2026 Year-End Tax Checklist for Texas Small Businesses

The last quarter of the year is the cheapest time to fix a tax problem — everything is still fixable before January. Here’s what Texas small business owners should check off before December 31.

Clean Up Your Books First

Nothing else on this list is reliable if your bookkeeping is behind. Before you look at a single deadline, make sure every bank and credit card transaction through today is entered and categorized. If a few months slipped, now is the time to catch up — not in April.

Reconcile Every Account

Match your books against actual bank, credit card, and loan statements. Reconciling now, rather than in a rush before filing, is how you catch a double-entered expense, a missed deposit, or a transaction that landed in the wrong category while there’s still time to fix it cleanly.

Know Who Needs a 1099 — and the New $2,000 Threshold

If your business paid an independent contractor, freelancer, or unincorporated vendor for services during the year, you may need to send them a 1099-NEC. This is where the rules just changed: for payments made in 2026, the reporting threshold rises to $2,000 for the year, up from the $600 threshold that applied for many years before. If you paid someone less than $2,000 total in 2026, you generally don’t need to issue them a 1099-NEC for it.

A few categories, like gross proceeds paid to attorneys, still follow different rules — if you’re not sure whether a payment qualifies, ask us before you guess.

What to do now:

• Pull a list of every vendor and contractor paid $2,000 or more in 2026.
• Confirm you have a completed Form W-9 for each one, with their correct name and taxpayer ID.
• Flag anyone missing a W-9 — it’s much easier to get one in November than in late January.

Mark the 1099-NEC Deadline: February 1, 2027

Form 1099-NEC is normally due to both recipients and the IRS by January 31. In 2027, January 31 falls on a Sunday, which pushes the deadline to the next business day — February 1, 2027. This deadline applies whether you file on paper or electronically, and it doesn’t come with the automatic extension some other tax forms get, so it’s worth putting on the calendar now rather than finding out in January.

Make Your Last Estimated Tax Payment by January 15, 2027

If you pay quarterly estimated taxes — common for sole proprietors, partners, and S-corp shareholders who don’t have enough withheld elsewhere — your fourth and final payment for the 2026 tax year is due January 15, 2027. Paying on time avoids an underpayment penalty that’s easy to forget about until it shows up on your return.

If You Run an S-Corp: Revisit Reasonable Compensation

If your business is taxed as an S corporation and you work in it, the IRS expects any officer-shareholder to be paid reasonable compensation as wages before the business pays out additional distributions. Year-end, while you still have time to run a final payroll adjustment, is the right moment to check that your salary for the year reflects what someone in your role, with your experience, would reasonably be paid — not just whatever was left over.

Retirement Plan Deadlines Worth a Look

Several small-business retirement plans, including a SEP-IRA or a solo 401(k), can often be funded up until your tax filing deadline (including extensions) for the prior year. But a few plan features — like setting up a brand-new solo 401(k) in the first place, or making certain employee elective-deferral elections — have their own, earlier deadlines depending on the plan. If you’re considering starting or funding one for 2026, don’t wait until tax season to ask; check the specific plan’s rules now.

Texas Franchise Tax: Due May 15, 2027 (Even If You Owe Nothing)

Texas has no personal income tax, but most LLCs, corporations, and partnerships registered in Texas still owe an annual franchise tax report, due May 15 each year. For the 2027 report (covering your 2026 business activity for most entities), the no-tax-due revenue threshold is $2,650,000 in annualized total revenue — fall at or under that, and you likely owe no franchise tax itself. But even then, the accompanying Public Information Report or Ownership Information Report is still due. Skipping it, even with zero tax owed, can put your right to operate in Texas at risk. Confirm your entity’s specific filing requirement on the Texas Comptroller’s website or with us.

Records to Keep

Before you file anything away for the year, make sure you can put your hands on:

• Bank and credit card statements for every business account.
• Receipts or records for any deduction you plan to claim.
• Mileage logs, if you deduct vehicle expenses.
• Completed W-9s for every 1099 vendor.
• Payroll records and any retirement plan contribution confirmations.

Good records now save hours later — and they’re your best defense if a return is ever questioned.

Get Ahead of Filing Season

None of this has to happen in one sitting. Tackling it in October and November, instead of all at once in January, is what actually keeps a small business’s year-end calm instead of chaotic. If you’d rather hand the checklist to someone else, our bookkeeping and tax preparation services exist for exactly this — or book a free consultation and we’ll walk through where your business stands today.