Texas is one of only eight states that have no personal income tax. Most of the taxes in Texas are sales taxes, as well as taxes on businesses and specific industries. Here’s what that means and a guide to taxes in Texas.
As a resident of Texas, you’ll pay no personal state income tax. That’s one less thing to file come tax season. The trade-off is that the state sales tax rate is 6.25%, which is fairly high compared to other states. And depending on where you live, your local sales tax could be as high as 8.25%.
Texas Tax Tips
There are also a few other taxes that residents of Texas pay:
Businesses in Texas are subject to a franchise tax. This is a tax on the privilege of doing business in the state, and it’s based on the business’s gross receipts.
There is an oil production tax, which is imposed on each barrel of oil produced in Texas. This helps to fund the state’s regulatory agency, the Texas Railroad Commission.
There is a gas production tax, which is imposed on every thousand cubic feet (MCF) of natural gas produced in Texas. The oil production tax helps to fund the state’s regulatory agency, the Texas Railroad Commission.
There is also a hotel occupancy tax, which is imposed on each night’s stay at a hotel or motel. This tax ranges from 6% to 8%, depending on the municipality.
What to do when you struggle to pay your taxes:
If you find yourself struggling to pay your taxes, there are a few options available to you. You can set up a payment plan with the IRS or your state tax agency. This allows you to spread out your payments over time, which can make them more manageable.
You can also request an extension, which will give you additional time to file your return (although it’s important to note that this does not extend the deadline for paying any taxes owed).
If you’re still having trouble after taking advantage of these options, you may want to consider hiring a tax professional who can help you resolve your tax debt.
What about debt?
If you’re struggling with tax debt, you’re not alone. In fact, the IRS reports that there are currently more than 14 million taxpayers who owe back taxes.
What is Debt Relief?
There are a few different options available when it comes to debt relief, and the best option for you will depend on your individual circumstances. Contact Freedom Debt Relief to learn more about your options.
General Debt Relief Options
Debt settlement: This is where you negotiate with your creditors to agree on a reduced payoff amount. This can be a great option if you’re unable to make your minimum payments, but it will likely have a negative impact on your credit score.
Debt consolidation: This is where you take out a new loan to pay off your existing debts. This can be a good option if you’re able to get a lower interest rate on the new loan, but it’s important to make sure that you don’t end up paying more in the long run.
Bankruptcy: This is the last resort option that should only be considered if you’re unable to make any progress on your debt. It will have a very negative impact on your credit score, but it can help you get out of debt if you’re unable to do so any other way.
Hiring a tax professional: If you’re still having trouble after taking advantage of these options, you may want to consider hiring a tax professional who can help you resolve your tax debt.
In Closing
As you can see here as part of a guide to taxes in Texas, there are a few different taxes that Texans have to pay. However, overall, the tax burden in Texas is relatively low when compared to other states. So, if you’re looking for a place to live with low taxes, Texas may be a good option for you.
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