Short answer: before December 31, Texas small business owners should do four things: get the books reconciled and current, time major equipment purchases, set up 1099 vendor records, and project their tax bill with a CPA while there is still time to act.
The IRS October extension deadline has just passed, which makes this the best moment to look ahead. Anything that lowers your 2026 tax bill generally has to happen by year-end, not in April.
Why Does Year-End Tax Planning Matter for Small Businesses?
Tax planning is only useful while you can still change the outcome. Once the year closes, a tax preparer can report what happened, but cannot change it. Planning in Q4 means you can adjust purchases, payroll, and income timing while those decisions are still open.
What Should a Small Business Do Before December 31?
- Reconcile your books through October. Clean, categorized records show your real profit, which is the number your tax bill is built on.
- Review equipment and vehicle purchases. Federal law currently allows generous first-year deductions, including Section 179 expensing and bonus depreciation, but the asset generally has to be placed in service by December 31.
- Collect W-9s from your vendors. For payments made in 2026, the 1099-NEC and 1099-MISC reporting threshold is $2,000, up from $600. Knowing who crosses it now avoids a scramble in January.
- Check your estimated tax payments. The fourth-quarter estimate for owners is generally due in mid-January. Underpaying can mean penalties and interest.
- Project your year-end profit. A quick projection shows whether you are on track for a surprise tax bill, so you can plan for it.
Does Texas Have a State Income Tax for Small Businesses?
Texas has no state personal income tax, but that does not mean there is nothing to plan for. Federal income tax, payroll taxes, sales tax, and the Texas franchise tax can all apply depending on how your business is set up.
When Should You Talk to an Accountant?
Ideally, in the fourth quarter, not in March. Your accountant needs time to review your numbers, model options, and help you act before the year closes.
The Bottom Line
The best tax savings are usually decided in Q4. Clean books and a year-end projection give you the chance to make those decisions on purpose instead of by default.
Want a Clear Picture of Your Year-End Tax Position?
Ledgerment helps Texas small business owners keep their books current, plan ahead for taxes, and avoid surprises at filing time.
Have questions about your year-end tax planning? Get in touch with Ledgerment.
