What Are the Tax Brackets for Texas? Understanding Federal Taxes in the Lone Star State
Introduction
Many people ask, “What are the tax brackets for Texas?”—especially when considering a move to the Lone Star State or evaluating job offers. The short answer? Texas does not have a state income tax, so there are no Texas-specific income tax brackets to worry about.
However, that doesn’t mean Texans are free from income taxes altogether. Residents still face federal income tax brackets, along with other taxes like sales tax and property taxes. In this article, we’ll break down Texas’ tax structure, explain how federal tax brackets affect Texans, and analyze take-home pay examples to help you better understand how much of your income you actually keep.
Understanding Texas’ Tax Structure
No State Income Tax
Texas is one of just nine states with no state income tax. This means you won’t pay any state tax on wages, salaries, or retirement income, and there are no Texas state income tax brackets. It’s one of the reasons why many individuals and businesses are attracted to Texas—your paycheck can go further without a state income tax bite.
Other Taxes in Texas
While Texas spares residents from state income tax, it makes up for it in other areas. Here are a few key taxes Texans encounter:
Sales Tax: The statewide base rate is 6.25%, but local jurisdictions can add up to 2% more, making the maximum sales tax rate 8.25%.
Property Tax: Texas has some of the highest property taxes in the country, with rates often exceeding 1.5% of assessed property value, depending on the county.
Franchise Tax: Businesses in Texas may be subject to a franchise tax, which is essentially a tax on gross revenue for certain entities.
Federal Income Tax Brackets: What Texas Residents Need to Know
Because Texas doesn’t have a state income tax, federal taxes are the primary income tax burden for residents. The IRS determines federal tax brackets, and they apply equally to all U.S. residents, regardless of state.
Federal Income Tax Brackets (2024)
Federal tax brackets are progressive, meaning different portions of your income are taxed at different rates. For single filers in 2024, the brackets are approximately:
10%: Up to $11,600
12%: $11,601 to $47,150
22%: $47,151 to $100,525
24%: $100,526 to $191,950
(and higher brackets beyond that)
The 22% tax bracket is particularly important because it’s where middle-income earners often fall, including those earning around $70,000 to $100,000 annually.
Calculating Your Take-Home Pay in Texas
Example: $70,000 Annual Income
Let’s walk through what take-home pay might look like for a Texas resident earning $70,000 per year.
Federal Income Tax (based on 2024 brackets and standard deduction of $14,600 for single filers):
Taxable income = $70,000 - $14,600 = $55,400
Federal tax owed:
First $11,600 at 10% = $1,160
$11,601 to $47,150 at 12% = ~$4,266
$47,151 to $55,400 at 22% = ~$1,814
Total federal income tax = ~$7,240
Payroll Taxes:
Social Security (6.2%) = $4,340
Medicare (1.45%) = $1,015
Total payroll taxes = $5,355
Net Take-Home Pay:
$70,000 - $7,240 - $5,355 = ~$57,405 annually, or ~$4,784/month
Note: Because there’s no state income tax, this take-home pay is higher than in states that impose additional income taxes on top of federal and payroll taxes.
Determining Your Tax Bracket
Your federal tax bracket depends on two things:
Taxable Income: Your income after deductions (e.g., standard or itemized deductions).
Filing Status: Single, Married Filing Jointly, Head of Household, etc.
Tools to Help:
Use IRS-provided tax tables.
Try a federal tax calculator to quickly estimate your bracket and liability.
Remember: Being in the 22% bracket doesn’t mean all your income is taxed at 22%—just the portion that falls within that bracket.
Salary Analysis: Is $100K a Good Salary in Texas?
A $100,000 salary in Texas can go much further than in many other states, thanks largely to the lack of state income tax.
Advantages:
No state income tax means you keep more of your income.
Cost of living in many Texas cities is below the national average, though some cities (e.g., Austin) are becoming more expensive.
Considerations:
Property taxes can be high, so homeowners should factor that into their budget.
Sales taxes are also higher than in some states, impacting consumer costs.
Bottom Line:
With smart budgeting, a $100K salary in Texas provides a strong standard of living, particularly compared to residents in states like California or New York, where state income taxes and living costs are significantly higher.
Conclusion
Texas residents do not face state income tax brackets because the state doesn’t impose income tax at all. However, federal income tax brackets still apply, and understanding them is essential for accurate financial planning. Whether you’re earning $70,000 or $100,000, it’s important to consider the full tax picture, including federal taxes, payroll taxes, and local expenses like property and sales tax. For personalized guidance, it’s always a good idea to consult a tax professional.
FAQs
What are the Texas income tax brackets?
Texas does not have a state income tax, so there are no Texas-specific income tax brackets.
How much is $70,000 after taxes in Texas?
On a $70,000 income, a Texas resident might take home around $57,405 annually, after federal income tax and payroll taxes—with no state income tax reducing the net pay.
How do I know which tax bracket I am in?
Your federal tax bracket is determined by your taxable income and filing status. Subtract deductions from your income and consult IRS tax tables or use online calculators.
What is the 22% tax bracket?
It’s a federal income tax rate that applies to taxable income between approximately $47,151 and $100,525 (for single filers in 2024). Only the income within that range is taxed at 22%.
Is 100K a good salary in Texas?
Yes—due to no state income tax and relatively affordable living costs, $100,000 can provide a comfortable lifestyle in Texas, especially in comparison to states with higher taxes and costs.