One of the biggest financial advantages of living in Texas—especially for professionals, retirees, and entrepreneurs—is that the state does not collect a personal income tax. That means more of your paycheck stays with you, and over time, that adds up to serious savings.
How Much Can You Save Living in DFW?
Let’s say you earn $100,000 a year. If you lived in California, you could pay up to 9.3% in state income tax—that’s $9,300 per year. In New York, it could be closer to $6,500. In Texas? $0. Those savings can go toward housing, retirement, or travel.
- For higher earners, the savings are even more dramatic.
- No local income tax in Dallas or Fort Worth, either.
- Great for remote workers who’ve relocated from high-tax states.
But What About Property Taxes?
Texas doesn’t collect income tax, but it does have relatively high property taxes—averaging about 2.3% statewide. That’s higher than the national average, but in many cases, offset by lower home prices compared to states like California or New Jersey.
- Example: A $350,000 home in DFW may have an annual property tax bill around $8,000.
- Homestead exemptions and senior tax relief programs can reduce the burden.
Other Tax Benefits for DFW Residents
- **No tax on Social Security benefits** – A big plus for retirees.
- **No tax on pension income or 401(k) withdrawals** – Keep more of your retirement savings.
- **No estate or inheritance tax** – Simplifies financial planning.
- **Sales tax** is about 8.25% in most of DFW, so budgeting for purchases is smart.
Who Benefits Most from Texas’ Tax Structure?
- **Remote Workers** – Relocating from states like CA, NY, or IL can result in thousands in annual savings.
- **High Earners** – The more you make, the more you save.
- **Retirees** – No income tax + no tax on retirement income = golden years made easier.
- **Entrepreneurs** – Business-friendly climate plus low personal tax liability.
How to Make the Most of Your Budget in DFW
- Buy in areas with lower property tax rates (some suburbs are under 2%).
- Apply for the Texas Homestead Exemption if you own your home.
- Explore 55+ communities with tax-friendly services.
- Use a tax advisor to optimize relocation and retirement strategies.
Final Thought: It’s Not Just What You Make—It’s What You Keep
Texas may not be the cheapest state overall, but when it comes to taxes, it punches above its weight. DFW residents keep more of what they earn, and that’s a big part of why the region continues to grow.
Want to learn more about moving to North Texas? Check out our guides on cost of living, housing, and best neighborhoods in DFW.
Helpful Tax Resources
Here are a few trusted sources to learn more about Texas state tax policies and exemptions:
- Texas Comptroller of Public Accounts – https://comptroller.texas.gov/
- Texas Property Tax Exemptions – https://comptroller.texas.gov/taxes/property-tax/exemptions/
- Texas Sales Tax Rates – https://comptroller.texas.gov/taxes/sales/
- Overview of Texas Tax Structure – https://comptroller.texas.gov/economy/fiscal-notes/2021/july/no-income-tax.php
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