Texas has no state income tax. Your only income tax obligations are federal brackets. Calculate your exact marginal and effective federal tax rate below. Formula shown, sources cited — no account required.
Texas imposes no state income tax on individuals, placing it among seven states that skip the tax entirely. Residents pay only federal income taxes and payroll taxes, with no state return to file. For a household earning the median $79,721, the effective federal rate typically falls around 12–14%, leaving take-home pay well above what workers in states like Vermont or Wisconsin would keep. Texas funds its government through property taxes and sales taxes instead, with the property tax levy at 1.80% being one of the highest in the country. The sales tax averages 8.20%, combining state and local rates. Neither capital gains nor investment income faces any state tax, which makes Texas particularly attractive to investors and business owners. The absence of a corporate income tax has drawn significant business relocation to the state over the past decade. Use a federal tax bracket calculator to identify your marginal rate and determine which retirement contributions and deductions offer the greatest benefit each year.
Texas Tax Brackets Explained: No State Tax, Federal Only
Texas is one of the nine US states with no state income tax. Residents only pay federal income tax and FICA payroll taxes. This makes Texas attractive for high earners — a $200,000 income that would face 9–10% state tax in California or New York faces zero additional state burden here.
The median household in Texas earns $79,721/year. At that income (single filer), the federal effective rate is approximately 12–14%, bringing total income tax (federal + state) to roughly 12–14%.
How Marginal vs. Effective Rate Works
The marginal rate is the rate on your last dollar of income — it does not apply to all income. The effective rate is your total tax divided by total income. For example, someone earning $100,000 in Texas has a 22% federal marginal rate but an effective federal rate of roughly 15%, because the first $44,725 (2024) is taxed at 10% and 12%, not 22%.