Financial planning in Texas
No income tax, no estate tax, both written into the constitution.
Direct answer
Texas has no personal income tax, and since November 2025 its constitution goes further: voters added outright bans on taxing individual capital gains and on state estate, inheritance and death taxes, alongside the existing ban on income and wealth taxes. For a household diversifying equity or selling a business, the state layer is simply gone and everything turns on federal timing. The trade-off is property tax, which funds what an income tax would elsewhere.
Texas tax treatment
Figures are for tax year 2026, each read from the source beside it. Thresholds and rates are revised regularly; confirm the current year before acting on any of them. What these rules change in a household’s plan, from the order accounts are drawn to the timing of Roth conversions, is set out in the retirement tax planning overview.
The Texas Constitution prohibits a personal income tax, and the November 2025 amendments added bans on taxing individual capital gains, realized or unrealized, and on state estate, inheritance and death taxes.
Pensions, IRA and 401(k) withdrawals and Social Security face no Texas tax. The state's share of a retiree's budget arrives through property tax instead.
Texas has no estate or inheritance tax, and the 2025 amendments bar the legislature from creating one. Only the federal exclusion matters — $15 million per person for deaths in 2026.
Worth doing here
Things that are worth doing in Texas that would not be worth doing, or would work differently, somewhere else.
With no state layer, the question of when to convert to Roth or sell a concentrated position is purely a federal-bracket question, which makes the arithmetic cleaner and the low-income years between retiring and required distributions more valuable.
For a household that has moved here, the planning is about the former state: when its residency actually ended, and whether equity or deferred compensation earned there is still taxable there when it pays out.
Federal and state, together
With no state income tax, property tax is the only meaningful state-and-local deduction, and most Texas households stay under the federal cap. Federal planning is the whole game here.
The federal deduction for state and local taxes is $40,400 for tax year 2026 and begins to shrink above $500,000 of modified adjusted gross income, down to a floor of $10,000, and is scheduled to return to $10,000 after 2029. The federal estate tax exclusion is $15,000,000 per person for deaths in 2026. IRS, Instructions for Schedule A (2025), line 5e; IRS, tax year 2026 inflation adjustments (Rev. Proc. 2025-32).
Cities
Each city page covers what is local — how households there tend to be paid, what the first meeting usually covers — and inherits this state layer.
Tesla's Gigafactory Texas reported roughly 16,500 Austin-area employees at the end of 2025, Dell employs about 7,400 at its Round Rock headquarters, and Apple's Austin site is its largest in the country outside California.
The metroplex has drawn a steady stream of corporate relocations, including Charles Schwab, which moved its headquarters to Westlake in 2021.
Houston is the headquarters city of much of the American energy industry, with ExxonMobil, Chevron, ConocoPhillips and Phillips 66 among the public companies whose employees hold restricted stock and options, and home to the Texas Medical Center, the largest medical complex in the world, whose physicians and administrators hold 403(b) and 457 plans instead.
San Antonio's households are paid by USAA and the financial-services and insurance sector around it, by the H-E-B grocery headquarters and Valero, by a large health-care and biomedical sector, and above all by Joint Base San Antonio and the military and civilian retirees who stay in the city after service.
Fort Worth is headquarters to American Airlines and BNSF Railway and home to Lockheed Martin's aeronautics plant, Alcon's U.S.
Watch and learn
Start with three videos selected for this page, then use the controls to explore every published Flames FP video guide.
Videos 1–3 of 14
Common questions
No. Texas has no personal income tax, and the constitution prohibits one.
No, and since the November 2025 constitutional amendments the state is barred from imposing estate, inheritance or death taxes. Only the federal estate tax applies.
Property tax. Texas funds through property tax what other states fund through income tax, so it is the state cost worth planning around, particularly in retirement.
No. Flames Financial Planning is based in Minnetonka, Minnesota, and serves Texas households through a virtual planning relationship. This page describes the service area and does not claim a Texas office.
Yes. State tax treatment shapes withdrawal order, Roth-conversion timing, and where investments are best held. Planning includes tax guidance and review of a completed return; Premier adds tax projections and preparation and filing through an independent tax partner.
Next step
A discovery meeting covers your situation, what you pay now, and whether a fixed quarterly membership is a better fit.
