Local guides / Texas / Austin
Freelancers in Austin, TX: taxes and retirement for 2026
For freelance designers, developers, writers and other 1099 professionals in Austin, TX. Texas has no state income tax on wages or self-employment income. Here are the 2026 rules, a worked example and the official sources.
What's different in Austin
- Local income tax
- No city income tax in Austin.
- Texas business personal property rendition / tax (Travis Central Appraisal District)
- Business owners must render (report) their business personal property owned on Jan. 1 to the county appraisal district, generally by April 15. Under current Texas law, as described by the Comptroller, business personal property with a total taxable value of $125,000 or less in a taxing unit is exempt there, which covers most solo freelancers' equipment.
- City business license
- No general city business license is required. The City of Austin says that under Texas HB 2464 (June 2025) it cannot prohibit or require permits for home-based businesses that stay within occupancy limits and do not generate significant traffic or visible or noise disturbances; some business types (for example alcohol sales or short-term rentals) still have rules.
- Also worth knowing
- No city income tax or general city business tax (Texas is listed among states with no individual income tax; Tax Foundation 2026, a secondary source). The City of Austin says Texas does not require a general business license, though some regulated trades need state licenses (https://www.austintexas.gov/economic-development/projects/start-business). The $125,000 business personal property exemption (up from $2,500) comes from HB 9 (2025) (https://gov.texas.gov/news/post/governor-abbott-signs-property-tax-relief-laws-in-denton). No local gig-worker or freelancer pay ordinances were found.
Texas rules for freelancers
- State income tax (2026)
- Texas has no state income tax on wages or self-employment income. Texas has no personal income tax. Its constitution bans a tax on individuals' net income, including their share of partnership income (Art. VIII, Sec. 24-a), and a 2025 amendment also bans taxing individuals' capital gains (Sec. 24-b).
- Texas franchise (margin) tax
- Applies to LLCs, including a single-member LLC that files federally as a sole proprietor; a sole proprietorship with no liability protection is not covered. For 2026 and 2027 reports, an entity with total revenue at or below $2.65 million owes no tax and files only a Public Information Report or Ownership Information Report. Above that, rates are 0.75% (0.375% for retail and wholesale, or 0.331% with the EZ computation).
- Rideshare (TNC) driver independent contractor statute (Occupations Code 2402.114)
- A rideshare driver is an independent contractor for all purposes if the company does not set the hours the driver must be logged in, does not limit use of other rideshare apps or the driver's territory, does not restrict other work, and both sides agree in writing that the driver is a contractor. Enacted by H.B. 100 in 2017.
- TWC marketplace platform rule (40 TAC 815.134(b))
- Since April 29, 2019, a Texas Workforce Commission rule treats people who get work through a marketplace platform as not employed for state unemployment tax purposes if nine conditions are met. These include setting their own hours, being free to use other platforms, paying their own expenses and providing their own tools.
Federal rules for 2026
Self-employment tax
On top of income tax, self-employed people pay 15.3% on 92.35% of net profit: 12.4% Social Security up to the 2026 wage base of $184,500, plus 2.9% Medicare with no cap. Half of it is deductible.
All income counts, form or no form
Clients and marketplaces send 1099-NEC or 1099-K forms only above IRS reporting thresholds, but every dollar of freelance income is taxable whether or not a form arrives.
Home office and tools
If you use part of your home regularly and only for work, the simplified home-office deduction is $5 per square foot up to 300 square feet. Software, equipment and a business share of your phone and internet are deductible too.
Quarterly estimated taxes
No one withholds tax from self-employment income, so you generally pay estimates four times a year if you expect to owe $1,000 or more. For 2026 income the federal dates are April 15, June 15 and September 15, 2026, and January 15, 2027. Paying 100% of last year's tax (110% if your AGI was over $150,000) in four equal installments avoids the underpayment penalty.
A worked example
| Self-employment tax | $12,010 |
|---|---|
| Self-employment tax per quarter | $3,003 |
| Solo 401(k) maximum | $40,299 |
| SEP IRA maximum | $15,799 |
Federal figures only. Income tax comes on top; the quarterly tax calculator estimates both. Computed from 2026 IRS limits (Notice 2025-67, Rev. Proc. 2025-32) and the SSA wage base.
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Questions
Is there a local income tax in Austin?
No city income tax applies in Austin. Texas has no state income tax on wages or self-employment income.
What local business taxes apply to self-employed freelancers in Austin?
Texas business personal property rendition / tax (Travis Central Appraisal District): Business owners must render (report) their business personal property owned on Jan. 1 to the county appraisal district, generally by April 15. Under current Texas law, as described by the Comptroller, business personal property with a total taxable value of $125,000 or less in a taxing unit is exempt there, which covers most solo freelancers' equipment.
Do I need a business license to freelance from home in Austin?
No general city business license is required. The City of Austin says that under Texas HB 2464 (June 2025) it cannot prohibit or require permits for home-based businesses that stay within occupancy limits and do not generate significant traffic or visible or noise disturbances; some business types (for example alcohol sales or short-term rentals) still have rules.
Do freelancers in Texas pay state income tax?
Texas has no state income tax on wages or self-employment income. Texas has no personal income tax. Its constitution bans a tax on individuals' net income, including their share of partnership income (Art. VIII, Sec. 24-a), and a 2025 amendment also bans taxing individuals' capital gains (Sec. 24-b).
Are there other Texas taxes for self-employed freelancers?
Texas franchise (margin) tax: Applies to LLCs, including a single-member LLC that files federally as a sole proprietor; a sole proprietorship with no liability protection is not covered. For 2026 and 2027 reports, an entity with total revenue at or below $2.65 million owes no tax and files only a Public Information Report or Ownership Information Report. Above that, rates are 0.75% (0.375% for retail and wholesale, or 0.331% with the EZ computation).
What Texas laws affect independent contractors and gig workers?
Rideshare (TNC) driver independent contractor statute (Occupations Code 2402.114): A rideshare driver is an independent contractor for all purposes if the company does not set the hours the driver must be logged in, does not limit use of other rideshare apps or the driver's territory, does not restrict other work, and both sides agree in writing that the driver is a contractor. Enacted by H.B. 100 in 2017. TWC marketplace platform rule (40 TAC 815.134(b)): Since April 29, 2019, a Texas Workforce Commission rule treats people who get work through a marketplace platform as not employed for state unemployment tax purposes if nine conditions are met. These include setting their own hours, being free to use other platforms, paying their own expenses and providing their own tools.
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Sources
- tlc.texas.gov/docs/legref/TxConst.pdf
- www.dol.gov/agencies/whd/state/minimum-wage/tipped
- comptroller.texas.gov/taxes/franchise/faq/taxable-entities.php
- capitol.texas.gov/tlodocs/85R/billtext/html/HB00100F.htm
- www.twc.texas.gov/sites/default/files/ogc/docs/fr-815-marketplace-04-19-twc.pdf
- taxfoundation.org/data/all/state/state-income-tax-rates-2026
- comptroller.texas.gov/taxes/property-tax/valuing-property.php
- www.austintexas.gov/development-services/small-business-permitting
State and local facts researched from official sources and independently re-checked; last verified October 2026, next scheduled review 2027-01-02. Educational information for 2026, not tax, legal or investment advice. Rules change; check the official sources listed and a tax professional for your situation. Gigaverse AI, Inc. is a financial technology company, not a bank, and not itself a registered investment adviser or broker-dealer.