Real Estate CPA And Fractional CFO Services for Texas Investors
Texas has no personal income tax, but rental portfolios here still carry real tax weight through property taxes, the franchise (margin) tax, and federal depreciation rules. NexusWorks gives Texas landlords, flippers, and syndicators one team for bookkeeping, tax planning, and CFO-level reporting, so every acquisition and protest decision is backed by clean numbers.
Property tax bills eat into cash flow
Appraisal increases go unchallenged
LLCs drift into franchise tax filings
Serving investors in Texas, Florida, Arizona, Nevada, Colorado, Tennessee, Delaware, and California.
Where Texas Rental Portfolios
Lose Money Quietly
Because there is no state income tax, many Texas owners assume the hard part is federal. In practice, the biggest leaks show up in appraisal notices, entity filings, and books that cannot support a lender or a protest:
Rising county appraisals are accepted without review, even when comparable sales or income data would support a lower value at the appraisal review board.
Investors assume an LLC holding rentals counts as a passive entity, but rent from real property does not qualify as passive income under Texas franchise tax rules.
Operating expenses, repairs, and capital improvements are lumped together, so depreciation schedules are wrong and deductions are lost.
Short-term rentals in Austin, San Antonio, and Houston collect hotel occupancy tax at the state and local level, and owners often file late or not at all.
Banks and DSCR lenders request trailing twelve-month statements and rent rolls that take weeks to assemble from scattered spreadsheets.
Investors who also own property in other states file nonresident returns there, and those obligations are easy to miss when Texas itself requires none.
Fixing this takes more than an annual tax return. It takes books, tax strategy, and reporting that are built to work together all year.
Based in Texas? See our CPA, bookkeeping and tax services for Texas businesses, including state tax planning and compliance.
Texas Rules That
Shape Investor Returns
Why Texas Investors Benefit From Specialized Financial Guidance
Texas spares investors a state income tax, but that shifts the pressure elsewhere. The core issue is:
Federal tax carries the full load. With no state tax on gains, a high-income investor still faces a 20% federal long-term rate, the 3.8% net investment income tax, and up to 25% on unrecaptured depreciation. Timing a sale, or deferring it through a 1031 exchange, directly affects what you keep.
Property Taxes Are the Main State-Level Cost
Texas funds local government largely through property taxes, and effective rates are among the highest in the country. Homestead caps limit increases on a primary residence, and a temporary 20% cap covers many non-homestead properties valued under about $5 million, but investors still need to track each notice and protest deadline, usually May 15.
The Franchise Tax Reaches Most Rental LLCs
LLCs, partnerships with limited liability, and corporations file franchise tax reports with the Texas Comptroller. Entities under the no-tax-due revenue threshold, currently about $2.65 million, owe no tax but must still submit an information report each May. Missing it can forfeit the entity's right to do business and weaken liability protection.
No Transfer Tax, but Limited Price Transparency
Texas does not charge a state deed transfer tax, which lowers the cost of buying and selling. It is also a non-disclosure state, so sale prices are not public. That makes well-documented income and expense records more important when you protest an appraisal or present a property to a lender.
Federal Strategy Still Drives Most Savings
With no state income tax to offset, cost segregation, bonus depreciation, 1031 exchanges, and real estate professional status carry the full weight of tax planning for Texas owners.
How NexusWorks Supports Texas Real Estate Investors
Each service is designed around what Texas investors deal with in practice: appraisal cycles, entity reports, and lender-ready financials.
Tax Strategy and Filing:
Federal returns for individuals, partnerships, and S corporations, cost segregation timing, 1031 exchange coordination, franchise tax and information reports, and out-of-state nonresident filings. We schedule planning before year-end, not after.
The same team handles your books, your returns, and your reporting, so nothing is lost between providers.
Property-Level Bookkeeping:
Monthly reconciliations for each property and entity, with clear separation of repairs, improvements, and owner contributions. Your appraisal protests and lender packages start from records that already hold up.
Fractional CFO Support:
Rent-roll and cash flow modeling, refinance and DSCR packages, hold-versus-sell analysis, and investor reporting for syndications. Useful once a Texas portfolio outgrows a single spreadsheet.
Want a clearer view of your Texas portfolio?
Talk with a CPA-led team about your entity setup, appraisal exposure, and cash flow before your next purchase or refinance.
What Texas Investors
Get With NexusWorks
A team that works with rental owners, developers, and syndicators every day, so Texas-specific items like appraisal protests and franchise reports are part of the routine.
Bookkeeping, tax, and CFO work sit with one group, which shortens turnaround and removes hand-offs between separate firms.
Every return and planning position is reviewed by a CPA before it is filed.
Remote service anywhere in Texas, from Dallas-Fort Worth to the Rio Grande Valley, using QuickBooks, Xero, and a secure client portal.
Flat, published pricing with no surprise retainers. See nexusworks.cpa/pricing.
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Frequently Asked Questions
Texas has no personal income tax, so rent you earn as an individual is taxed only at the federal level. If the property sits in an LLC or partnership, that entity may still need to file a franchise tax report with the Comptroller, even when no tax is due.
Often, yes. You can protest the appraised value with your county appraisal district, usually by May 15 or 30 days after your notice arrives. Strong protests use rent rolls, operating statements, repair costs, and comparable sales. We prepare the financial support your protest needs.
It can be, especially for larger multifamily or commercial buildings. Because Texas has no income tax, the benefit comes entirely from federal deductions. We weigh your hold period, passive activity limits, and future recapture before recommending a study.
Yes. Clients in Houston, Austin, San Antonio, El Paso, and smaller markets share documents through a secure portal, and we work directly in QuickBooks or Xero. You receive monthly reports and can reach your team when questions come up.
Most LLCs must file. If annualized revenue is under the no-tax-due threshold, the entity owes nothing but still files a Public Information Report each year. Rental income does not qualify for the passive entity exemption, so we review each entity's filing status as part of onboarding.