2026 tax year · Texas
Services and task work taxes in Texas
TaskRabbit, Rover, Upwork and the rest report your gross and withhold nothing. The gap between that and what you are taxed on is mileage, in Texas that gap is worth $1,947 in tax.
Take a driver who grossed $34,000 over 18,000 business miles. After mileage at 74.3 cents and the rest of the stack, worked through on the services and task work page $9,030 comes off and $24,970 is left as taxable profit. That profit is what Texas and the IRS charge against.
What that leaves you owing in Texas
| Self-employment tax | $3,528 |
| Federal income tax | $568 |
| Texas income tax | $0, no state income tax |
| Total tax | $4,097 |
| Effective rate on gross | 12.0% |
Earning more in Texas
A single filer taking the standard deduction, standard mileage method, this work as the only income, the calculator above handles the other filing statuses. Miles rise with earnings, so the deduction rises too, and the effective rate on gross climbs more slowly than it would for someone whose income grew without expenses attached:
| Volume | Gross | Mileage off | Taxable profit | Texas tax | Total tax | Rate on gross |
|---|---|---|---|---|---|---|
| Part-time | $11,000 | $1,485 | $9,515 | $0 | $1,344 | 12.2% |
| Steady side income | $34,000 | $4,455 | $29,545 | $0 | $5,083 | 15.0% |
| Full-time | $55,000 | $7,425 | $47,575 | $0 | $9,173 | 16.7% |
Texas specifics that change the number
Texas is a community property state. In community property states, income earned during marriage is generally owned equally by both spouses. This affects QJV eligibility, MFS filing strategies, and retirement account contribution rules.
Texas does have a business tax, the franchise (margin) tax, but it spares most of the self-employed twice over: sole proprietors are not taxable entities at all, and an LLC owes nothing until annualized revenue passes the no-tax-due threshold, $2,650,000 for the 2026 and 2027 report years. Above it the rate is 0.375% for retail and wholesale, 0.75% for everything else. An LLC under the threshold still files a Public Information Report each year, a form, not a tax.
Working across a Texas line
Services income is sourced to where the work was physically done. A job over the line can create a filing obligation in that state even for a single afternoon, and reciprocity agreements do not help, they cover wages paid by an employer, not self-employment income.
On $24,970 of profit, what the states around Texas would charge:
| State | Its tax | vs Texas |
|---|---|---|
| Louisiana | $374 | +$374 |
| Arkansas | $896 | +$896 |
| New Mexico | $933 | +$933 |
| Oklahoma | $1,089 | +$1,089 |
- Louisiana would take $374 more, $374 against Texas's $0.
- Arkansas would take $896 more, $896 against Texas's $0.
- New Mexico would take $933 more, $933 against Texas's $0.
- Oklahoma would take $1,089 more, $1,089 against Texas's $0.
Services and task work tax questions in Texas
How much should a Texas contractor set aside?
About 12.0% of gross on the $34,000 example, $4,097 across self-employment tax, federal income tax and nothing to Texas. In practice that means moving about $120 of every $1,000 payout into a separate account the day it lands, and sending roughly $1,024 to the IRS each quarter, no platform withholds any of this for you. Set aside from each payout rather than finding it in April.
Does the $34,000 on my 1099-NEC match what Texas taxes?
No. Texas taxes profit, not gross. After $9,030 of deductions the taxable figure is $24,970, so there is no Texas tax either way. But the federal side drops by $1,947. The form reports what the platform paid out, it knows nothing about your costs, and no one subtracts them for you. On this example 27% of the gross never becomes taxable income, but only for the contractor who kept the records to prove it.