate is 0%. There are no tax brackets, no standard deduction, and no Texas personal income tax return to file. Texas generates state revenue primarily through sales tax (6.25% state rate), property taxes (levied locally), and business franchise tax. Individual Texas residents benefit directly from the $0 state income tax on all levels of earned income.
How much does Texas tax affect take-home pay vs. other states?
At $75,000 single income, Texas residents save approximately $3,869 vs. California residents and $3,489 vs. New York State residents per year in state income taxes. At $150,000, those savings grow to roughly $10,000 vs. California and $9,000 vs. New York. At $300,000, the savings vs. California (state + SDI) exceed $20,000 per year. The savings compound quickly at higher incomes because both CA and NY have steeply progressive state rates.
Are Texas property taxes really the highest in the US?
Texas ranks near the top for property tax burden. Average effective property tax rates of 1.60% to 2.15% compare to California (0.68% average, capped by Prop 13), New York (1.40% average), and Florida (0.80% average). On a $350,000 home, a Texan pays roughly $6,125 per year vs. $2,380 for a Californian at the same home value. This property tax gap is real, but typically does not fully offset the income tax savings at middle and higher incomes.
What is the Texas franchise tax and does it apply to me?
The Texas franchise tax (also called the Texas margin tax) applies to businesses, not individual employees. It generally applies to corporations, LLCs, and partnerships with annual gross revenues above $2.47 million (2025 threshold). For most employees, freelancers with modest income, and small business owners below the threshold, the franchise tax does not apply. The effective franchise tax rate is typically 0.75% of taxable margin for most businesses and 0.375% for retail and wholesale.
Does moving to Texas actually save me money in taxes?
For high-income earners, moving to Texas from California or New York typically saves significant money. A single earner at $200,000 saves roughly $14,000 to $22,000 per year in state income taxes. However, the total picture depends on housing. If you own a $700,000 home, Texas property taxes of roughly $12,250 per year are much higher than California's $4,760. If you rent, the property tax is embedded in rent but varies. For renters earning above $100,000, moving to Texas almost always reduces total tax burden.
What taxes do retirees pay in Texas?
Texas retirees pay no state income tax on Social Security benefits, pension income, IRA distributions, or 401(k) withdrawals. Federal income tax still applies to most retirement income (except Roth IRA qualified distributions). Texas also offers property tax exemptions for seniors: homeowners age 65+ receive an additional $10,000 homestead exemption from school district taxes, plus a school district property tax freeze that locks the school portion of property taxes at the age-65 level. This makes Texas particularly attractive for retirees on fixed incomes.
What is Texas sales tax and what is exempt?
Texas state sales tax is 6.25%, with local additions up to 2% (max combined 8.25%). The following are exempt from Texas sales tax: unprepared grocery food items, prescription drugs, most non-prescription drugs, agriculture supplies, and certain manufacturing equipment. Prepared food (restaurant meals, deli items) is taxable. Clothing is taxable. Online purchases now also collect Texas sales tax following the 2018 Supreme Court Wayfair ruling. The exemptions on groceries meaningfully reduce the effective sales tax rate on typical household budgets.
How does the Texas homestead exemption reduce property taxes?
The Texas homestead exemption removes $100,000 from the assessed value used by school districts to calculate property taxes on your primary residence (increased from $40,000 by a 2023 constitutional amendment). School district taxes typically represent 40% to 60% of total Texas property taxes. On a $350,000 home with a combined rate of 1.75%, if school districts account for 55%, that is roughly $3,369 in school taxes. The $100,000 exemption reduces taxable value to $250,000 for that portion, saving approximately $963 per year on school taxes alone.
Are capital gains taxed in Texas?
Texas does not tax capital gains at the state level. There is no Texas capital gains tax. Capital gains from stocks, real estate, cryptocurrency, or other assets are taxed only by the federal government at the applicable federal rate (0%, 15%, or 20% for long-term gains depending on income; short-term gains taxed as ordinary income). This is another significant advantage for investors and business owners compared to California, which taxes capital gains as ordinary income at up to 13.3%.
Does Texas have an estate or inheritance tax?
No. Texas abolished its estate tax in 2005 and has no inheritance tax. Texas heirs receive assets from an estate without any Texas state tax on the transfer. A federal estate tax applies to estates above $13.61 million per person (2024 threshold, inflation-adjusted annually). For the vast majority of Texas families, neither federal nor state estate tax applies. This makes Texas an attractive state for estate planning compared to states like Massachusetts (estate tax threshold as low as $1 million) or Oregon.