Tax Services in Dallas-Fort Worth, TX:
No Income Tax Means Plan Federal

Texas has no state income tax, and that fact does something funny to business owners: it convinces them there's no tax planning to do. The opposite is true. When the state stops taxing your income, all of the leverage moves to your federal return — the entity election, depreciation timing, retirement, and, for the many companies relocating into Dallas-Fort Worth, untangling tax obligations left behind in higher-tax states. Add the Texas Franchise (Margin) Tax, and a DFW business has plenty to plan around; it just isn't where owners expect to look.

This guide walks the moves that actually cut a DFW business's tax bill — the federal levers, the margin tax, the entity math, and the relocation cleanup — delivered remotely.

By Carrie Anderson — Co-Founder, 406 Consulting Group. Former commercial banker and multi-state advisor who helps DFW owners plan proactively — federal strategy, entity choice, the margin tax, and multi-state cleanup — with the whole financial picture in view.

Here's the mental shift a DFW owner has to make. In a state with an income tax, a lot of planning is about trimming the state bill. In Texas, that bill is zero — so every dollar of tax leverage is on the federalside. That's actually good news: the federal levers are the biggest ones anyway (entity choice, depreciation, retirement plans, timing), and none of them get muddied by a state income tax layer. The mistake is treating "no state income tax" as "nothing to plan" and coasting into April — leaving the federal savings on the table.

There is one Texas-specific bill to handle, though — and it confuses almost everyone.

Texas's one broad business tax is the Franchise Tax, universally called the "margin tax." It applies to entities with revenue above a no-tax-due threshold (around $2.47 million) and is calculated on your margin — revenue minus certain deductions — not your profit. The rate is 0.375% for retail and wholesale and 0.75% for everyone else, and there are a few ways to compute the margin (including an EZ method for smaller filers) that can produce meaningfully different bills. The planning here is real: choosing the right computation method and managing the deductions that reduce margin can save actual money for a business over the threshold.

Confirm current rates, thresholds, and methods with the Texas Comptroller. Now to the federal move most profitable owners should run.

In many states, deciding whether to elect S-corp status means weighing federal savings against a state-level cost — a franchise tax, a net-worth tax, an extra state levy on the S-corp. In Texas, that complication mostly disappears: with no state income tax, the S-corp election is a clean federal play. Once profit consistently clears roughly $80,000–$100,000, electing lets you split profit into a reasonable salary and distributions, and the distributions escape the ~15.3% self-employment tax — often several thousand dollars a year, with no state offset eating into it. It's one of the simpler, cleaner wins available to a profitable DFW owner.

For the many businesses that arrive in DFW from elsewhere, the biggest tax dollars are often somewhere else entirely.

Dallas-Fort Worth is a landing pad for companies leaving higher-tax states, and the move creates a tax project most owners underestimate. Simply relocating doesn't automatically end your obligations in the state you left: if you still have employees, property, or enough sales there, you can keep nexus— and the filing duties that come with it — long after the headquarters sign changes. Done wrong, you get taxed in two states at once; done right, you cleanly de-register, apportion your final-year income correctly, and shut the door. For a relocating business, that cleanup is frequently where the biggest dollars and the biggest risks sit.

Whether you're new to Texas or long established here, the federal levers are the same — and they're where the recurring savings live.

With the state out of the picture, these are where a DFW owner's planning pays off:

One more Texas tax deserves a clear head, because owners routinely confuse it with the margin tax.

Texas sales and use tax (around 8.25% in DFW) is a completely separate thing from the margin tax, and mixing them up is common. The traps are familiar but costly: treating collected sales tax as spendable cash when it belongs to the state, forgetting use taxon equipment and supplies bought out of state where no Texas tax was charged, and — for contractors — misapplying the special rules for construction contracts. Clean books that treat sales tax as the liability it is keep this boring, which is exactly what you want.

Tie the pieces together and one question drives the whole plan: how should you be structured?

Because Texas doesn't tax income, the entity decision is refreshingly focused: it's mostly about federalself-employment tax and the margin tax, not a stack of state income taxes. For most profitable owners that means the LLC-taxed-as-S-corp path, once profit justifies it, delivers clean federal savings — while keeping an eye on whether your revenue puts you over the margin-tax threshold and which computation method fits. It's simpler than the same decision in a high-income-tax state, but "simpler" still rewards running the actual numbers rather than guessing.

None of these levers — federal planning, the margin tax, entity choice, relocation cleanup — require a face-to-face meeting.

Tax planning is analysis and conversation — secure document exchange, screen-shares, and a plan made before year-end — none of which needs a Dallas or Fort Worth address. The proof is in how our existing clients already work: roughly 80% of our local clients run the entire relationship remotelyand never set foot in the office. What matters for a Texas business is an advisor who knows the federal levers, the margin tax, and multi-state cleanup, and who is proactive all year — not one who happens to be nearby.

No state income tax is a gift. Turning the federal side into money you keep is the work.

FAQ: DFW Tax Questions