Comparison•2025 Tax Year•Last verified: January 2026
Texas vs Florida: Side Hustle Tax Comparison 2025
Compare Texas and Florida taxes for freelancers and gig workers. Both states have no income tax - see which is better for your side hustle.
Texas and Florida are America's two largest no-income-tax states, making them both extremely attractive destinations for side hustlers and freelancers seeking to minimize their tax burden. But which one is better for your specific situation?
Since both states have zero state income tax, the comparison comes down to other factors: property taxes, sales taxes, cost of living, climate, and business environment. This guide helps you understand the full picture beyond just income tax rates.
**Why This Comparison Matters:**
Texas and Florida compete for the same tax-conscious migrants:
- **Both have zero income tax**: No state income tax in either state
- **Population magnets**: Both states are among the fastest-growing in the US
- **Business-friendly**: Both rank highly for entrepreneurs and self-employed workers
- **Different economies**: Texas is diverse (tech, energy, finance); Florida is tourism/services heavy
- **Climate choice**: Texas has hot summers and mild winters; Florida is subtropical year-round
For side hustlers, since income tax is the same (zero), the choice often comes down to lifestyle, cost of living, and which state's economy better suits your freelance work.
Side-by-Side Tax Comparison
| Metric | Texas | Florida |
|---|---|---|
| State Income Tax Rate | 0% (no income tax) | 0% (no income tax) |
| State Tax Filing Required | No | No |
| Federal SE Tax | 15.3% | 15.3% |
| Est. Tax on $15K Side Hustle* | ~$5,424 | ~$5,424 |
| Property Tax (Avg Rate) | 1.63% | 0.91% |
| Sales Tax (State + Avg Local) | 8.20% | 7.01% |
| Annual Property Tax on $400K Home | ~$6,520 | ~$3,640 |
| Homestead Exemption | Up to $40,000 | Up to $50,000 |
| Hurricane Risk | Gulf Coast only | Statewide |
*Assumes single filer with $60,000 W-2 income + $15,000 net side hustle income. Actual taxes vary based on deductions, filing status, and total income.
Texas Analysis
**Texas Tax Analysis for Side Hustlers**
Texas offers zero state income tax combined with a large, diversified economy and growing tech sector.
**Key Texas Tax Facts (2025):**
- **State Income Tax**: 0%
- **Tax Type**: None
- **Filing Requirement**: No state income tax return required
- **Franchise Tax**: Only for businesses over $2.47 million revenue
- **Property Tax**: Higher than national average (1.63%)
**Example**: If you earn $60,000 from your W-2 job and $15,000 from side hustle income (net of expenses) in Texas:
- Federal SE Tax: ~$2,124
- Federal Income Tax on side income: ~$3,300
- Texas State Tax: $0
- **Total Tax on Side Hustle: ~$5,424** (36.2% effective rate)
Texas advantages include a booming tech scene in Austin, diverse industries in Dallas and Houston, and no income tax on any earnings.
Florida Analysis
**Florida Tax Analysis for Side Hustlers**
Florida also has zero state income tax, combined with a tourism-driven economy and year-round warm weather.
**Key Florida Tax Facts (2025):**
- **State Income Tax**: 0%
- **Tax Type**: None
- **Filing Requirement**: No state income tax return required
- **Corporate Tax**: 5.5% on C-corps only (not sole proprietors)
- **Property Tax**: Lower than Texas (0.91% average)
**Example**: Same scenario—$60,000 W-2 job and $15,000 from side hustle income (net of expenses) in Florida:
- Federal SE Tax: ~$2,124
- Federal Income Tax on side income: ~$3,300
- Florida State Tax: $0
- **Total Tax on Side Hustle: ~$5,424** (36.2% effective rate)
**Same income tax burden as Texas** – the difference is in property taxes, insurance costs, and lifestyle.
Florida advantages include lower property taxes, year-round beach access, and strong tourism/hospitality industries.
Calculate Your Side Hustle Taxes
Use our calculator to see exactly what you'd owe in each state. Try entering your numbers, then switch between Texas and Florida to compare.
Which State Is Right for Your Side Hustle?
**Texas May Be Better If You:**
- Work in tech, energy, or finance industries
- Want access to Austin's startup ecosystem
- Prefer a more diverse climate (four seasons in some areas)
- Plan to rent rather than buy (property taxes less relevant)
- Want proximity to other states (central US location)
**Florida May Be Better If You:**
- Plan to buy a home (significantly lower property taxes)
- Work in tourism, hospitality, or related industries
- Want year-round warm weather and beach access
- Prefer being closer to the East Coast and Caribbean
- Are semi-retired or combining side hustle with lifestyle
**Important Considerations:**
1. **Property taxes matter if buying**: On a $400,000 home, you'd pay ~$2,880 more per year in Texas than Florida. Over 10 years, that's nearly $30,000.
2. **Insurance costs in Florida**: Florida has the highest homeowner's insurance rates in the nation due to hurricane risk. This can offset property tax savings.
3. **Cost of living varies by city**: Miami is expensive; Jacksonville is affordable. Austin is pricey; Houston is more moderate. Compare specific cities, not just states.
4. **No income tax audit risk**: Unlike moving from CA or NY, neither TX nor FL will audit you for leaving—because there's nothing to leave.
5. **Industry fit**: Austin is better for tech; Miami for international business; Houston for energy; Tampa for healthcare. Match your freelance niche to the local economy.
Frequently Asked Questions
Is Texas or Florida better for side hustlers tax-wise?
For income tax purposes, they're identical—both have zero state income tax. The difference comes down to property taxes (Florida is lower), sales taxes (Florida is slightly lower), and homeowner's insurance (Florida is much higher due to hurricanes). If you're buying a home, Florida's lower property taxes often win. If renting, it's largely a lifestyle choice.
Do I need to file state taxes in Texas or Florida?
No. Neither Texas nor Florida has a state income tax, so there's no state income tax return to file. You only need to file your federal return and any returns for states where you actually earned income (if applicable).
Which state is better for remote tech workers?
For tech specifically, Texas (especially Austin) has the edge with its growing tech ecosystem, major company offices (Tesla, Oracle, Apple expansion), and thriving startup scene. Florida's tech presence is smaller but growing, particularly in Miami. Both offer zero income tax, so it comes down to career opportunities and lifestyle preference.
Related Comparisons
Sources
- • Texas Comptroller of Public Accounts
- • Florida Department of Revenue
- • IRS Publication 334 - Tax Guide for Small Business
- • Tax Foundation - State Tax Data 2025
- • US Census Bureau - Property Tax Data