How Local Tax Laws Affect Round Rock Residents: What You Need to Know

Navigating tax laws can be complex, especially when local and state regulations frequently change. For residents and businesses in Round Rock, staying informed about these changes is crucial to ensuring compliance and minimizing your tax burden. Let’s explore some recent updates to local tax laws in Round Rock and Texas tax laws, along with actionable insights on how they affect both individuals and businesses.

1. Texas Franchise Tax: Simplified Reporting for Small Businesses

The Texas franchise tax, often referred to as the state’s business tax, continues to evolve. Recent changes have increased the no-tax-due threshold to $1.23 million in total revenue for 2024, providing relief to many small businesses in Round Rock.

Impact on Round Rock Businesses:

Small businesses with revenues below this threshold are exempt from paying the franchise tax.
For businesses above the threshold, filing remains mandatory, but tax rates have remained low at 0.375% for retail and wholesale businesses and 0.75% for other businesses.

Tip: Work with a Round Rock CPA to ensure accurate reporting and to explore deductions that could further reduce your taxable margin.

2. Homestead Exemption Expansion

In 2023, Texas voters approved an increase in the homestead exemption for school district taxes, raising it from $40,000 to $100,000. This change significantly lowers property taxes for homeowners across the state, including Round Rock residents.

Impact on Homeowners in Round Rock:

Many homeowners will see a noticeable reduction in their annual property tax bills.
The exemption is especially beneficial for retirees and those on fixed incomes.

Tip: If you haven’t updated your homestead exemption, make sure to file it with Williamson County. A local Round Rock CPA can guide you through the application process.

3. Sales Tax Rates and Compliance

Round Rock’s sales tax rate remains competitive at 8.25%, combining state, county, and city portions. However, businesses must stay vigilant in accurately collecting, reporting, and remitting these taxes to avoid penalties. Additionally, with the rise of e-commerce, businesses that sell online must navigate complex nexus laws regarding sales tax collection.

Impact on Round Rock Businesses:

Local businesses need to ensure compliance with both in-store and online sales tax collection.
Failure to accurately report sales tax can result in audits and fines.

Tip: Use accounting software integrated with sales tax tools, or consult with a Round Rock CPA for reliable tax reporting and compliance.

4. Texas Business Personal Property Tax Changes

Starting in 2024, businesses with tangible personal property valued below $25,000 are exempt from filing a business personal property rendition. This is an increase from the previous $20,000 threshold.

Impact on Round Rock Businesses:

Small businesses with limited equipment and inventory can benefit from reduced filing obligations.
Larger businesses still need to file accurate renditions, which could require appraisals and documentation.

Tip: Partner with a CPA in Round Rock to evaluate your business assets and file renditions correctly.

5. Texas Tax Code Changes for Gig Workers

Texas is beginning to enforce stricter tax reporting requirements for gig workers and independent contractors. The state now mandates 1099-K reporting for digital payment platforms like Venmo or PayPal when income exceeds $600 annually (previously $20,000).

Impact on Round Rock Residents:

Gig workers must carefully track income from multiple platforms to avoid underreporting.
Failure to report income can lead to penalties and increased IRS scrutiny.

Tip: If you’re a gig worker, consult a Round Rock CPA to ensure your tax filings are accurate and reflect all income sources.

6. Federal and State Nexus for Remote Workers

The shift to remote work has introduced new challenges for employees and businesses alike. Texas remains an attractive state due to its lack of state income tax, but businesses with remote workers in other states may be subject to new tax liabilities under nexus rules.

Impact on Round Rock Businesses and Employees:

Businesses must determine if they have tax obligations in states where employees are located.
Remote employees in Round Rock may need to file taxes in other states depending on their employer’s location.

Tip: A Round Rock CPA can help businesses and employees navigate these complexities to ensure compliance and minimize tax burdens.

Why Work with a Round Rock CPA?

Keeping up with changes to local tax laws in Round Rock and Texas tax laws can be overwhelming, but you don’t have to navigate it alone. A trusted CPA in Round Rock can:

Provide personalized advice tailored to your financial situation.
Help you identify opportunities for tax savings.
Ensure compliance with state and local tax laws.
Streamline your tax preparation and filing process.

Whether you’re a business owner looking for guidance or a resident needing help with personal taxes, Valentine & Associates CPAs is here to support you with tax services.

Conclusion

Understanding how local and state tax laws impact your finances is critical for staying compliant and optimizing your tax strategy. Whether it’s the new homestead exemption, business tax thresholds, or changes affecting gig workers, staying informed will help you avoid penalties and maximize savings.

If you have questions about how recent tax changes in Texas affect you, reach out to Valentine & Associates CPAs, your trusted partner for tax services in Round Rock.

Ready to simplify your taxes?

How Local Tax Laws Affect Round Rock Residents: What You Need to Know