Austin Households and Federal Tax
Austin residents do not file a state income tax return, but their federal returns often involve more than a W-2. Technology employees have RSUs, stock options and employee share plans; founders have early stock and investments; state and university employees have public pensions; and musicians, film crews and designers earn irregular self-employment income. BOMCAS prepares federal returns for Austin households remotely.
Community property and homestead rules are set out in Texas personal tax preparation; this page is about stock, pensions and freelance work in Austin.
RSUs, Options and Early Exercises
RSUs are wages when they vest, and a later sale reports only the gain or loss after vesting, so brokerage basis must be corrected if it omits that value. Incentive stock options can trigger alternative minimum tax on exercise even if the shares are not sold. Founders and early employees who exercise options before vesting may make an 83(b) election within 30 days to fix the tax at today's value, but the election can be harmful if the company fails. We review the grant and exercise documents before the decision.
Public Employees and UT Staff
State employees generally participate in the Employees Retirement System, while University of Texas faculty and staff may choose the Teacher Retirement System or the Optional Retirement Program. Distributions are federally taxable unless they come from Roth contributions, and rollovers at retirement need to be direct to avoid withholding. Federal law repealed the Windfall Elimination Provision and Government Pension Offset, so retirees with a public pension and Social Security should check that their benefits were adjusted.
Musicians, Crew and Freelancers
Musicians, session players, sound engineers, production crew, designers and independent consultants report self-employment income on Schedule C, with equipment, travel, home studio and other business costs deducted. A tour or production in another state can require a return there, and foreign gigs raise foreign tax credit questions. Quarterly estimated payments keep an uneven income year from ending in a large balance.
Rental Homes and Short Stays
Austin's short-term rental market is tied to events, UT football weekends and year-round visitors. Hosts report rent and expenses on Schedule E, or in some cases Schedule C if they provide substantial services. State and city hotel tax applies to stays under 30 days, and the city requires a licence. A home used both personally and as a rental has expenses divided by days.
Newcomers From Other States
People moving to Austin from California or New York still file a part-year return in the state they left, and stock awards earned there can remain partly taxable there after the move. Keep records of the move date and of where stock compensation was earned.
Property Tax and Giving
Property tax is high in Austin and counts toward the federal state and local tax deduction if you itemise. There is no state income tax, so the sales tax option is also worth comparing. Gifts of appreciated shares or a donation to a donor-advised fund can bunch deductions into a high-income vesting year.
What to Send
- W-2s, brokerage statements and equity award reports.
- Option exercises and any 83(b) election.
- 1099-R forms for public pensions.
- Freelance and rental income and expenses.
- Last year's return and moving records.
Austin Personal Tax Preparation Questions
When are RSUs taxed?
At vesting as wages. Later gains or losses are measured from that value, so brokerage basis often needs adjusting.
How long do I have for an 83(b) election?
30 days from the transfer of the restricted stock, with no extension.
Did the Social Security pension offset rules change?
Yes. Federal law repealed the Windfall Elimination Provision and Government Pension Offset.
Do I report short-term rental income?
Yes, with expenses and depreciation, and hotel tax may apply as well.
Talk to BOMCAS About Personal Tax Preparation in Austin
Founders and owners need their company return and records ready first. Equity events run through payroll, hosts deal with hotel tax, option exercises belong in planning before the deadline, missed years in late filing, and Canadian accounts under cross-border tax. The rest of our statewide coverage runs through business filings, sales tax, bookkeeping, payroll services, planning ahead, back tax work and Canada–U.S. matters, with the Texas overview as a starting point.
Tell us what you are working on in Austin and BOMCAS will reply with the next steps and the records needed for a quote. Send a note from the contact page or the form below, call 780-667-5250 or write to info@bomcas.ca. The Austin overview covers every Austin service. This is general information, not advice for a particular taxpayer.