Freelancers in Houston, TX: taxes and retirement for 2026

For freelance designers, developers, writers and other 1099 professionals in Houston, 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 Houston

Local income tax: No city income tax in Houston.
Business personal property tax (Texas local property tax): Business personal property such as equipment and inventory is subject to local property tax in Texas, but Texas voters approved a constitutional amendment in November 2025 that raised the business personal property tax exemption to $125,000, up from $2,500.
City business license: The City of Houston does not issue a general business license; only specific regulated activities need city permits or licenses.
Also worth knowing: Texas has no state income tax (https://comptroller.texas.gov/economy/fiscal-notes/industry/2025/small-biz-info), and Texas is not among the states with city- or county-level income taxes per the Tax Foundation's 2026 list (secondary source; no official Texas page stating this was found). A sole proprietor operating under a name other than their own files a DBA (assumed name) certificate with the county (https://www.houstontx.gov/obo/solutionscenter/four_main_business_requirements.html).

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

A freelancer with $85,000 of net profit in 2026
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.

Free tools

Quarterly tax calculator Self-employment tax calculator Solo 401(k) vs SEP IRA calculator

Guides by job and platform

Freelancers Graphic designers Web developers Freelance writers Video editors Virtual Assistants

Fiverr Upwork Freelancer.com Contra 99designs by Vista

Questions

Is there a local income tax in Houston?

No city income tax applies in Houston. Texas has no state income tax on wages or self-employment income.

What local business taxes apply to self-employed freelancers in Houston?

Business personal property tax (Texas local property tax): Business personal property such as equipment and inventory is subject to local property tax in Texas, but Texas voters approved a constitutional amendment in November 2025 that raised the business personal property tax exemption to $125,000, up from $2,500.

Do I need a business license to freelance from home in Houston?

The City of Houston does not issue a general business license; only specific regulated activities need city permits or licenses.

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

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.