How much should a self-employed person in Texas set aside for taxes?

Because Texas has no state income tax, many Texas freelancers set aside about 25% to 30% of net self-employment income for federal self-employment tax and federal income tax — lower than in states that add their own income tax. This calculator estimates your specific percentage.

Does Texas have a state income tax for freelancers?

No. Texas is one of a small number of states with no personal income tax, so your self-employment profit is not taxed at the state level and there is no state income-tax return to file. You still owe federal self-employment tax and federal income tax.

Do Texas freelancers pay the Texas franchise tax?

Sole proprietors and most single-member LLCs owned by an individual are not subject to the Texas franchise tax. Businesses that are subject to it generally owe nothing until total revenue exceeds the state's no-tax-due threshold, which sits in the low millions of dollars.

Texas · For freelancers & the self-employed

Texas self-employed tax calculator

Texas has no state income tax, so what you set aside is federal only — usually less than freelancers owe in states that stack their own income tax on top. Enter your net income and we'll estimate your federal self-employment tax and federal income tax together.

Reviewed for accuracy by [Reviewer Name], CPA · Updated for tax year 2026 · How this is calculated · Federal figures are estimates pending CPA review

Net self-employment income (your expected profit for the whole year — total income minus business expenses)

Enter your net self-employment income to begin.

Filing status (how you file — pick "Single" if you're not married)

Other income from a regular job (W-2 wages, yours or a spouse's — include it, it affects your estimate)

What a self-employed Texan actually owes

Freelancers, gig workers, and 1099 contractors in Texas face two layers of tax, not three. There's the federal self-employment tax and federal income tax that everyone who works for themselves pays — but no state income tax on top. That's why the familiar "set aside 25–30%" rule of thumb generally holds in Texas, where freelancers in high-tax states often need to reserve closer to 35–40%.

Texas-specific notes

No state income tax. Texas is one of a handful of states with no personal income tax, a rule protected by the state constitution. Your self-employment profit is not taxed by the state, and there is no state income-tax return to file — only your federal Form 1040 and Schedule C. See Texas Comptroller: Taxes.

The franchise-tax consideration. Texas has no income tax but does levy a franchise tax on certain business entities — LLCs, corporations, and partnerships. A plain sole proprietor filing a Schedule C is not subject to it, and single-member LLCs owned by an individual are generally treated the same way for franchise-tax purposes. Even entities that are subject to the tax owe nothing until total revenue passes the state's no-tax-due threshold, which sits in the low millions of dollars — so most freelancers never owe it. Confirm your situation with the Texas Comptroller: Franchise Tax.

Estimated payments are federal only. Because there's no state income tax, you don't make state estimated payments — but you still send quarterly federal estimated taxes to the IRS, since no one withholds tax from your 1099 income. Our quarterly tax calculator splits your federal total into four dated payments.

How this is calculated

1. Federal self-employment tax — 15.3% (12.4% Social Security up to the wage base + 2.9% Medicare, plus 0.9% Additional Medicare on higher earnings) on 92.35% of your net profit. See IRS: Self-Employment Tax.

2. Federal income tax — on taxable income after the federal standard deduction, half your SE tax, and a simplified 20% QBI deduction (capped at 20% of taxable income). See IRS: Estimated Taxes.

3. Texas state income tax — none. There is no state income tax to add, which is why your Texas set-aside is lower than the national state-plus-federal figure.

Want the plain-vanilla version? Our national self-employed tax calculator lets you enter any state rate, and the quarterly tax calculator splits your federal total into four payments.

Frequently asked questions

How much should I set aside as a Texas freelancer? Often 25–30% of net income, because you owe federal self-employment and income tax but no Texas state income tax. The calculator above gives your specific figure based on your income and filing status.

Does Texas tax my freelance income? Not through an income tax — Texas has none. You still owe federal self-employment tax and federal income tax on your profit.

Do I owe the Texas franchise tax? Almost certainly not as a sole proprietor, and generally not as an individual-owned single-member LLC. Entities that are subject to it owe nothing below the no-tax-due revenue threshold, which most freelancers never reach.

Educational estimate — not tax advice. This tool applies simplified 2026 federal rules (standard deduction, a simplified QBI deduction capped at 20% of taxable income, and self-employment tax including Additional Medicare). Texas has no state income tax, so no state figures are applied. Federal figures are current-year estimates pending CPA review and may change. This tool does not model the Texas franchise tax, itemized deductions, or credits. Your actual liability depends on your specific situation and is not a substitute for a CPA, EA, or the IRS. Everything is calculated entirely in your browser — nothing you type is stored or sent anywhere.