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Texas State Income Tax 2023 – 2024

In this article, we’ll explore the Texas state income tax situation, including the absence of an income tax, standard deductions, and how to calculate your tax liability if you’re a Texan.
Texas State Income Tax
Texas State Income Tax 2023 – 2024
Since there is no Texas state income tax to pay, you do not need to worry about filing a state income tax return or making payments related to state income tax liabilities here. Read on to know more.
In this article

Regarding state income tax, the rules and rates can vary significantly from one state to another. Texas stands out as one of the few states in the United States that does not impose a state income tax on its residents. This has made Texas an attractive destination for those looking to minimize their tax burden. Does Texas Have a State Income Tax? No. There is no Texas state income tax. 

The absence of state income tax is a defining feature of the Texas tax system. This means that individuals and businesses in Texas do not pay a percentage of their income to the state government in the form of income tax. Instead, Texas relies on other sources of revenue, such as sales tax and property tax, to fund government operations.

Texas State Income Tax Rates and Tax Brackets

As mentioned earlier, Texas does not have state income tax rates or tax brackets because it does not impose a state income tax. Unlike states with a progressive income tax system with different tax rates based on income levels, Texas does not collect income tax on personal or corporate earnings.

Texas State Income Tax
Texas State Income Tax 2023 - 2024 3

Texas State Income Tax – How much will the income after tax in Texas with Filing Status

Annual IncomeFiling Status –
Single
Filing Status –
Married Filing Jointly
Filing Status –
Head of Household
$12000$12,000$12,000$12,000
$15000$14,795$15,000$15,000
$20000$19,295$20,000$19,940
$22000$21,095$22,000$21,740
$30000$28,940$29,590$28,940
$35000$32,560$34,090$33,421
$36000$33,440$34,990$34,301
$42000$38,720$40,390$39,581
$45000$41,360$43,090$42,221
$48000$44,000$45,759$44,861
$52000$47,520$49,279$48,381
$54000$50,912$52,799$51,901
$60000$54,032$56,319$55,421
$62000$55,592$58,079$57,181
$65000$57,932$60,719$59,821
$70000$61,832$65,119$64,221
$75000$65,732$69,519$68,621
$80000$73,919$73,919$72,551
$85000$73,532$78,319$76,451
$90000$77,432$82,719$80,351
$92000$78,992$84,479$81,911
$95000$81,332$87,119$84,251
$114000$95,913$103,384$98,960
$115000$96,673$104,164$99,720
$140000$115,673$123,664$118,720
$150000$123,273$131,464$126,320
$160000$130,873$139,264$133,920
$165000$134,673$143,164$137,720
$190000$153,113$162,664$156,676
$185000$149,713$158,764$152,920
$260000$199,780$216,145$203,536
$300000$225,780$246,545$229,536
$350000$258,280$284,545$262,036
$120000$111,873$119,764$114,920
$135000$111,873$119,764$114,920
$170000$138,473$147,064$141,520
$180000$146,073$154,864$149,120
$250000$193,280$208,545$197,036
$28000$26,400$27,790$27,140
$32000$29,920$31,390$30,740
$40000$36,960$38,590$37,821
$44000$40,480$42,190$41,341
$53000$48,400$50,159$49,261
$56000$50,912$52,799$51,901
$58000$52,472$54,559$53,661

What is Texas’ Standard Deduction?

Since Texas has no state income tax, there is no standard deduction for individual income tax purposes. States with an income tax typically provide standard deductions to reduce the taxable income of their residents. However, in Texas, your taxable income is not subject to state-level deductions because there is no income tax to deduct from.

How to Calculate Texas State Income Tax 

Calculating your Texas state income tax is straightforward because there isn’t any. You don’t need to worry about filing a state income tax return in Texas or calculating how much state income tax you owe because the state does not impose such a tax. Instead, residents and businesses in Texas primarily deal with other taxes, including:

  • Sales Tax: Texas has a sales tax collected on most retail sales of goods and services. The rate may vary by locality within the state.
  • Property Tax: Property owners in Texas pay property taxes, which local governments levy to fund schools, roads, and other local services. The property tax rate can vary significantly by county and municipality.
  • Business Taxes: Texas does have certain business-related taxes, such as the state’s franchise tax, which is a tax on businesses that are not exempt.

Texas’ tax system is unique in the United States due to its absence of state income tax. Residents of Texas do not need to worry about calculating or paying state income tax, which can be a significant financial advantage for individuals and businesses. However, it’s important to remember that other taxes, such as sales and property taxes, apply in Texas, so understanding them is essential for residents and businesses. Always consult with a tax professional or look for online tax assistance like Beem provides or the Texas Comptroller of Public Accounts for the most up-to-date and accurate tax information specific to your situation.

Do I have to pay Texas state income tax?

In Texas, you do not have to pay state income tax because the state does not impose a state income tax on personal or corporate earnings. This is a notable feature of Texas’s tax system, making it one of the states in the United States that does not collect income tax from its residents.

Since there is no Texas state income tax to pay, you do not need to worry about filing a state income tax return or making payments related to state income tax liabilities. Instead, Texas primarily relies on other forms of taxation to generate revenue, such as sales tax, property tax, and various business-related taxes.

Here’s a brief overview of some of the key taxes that residents and businesses in Texas may need to consider:

  • Sales Tax: Texas has a sales tax applied to most retail sales of goods and services. This tax rate can vary based on the specific locality within the state, as cities and counties may impose additional sales taxes on top of the state’s base rate.
  • Property Tax: Property owners in Texas are subject to property taxes, which local governments levy to fund local services, including schools, infrastructure, and public safety. Property tax rates can vary significantly by county and municipality.
  • Business Taxes: While Texas does not have a traditional state income tax on businesses, it does have certain business-related taxes. One example is the Texas Franchise Tax, which applies to certain types of businesses and is calculated based on their gross receipts.

How to pay Texas state income tax

Texas relies on alternate sources of revenue, such as sales tax, property tax, and certain business-related taxes, to fund state and local government operations. Since there is no state income tax in Texas, there are no state income tax returns to file or payments to make.

Also Read: Texas Tax Free Weekend

Am I a Resident for Texas Income Tax Purposes?

Determining your residency status for income tax in Texas, as in many other states, is crucial because it determines whether you are subject to Texas state income tax and the rules that apply to your tax liability. Below are the general guidelines for determining residency status in Texas:

Resident Status Rules

You are considered a Texas resident for income tax purposes if you either: 

  1. Reside in Texas, which means you maintain a domicile in Texas, even if you are temporarily absent from the state. 
  2. Do not reside in Texas but maintain a domicile in Texas and spend more than 183 days of the tax year in the state.

Part-Year Resident Status Rules

If you move into or out of Texas during the tax year, you may be considered a part-year resident. In this case, you will typically be subject to Texas income tax only on your income as a state resident.

Nonresident Status Rules

If you neither reside in Texas nor maintain a domicile in the state, you are considered a nonresident for income tax purposes. Nonresidents are typically only subject to Texas income tax on certain types of income earned in Texas, such as income from Texas sources.

Also Read: Arkansas Self-employment Tax

Where is My Texas State Income Tax Refund?

If you’re expecting a refund for your Texas state income tax return, you can check the status of your refund through the Texas Comptroller of Public Accounts website. They provide an online tool that allows you to track the progress of your refund and get an estimated date of when you can receive it. You must provide your Social Security Number, the type of return you filed, and the expected refund amount.

Why Did My Texas State Income Tax Increase?

Several factors can lead to an increase in your Texas state income tax liability:

  • Change in Income: You may owe more taxes if your income increases. This could result from a salary increase, additional sources of income, or changes in your financial situation.
  • Change in Deductions: Any alterations in your deductions, like claiming fewer deductions or credits than in previous years, can lead to a higher tax liability.
  • Tax Law Changes: Changes in Texas tax laws, deductions, or credits can impact your tax liability. Be sure to stay informed about any legislative updates.
  • Errors or Omissions: Mistakes in your tax return, like errors in reporting income or deductions, can increase tax liability. Always double-check your return for accuracy.
Texas State Income Tax
Texas State Income Tax 2023 - 2024 4

If you need clarification on why your Texas state income tax has increased, consider consulting with a tax professional who can review your return and provide guidance based on your circumstances. 

Texas Sales Tax

Texas has a state sales tax, collected on most retail sales of tangible goods and some services. The state’s sales tax rate is 6.25%, but local jurisdictions (cities and counties) can add additional sales taxes, which can vary. Therefore, the total sales tax rate you pay may differ depending on where you make your purchase.

Things to Know About Texas Income Tax

Here are five essential things to know about Texas income tax:

  1. No State Income Tax: Texas does not impose a state income tax on personal or corporate income.
  2. No Inheritance or Estate Tax: Texas also has no inheritance or estate tax.
  3. Reliance on Other Taxes: To fund government operations, Texas primarily relies on other taxes, such as sales and property taxes.
  4. Property Taxation: Property owners in Texas pay taxes to local governments, which fund schools and other local services.
  5. Business Taxes: While there is no traditional state income tax for businesses, certain business-related taxes, like the Texas Franchise Tax, may apply to specific types of businesses.

Conclusion

As we approach 2022-2023, it’s crucial to reiterate that Texas remains one of the few states in the United States that does not impose a state income tax on individuals or corporations. This unique aspect of Texas’ tax system sets it apart. It makes it an attractive destination for those seeking to minimize their income tax burden. 

Residents of Texas do not need to worry about specific state income tax rates or tax brackets because there is no such thing as Texas state income tax on personal or corporate earnings. Instead, Texas relies on other sources of revenue, including sales tax, property tax, and certain business-related taxes, to fund government operations.

Understanding Texas’ tax landscape is essential for residents and businesses to navigate their tax obligations effectively. While the absence of a state income tax offers advantages, it’s essential to stay informed about other taxes that apply in the state, such as the sales and property tax rates, which can vary by locality.

If you have specific questions about taxation or need guidance regarding your tax situation in Texas, consulting with a tax professional or the Texas Comptroller of Public Accounts is advisable. Staying informed and up-to-date with any tax laws or regulations changes is essential for accurate tax planning and compliance in the Lone Star State.

You can file personal tax online for both Federal and state, even if you have worked in multiple states or have multiple W-2s. Check out Beem Tax Calculator to get a quick and accurate estimate of your federal and state tax refund for free.

FAQs

Q. Is Texas a high-tax state?

A. No, Texas is generally considered a low-tax state. It does not impose a state income tax on individuals or corporations, contributing to its reputation as a low-tax jurisdiction. However, the state relies on other forms of taxation, such as sales and property taxes.

Q. Is Texas a tax-friendly state?

A. Texas is often viewed as a tax-friendly state due to its lack of state income tax. Additionally, it has relatively low property tax rates compared to some other states.

Q. Is Texas a good place to live for taxes?

A. Many people find Texas attractive to live in from a tax perspective because it lacks state income tax. 

Q. How much of my paycheck goes to taxes in Texas?

A. Texas does not have a state income tax, so there is no state income tax withholding from your paycheck.

Q. Does Texas tax income earned in another state?

A. Texas generally does not tax income earned in another state. It adheres to the principle of not imposing state income tax on income earned outside Texas.

Q. Does the state of Texas tax Social Security income?

A. Texas does not tax Social Security income. Social Security benefits are generally not subject to state income tax in Texas.

Q. Can Texas state income tax go up?

A. Since Texas does not currently have a state income tax, no state income tax rate can be increased. Any changes to the tax system in Texas would require legislative action.

Q. Do seniors have to pay state income tax in Texas?

A. Seniors in Texas do not have to pay state income tax on their retirement income. Texas is considered tax-friendly for retirees in this regard.

Q. Does Texas have a state income tax for the military?

A. Texas does not impose a state income tax on military retirement pay. Military pensions and retirement income are generally not subject to state income tax in Texas.

Q. What are Texas’s state income taxes for LLCs?

A. Texas does not impose a state income tax on LLCs. Instead, LLCs in Texas are subject to the state’s franchise tax based on the LLC’s gross receipts.

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Team Beem brings you the latest in the world of personal finance to you. From tips and tricks on how to manage money to how to get cash for emergencies, Beem is your destination for all the information you need to be smart about your money.

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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