Texas 1099 Taxes in 2026
People searching "texas 1099 tax calculator" and "1099 taxes in texas" usually want one thing confirmed: that Texas takes nothing from their gig income. That part is true — Texas has no personal income tax. What is not true is that a Texas 1099 worker has a light tax year. Federal income tax and 15.3% self-employment tax still apply in full, and local permits can still bite. Run your numbers in the [Texas self-employed tax calculator](https://gigmytax.com/calculators/texas-self-employed-tax) first.
Texas has no income tax — here is what remains
There is no Texas personal income tax and no Texas city income tax, so your only income-based bills are federal: income tax on taxable income, and self-employment tax at 15.3% on 92.35% of net profit. That usually means a 22% to 26% set-aside rather than the 28% to 32% a California or New York gig worker needs.
No state return to file
You file a federal 1040 with Schedule C and Schedule SE, and nothing at the state level for personal income.
Franchise tax
Sole proprietors are not subject to Texas franchise tax. If you form an LLC, the franchise tax applies but the no-tax-due revenue threshold means most small gig LLCs owe nothing while still needing to report.
Sales tax
Selling taxable goods or certain services means a Texas sales-and-use tax permit and periodic returns. Driving and delivery services generally do not, but resale and craft sellers usually do.
The Texas 1099 math, step by step
Because there is no state layer, the calculation is short enough to do by hand once you know the structure.
Step 1 — net profit
Gross platform earnings minus business expenses. This is your Schedule C bottom line.
Step 2 — self-employment tax
Multiply net profit by 92.35%, then by 15.3%. Half of the result is deductible against income tax.
Step 3 — federal income tax
Subtract the $16,100 standard deduction and half of SE tax from net profit, then apply the federal brackets.
Step 4 — set-aside
Divide total tax by net profit. Most Texas gig workers land between 21% and 25%.
Worked example: a Houston rideshare driver at $52,000 profit
Gross $68,000 with $16,000 of expenses (20,000 miles at $0.70 = $14,000, phone $700, car washes and supplies $600, tolls $700). Net profit $52,000. SE tax on 92.35% ($48,022) is about $7,347, half deductible. Federal taxable income after the $16,100 standard deduction is roughly $32,227, giving about $3,650 of federal income tax. Total roughly $10,997 — 21% of profit, and no state or city income tax on top. The same driver in Los Angeles would owe roughly $1,300 more.
Local Texas obligations that still apply
No income tax does not mean no local paperwork.
Hotel occupancy tax
Austin, Houston and Dallas short-term rental hosts owe city hotel occupancy tax plus the state HOT, filed monthly or quarterly.
Short-term rental licensing
Austin and several other cities require an STR licence with annual renewal and inspection.
DBA and permits
Assumed-name filings with the county and, for food-related gigs, health permits. Fees are deductible on Schedule C.
Quarterly payments for Texas contractors
You still owe federal estimates on Form 1040-ES if you expect to owe $1,000 or more, due April 15, June 15, September 15 and January 15. There is no Texas voucher, which makes safe harbour simpler: pay 90% of this year's federal tax or 100% of last year's (110% above $150,000 of prior-year AGI). Model each instalment in the [quarterly tax calculator](https://gigmytax.com/calculators/quarterly-tax), and see the [Texas 1099 contractor filing checklist](https://gigmytax.com/blog/texas-1099-contractor-filing-checklist) for document prep.
Frequently asked questions
+Do 1099 workers pay state income tax in Texas?
No. Texas has no personal income tax and no city income tax, so 1099 income is taxed only at the federal level.
+How much should a Texas 1099 worker set aside for taxes?
Typically 21% to 25% of net profit to cover federal income tax and 15.3% self-employment tax, with no state layer to fund.
+Does a Texas gig worker owe franchise tax?
Sole proprietors do not. An LLC is subject to franchise tax but usually owes nothing under the no-tax-due revenue threshold, though a report may still be required.
+Do I need a sales tax permit for gig work in Texas?
Rideshare and delivery services generally do not require one. Selling goods — resale, crafts, prepared items — usually does, along with periodic sales-tax returns.
+Are Texas quarterly estimated taxes required?
Only federal ones. File Form 1040-ES on the four IRS dates if you expect to owe $1,000 or more; there is no Texas state estimate.
+What local taxes apply to Austin short-term rentals?
City hotel occupancy tax plus the state hotel occupancy tax, and in most cases a short-term rental licence renewed annually.
About the author
Javed Niamat · Founder & Editor, GigTax
Javed Niamat founded GigTax to make self-employment tax math understandable for rideshare drivers, delivery couriers, creators and freelancers. He builds and maintains every calculator on this site and writes the guides that explain the numbers behind them.
Related calculators
- Texas Self-Employed Tax CalculatorFederal + SE tax for Texas 1099 workers — no state income tax.
- California Self-Employed Tax CalculatorFederal + SE + CA state tax for California 1099 workers.
- Florida Self-Employed Tax CalculatorFederal + SE tax for Florida 1099 workers — no state income tax.
- New York Self-Employed Tax CalculatorFederal + SE + NY state (and NYC) tax for New York 1099 workers.
Related guides
- Texas 1099 Contractor Filing Checklist for 2026The paperwork a Texas 1099 contractor actually files in 2026: Schedule C and SE, franchise No Tax Due status, sales tax permits, and DBA registration.
- Self-Employment Tax Explained: 2026 Rates, Rules, and MathSelf-employment tax explained in plain English: 15.3% breakdown, the 92.35% adjustment, the ½ SE deduction, thresholds, and how to pay it in 2026.
- Quarterly Estimated Taxes for Gig Workers: Dates, Forms, How to PayWhen and how gig workers pay quarterly estimated taxes in 2026 — deadlines, safe harbor rules, IRS Direct Pay, and how to size each payment.
- The Complete 1099 Deductions Checklist for 2026Printable 1099 tax deductions checklist for 2026. Every Schedule C write-off freelancers and contractors miss — mileage, home office, phone, health, retirement.