Virtual Assistant Taxes in Texas - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Virtual Assistant in Texas

The Texas landscape offers a thriving environment for Virtual Assistants, providing flexibility and opportunity to support businesses across the state and beyond. However, alongside the freedom of self-employment comes the responsibility of managing taxes effectively.

As a Virtual Assistant operating in Texas, the federal government requires reporting all business income and expenses on Schedule C (Profit or Loss From Business) with Form 1040. Crucially, earnings exceeding $400 necessitate the payment of self-employment tax, covering both Social Security and Medicare contributions. Accurate record-keeping throughout the year is paramount for a smooth tax filing process.

How Texas Handles Gig Worker Taxes

The big perk in the Lone Star State is no personal income tax. However, be aware of the Texas Franchise Tax. While it has a high threshold (over $1.2 million in revenue) that rarely applies to solo gig workers, it's a key part of the state's business tax structure. Virtual Assistants operating as sole proprietorships or single-member LLCs generally won’t encounter this tax unless their revenue significantly exceeds this amount. However, it’s important to understand that the Franchise Tax applies to margins, not total revenue, and certain industries have different rules. Even if not currently liable, monitoring revenue growth is advisable. Texas does not have a state-level equivalent to the federal self-employment tax; however, federal self-employment taxes still apply. Furthermore, while Texas doesn’t have a state income tax, sales tax may be applicable depending on the services provided. For example, if a Virtual Assistant provides digital products or certain services subject to sales tax, they are responsible for collecting and remitting those taxes to the state. Staying informed about potential changes to Texas tax laws is crucial, and resources are readily available through the Texas Comptroller’s office.

For more information on Texas taxes, visit the Texas Comptroller of Public Accounts website.

Key Tax Deductions for Home-Based Virtual Assistants

• Home Office Deduction: This deduction allows for the write-off of expenses related to the portion of your home exclusively and regularly used for business. “Exclusive use” means that space is only used for work, and “regular use” means it’s used consistently for business activities. You can calculate the deduction using the simplified method ($5 per square foot, up to 300 square feet) or the actual expense method, which requires tracking mortgage interest, rent, utilities, and depreciation.
• Hardware & Software: The cost of essential tools like computers, webcams, printers, and software subscriptions (such as Adobe Creative Cloud, project management tools, or website hosting) are generally deductible as business expenses.
• Internet & Phone Bill: If you use your internet and phone for both personal and business purposes, you can deduct the percentage attributable to business use. Carefully track how much time is spent on business-related activities to determine this percentage.

Note on Mileage: As a home-based worker, mileage is not a primary deduction, but can be claimed for occasional client meetings, trips to the post office for business, or other work-related errands. Keep a detailed mileage log if claiming this deduction.

The 15.3% Self-Employment Tax Explained

The 15.3% self-employment tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. This tax is essentially the equivalent of the FICA taxes withheld from employees’ paychecks, but as a self-employed individual, you are responsible for paying both the employer and employee portions.