Introduction: Why Year-Round Tax Prep Matters
Be honest, do taxes only feel real when a stack of 1099s, W‑2s, and bank statements lands on your desk? That last-minute scramble is stressful and completely avoidable. The easiest way to make April feel calm is to treat tax season like a year‑round habit, not a one-month sprint. Think of it like lawn care in Texas: a little consistent attention beats a springtime overhaul every single year.
Why This Matters for Texas Businesses Right Now
Texas is friendly to business, boasting no personal state income tax and plenty of growth. Yet, rules still stack up: many LLCs owe Texas franchise tax, lots of industries collect sales and use tax with city and special district rates. The IRS is matching more data electronically, which means sloppy books trigger letters, and banks want financials before renewing credit lines. Keeping a steady accounting routine helps you avoid penalties, file clean returns, and maintain predictable cash flow.
The Short Answer
Preparing for tax season year‑round comes down to five habits:
- Keep clean books
- Separate business and personal money
- Set aside tax as you earn
- Capture deductions in real time
- Check in quarterly with someone
Do these five, and your return becomes a summary of choices you already documented, not a rescue mission in March.
Build the Foundation: Clean Books and Simple Routines
Choose cloud bookkeeping you will actually use: QuickBooks Online or Xero work well for most small businesses. Connect bank, credit card, and merchant accounts. Turn on receipt capture so proof lives with each transaction.
Reconcile weekly: Spend 20–30 minutes each Friday. Categorize transactions, match deposits to invoices, clear undeposited funds, and reconcile bank and card accounts to the penny.
Close monthly by the tenth business day: Produce a simple pack: profit and loss, balance sheet, AR and AP agings, sales tax liability, and a 13-week cash view. Share with your partner or manager. Lock the period.
Keep a year folder: One place for monthly statements, payroll reports, loan statements, sales and franchise tax filings, federal estimated tax confirmations, major contracts and invoices, W‑2s, and 1099s.
Separate Business and Personal: No Exceptions
Open a dedicated business checking account and credit card. Run all income and expenses through them. Pay yourself via draws or payroll. Avoid using business funds for personal purchases. Commingling creates a costly and time-consuming mess.
Set Aside Tax Money as You Earn
For self-employed or pass-through owners, taxes are not automatically withheld. Open a separate high-yield savings account labeled Taxes. Sweep a percentage of profit into it as money comes in (typically 25–30 percent). Pay quarterly estimates from this account in April, June, September, and January. Paying from set-aside money turns tax obligations into a routine, not a scramble.
Capture Deductions in Real Time
Travel and meals: Keep receipts, note who and why, keep agendas, and document primary business purpose.
Vehicle: Choose standard mileage or actual expenses. Pick one method per vehicle and stick with it. Use a mileage app to simplify.
Home office: Document square footage, keep utility bills, and use simplified or actual method consistently.
Software and subscriptions: Put accounting, payroll, project tools, e-commerce, and cloud storage on the business card to flow automatically into books.
Equipment: Save invoices. Decide with your CPA whether to expense under Section 179 or depreciate.
Professional fees and education: CPA consultations, tax prep, legal fees, courses, certifications, and business books are deductible when tied to current operations.
Mind Texas Specifics Without Stress
Sales and use tax: Register, collect the correct combined rate, remit on time. Map sales tax to a liability account. Keep resale and exemption certificates
Texas franchise tax: File annually, even if no tax is due. Include public information report or margin computation as required
County property renditions: Some counties require business personal property renditions. Add to your checklist if applicable
Payroll Done Right
Use a payroll service to set up withholding, fund payroll taxes, and file returns. Reasonable compensation for S corporation owners must be documented with notes or salary benchmarks. Payroll done right removes risk; payroll guessed at creates months of cleanup.
Quarterly Cadence That Keeps You Ahead
- Two weeks before each estimate, run year-to-date P&L. Adjust payments as needed.
- Reconcile sales tax liability quarterly.
- Meet your CPA for 15–30 minutes: update estimates, check law changes, review retirement contributions, and plan equipment purchases.
Use a 13-Week Cash Flow to See Around Corners
Forecast weekly for the next 13 weeks (expected receipts, disbursements, and estimates). Update every Friday after reconciliation. Tight weeks? Accelerate invoicing, shift payments, or draw on a pre-set line of credit.
Choose In-House, Outsourced, or Blended Support
Outsourced bookkeeping: Good for reconciliations, monthly close, sales tax, and reporting.
In-house: Needed for high volume, inventory coordination, and real-time decisions.
Blended: Admin or coordinator handles approvals, deposits, and document flow; outside bookkeeper owns reconciliation and reporting; CPA supports quarterly and annual review.
Avoid Common Pitfalls
- Waiting until March
- Commingling funds
- Ignoring sales tax
- DIY payroll errors
- Losing receipts
A Practical Texas Checklist
Monthly
- Reconcile bank and card accounts
- Attach receipts and label business purpose
- File sales tax if monthly
- Close by tenth business day and lock the period
Quarterly
- Pay federal estimates
- File sales tax if quarterly
- CPA check-in and projection updates
- Reconcile sales tax to filings
Annually
- Issue W‑2s and 1099s in January
- File franchise tax and public information report
- Prepare federal returns
- Review entity status and reasonable compensation for S corporations
Three Real-World Texas Examples
- Houston food truck: Separate fees and rent, snap fuel receipts, Friday 30-minute reconciliation. Result: clean sales tax trail, more deductions, no April scramble.
- Austin creative studio: Added 13-week cash view, annual billing for software. Result: smoother cash flow, faster month-end closes.
- Dallas trades contractor: Progress billing, supplier terms aligned with client payments, documented vehicle mileage. Result: stronger cash flow, defensible deductions.
Make It Stick With Tiny Rituals
- Friday 30: Reconcile, send invoices, schedule next week, update 13-week forecast, drop statements into year folder.
- Tenth day close: Deliver monthly pack and lock month.
- Quarter day: Meet CPA, pay estimates, reconcile sales tax, check franchise tax status.
- Year rollover: In January, issue W‑2s and 1099s, archive prior year, start fresh folders.
A Calm Finish
Year-round tax prep is about rhythm, not memorizing codes. Clean books, separate accounts, tax money set aside, receipts captured, monthly closes, and quarterly check-ins make April a summary, not a storm. You will lower taxes legally, protect cash flow, and buy back time for the work you started this business to do.
