Small Business Tax Tips for Austin & Round Rock Entrepreneurs

Hey. I’m Nir, and I help small businesses in Austin, Round Rock, and nearby areas get their taxes in order. Over the years, I’ve seen a lot of folks put off tax planning until April, and then stress over surprises. This article shares small business tax tips you can use now, so tax time doesn’t feel like a crisis.

I’ll walk you through how Texas works, what you should know, and what many business owners miss. Think of this as the advice I give clients when we first sit down to plan their year.

Texas Tax Basics (Yes, it’s different here)

You’ll hear “Texas is tax-friendly” a lot. It’s not marketing fluff. There are real perks, but also things to watch out for.

No state income tax for individuals

One of the best parts of being in Texas is: there’s no state income tax on individuals. That means your personal income from your business (if it's pass-through) doesn’t get taxed at the state level.

The Texas Constitution was amended in 2019 to ban state income tax on individuals.

That gives you some breathing room compared to states with steep state tax rates.

But there is a “franchise tax” (a kind of business tax)

Even though Texas doesn’t tax personal income, many business entities must deal with the franchise tax (also called the margin tax). It’s different from an income tax; it's more like a fee for doing business in the state.

Here are the key facts:

• Most LLC’s in Texas will only need to file the public information or ownership reports (to keep your entity in good standing).

• For revenue above the threshold, you may use different calculation methods (whichever gives you the lowest tax). One simpler method is called “E-Z computation,” letting you pay a lower rate, though it may limit deductions.

• Typical tax rates: 0.75% for most, 0.375% for wholesale/retail. The E-Z option rate is 0.331%.

Also, sole proprietors and some partnerships (if directly held by individuals) are often exempt from franchise tax.

Other taxes to know in Texas

• Sales & Use Tax: If you sell goods or certain services, you usually must collect sales tax. The base state rate is 6.25%, and local jurisdictions can add up to 2%, making a possible 8.25% total.

• Property Taxes: These are local (county, city, school district). If your business owns buildings, equipment, inventory, or furniture, it can face property tax bills.

Top Small Business Tax Tips

When I meet new clients in Austin or Round Rock, the first thing I usually hear is, “I just want to pay what I owe and nothing more.” That’s the right mindset. Smart tax planning isn’t about cutting corners; it’s about being organized, knowing your options, and keeping your numbers straight all year.

Here are the small business tax tips I share most often. They are simple things that can make a big difference.

1. Stay on top of your books all year

Waiting until March or April to organize receipts is like trying to do a year’s worth of laundry in one night. Keep your books current, month by month.

I’ve seen Austin business owners save thousands just by spotting missed deductions early.

If bookkeeping feels like too much, consider professional help. I offer professional bookkeeping services that keep your records clean and tax-ready.

2. Separate business and personal spending

This one’s simple, but it’s where most small business owners get in trouble.

Open a dedicated business bank account and credit card. Pay yourself through that, not your personal card.

It keeps your deductions clear and protects you if you’re ever audited.

3. Track every deductible expense

You can’t claim what you can’t prove.

Common deductions include:

• Office rent or home office use

• Supplies, software, and tools

• Advertising and marketing (including your website)

• Mileage or actual vehicle expenses

• Business insurance

• Professional fees like accounting or legal services

Under IRS Section 179, you can often deduct the full cost of qualifying equipment in the year you buy it instead of spreading it over time. This is especially helpful if you’ve upgraded computers, vehicles, or tools. (Source: IRS.gov, Section 179 Deduction)

4. Pay estimated taxes quarterly

If your business doesn’t have tax withholding, you’re supposed to pay estimated quarterly taxes to avoid penalties.

You can estimate based on last year’s tax bill or your current year’s income.

Each situation is different. If you’re unsure, schedule a consult. I help small business owners decide whether a tax planning session can save them money long-term.

5. Save for retirement, and save on taxes

Retirement contributions lower your taxable income.

Even if you’re the only person in your business, you can open a Solo 401(k) or SEP IRA. For example, a small landscaping owner in Round Rock contributing $15,000 to a Solo 401(k) could reduce their tax bill by several thousand dollars. (Source: IRS.gov, Retirement Plans for Self-Employed)

6. Understand what changed with 1099-K forms

If you use PayPal, Venmo, or Square, you might’ve noticed talk about Form 1099-K.

As of 2025, the IRS has postponed the lower $600 reporting threshold. Right now, third-party payment platforms must issue a 1099-K only if you have over 200 transactions and more than $20,000 in payments. (Source: IRS Newsroom, 2024 1099-K Guidance)

Even if you don’t get the form, you still must report that income. Keep accurate records from every platform.

7. Use clean digital records

Paper fades, and boxes of receipts get lost.

Use accounting software like QuickBooks Online or Wave to store receipts digitally.

I’ve seen a local coffee shop in Austin cut its accountant time in half just by automating its expense tracking.

The IRS accepts electronic records, as long as they’re legible and retrievable. (IRS Publication 583)

8. Watch for state filing deadlines

Texas businesses file the public information report (if below the threshold) by May 15 each year. (Texas Comptroller)

Even if you owe nothing, you still have to file.

Mark that date in your calendar, or let your CPA handle it. Late filing fees start small but can grow fast.

9. Plan early for next year

Good tax outcomes start months before filing season.

If you know your year’s profit looks higher than usual, talk to a CPA before December. You might prepay certain expenses, buy needed equipment, or adjust estimated tax payments.

Tax law changes often, and being proactive is the simplest way to stay compliant and save money.

That covers the most common small business tax tips I share with clients around Austin. The key isn’t to do everything at once—it’s to build habits that make taxes predictable instead of stressful.

Bookkeeping & Tax Prep: Making Tax Time Easier

When tax season rolls around, most small business owners fall into one of two groups.

There are the folks who stay organized all year, and then there are the ones who show up with a shoebox full of receipts. If you’re in the second group, don’t worry. I’ve seen it all, and it’s fixable.

But the truth is this: the cleaner your books are, the smoother your tax prep will be - and usually, the less tax you’ll end up paying. Good bookkeeping isn’t just about compliance; it’s about seeing your business clearly.

Why monthly bookkeeping matters

If you wait until spring to sort out your books, you’re flying blind for most of the year. I tell my clients to treat bookkeeping like brushing your teeth—something you do a little at a time, not once a year.

Here’s what I recommend doing every month:

• Reconcile your bank and credit card accounts.

• Categorize your income and expenses correctly.

• Record any large purchases or equipment upgrades.

• Save copies of receipts and invoices (digital or scanned).

• Review your cash flow statement.

When you’re consistent, you can spot trends, like if your advertising costs are creeping up, or your profit margins are slipping. These small details can make a big difference come tax season.

If you don’t have time to manage this yourself, that’s where I come in. I handle bookkeeping for Austin businesses of all sizes, and I build it around your schedule and tools.

Keep records digital and backed up

Paper fades, coffee spills, and receipts get lost.

I always suggest scanning or snapping photos of your receipts. Store them in the cloud or link them directly to your accounting software.

IRS guidelines confirm that electronic records are acceptable as long as they’re complete and readable. (IRS Publication 583)

For clients using QuickBooks or Xero, we set up automation so new transactions get categorized automatically. You can go from spending six hours a week sorting receipts to under an hour by going digital.

Prepare early, not urgently

When it comes to tax preparation, I tell clients: don’t wait for the IRS deadline to get started.

If you keep your books current, you can run a year-end projection in December. That one step can tell you what you’ll owe and give you time to make smart decisions, like contributing to a retirement plan or buying that new work vehicle before the year closes.

Tax prep is smoother when these are ready:

• Profit & Loss Statement

• Balance sheet

• Payroll records

• Prior year tax returns

• Receipts for deductible expenses

• Copies of 1099s, 1099-Ks, and W-2s

If you’re not sure where to start, you can book a consultation online, and we’ll review your current setup and what needs tightening before tax season hits.

Handle red flags before they grow

Sometimes, business owners get letters from the IRS or the Texas Comptroller and panic. The worst thing you can do is ignore it.

If you act quickly, most issues can be resolved without penalties.

That’s exactly what our audit resolution service is for. I’ve helped clients fix reporting mistakes and late filings before they turned into expensive problems.

The IRS isn’t out to get you; they just want accurate information. If you can show good records and reasonable effort, most audits end smoothly.

How clean books save you money

Here’s something most people don’t realize: when your bookkeeping is messy, your tax prep fee goes up. It’s not a punishment; it’s because your CPA has to spend time sorting through unclear data before we can even start your return.

When your records are organized, your return gets done faster, cheaper, and more accurately.

I’ve seen business owners in Austin save hundreds, sometimes thousands, just by staying consistent with monthly bookkeeping.

It’s one of those habits that pays for itself.

Local Insights for Austin & Round Rock Small Businesses

Running a business in Central Texas isn’t like running one anywhere else.

Between Austin’s rapid growth, changing property values, and the mix of tech startups and small local shops, every area has its quirks. I’ve worked with everyone from coffee shop owners in Round Rock to creative freelancers downtown, and while the details differ, the challenges usually come down to three things: staying organized, understanding local costs, and planning ahead.

Austin’s growth brings both opportunity and pressure

Austin is booming, and that’s good news for business. But growth also brings higher costs and more paperwork.

For example, if you rent office space or own property in Travis or Williamson County, you’ve probably noticed property tax appraisals rising over the past few years. (Texas Comptroller, Property Tax Overview)

I tell clients: don’t just plan for federal taxes, budget for local ones too. Things like property tax, city permits, or franchise filing fees can sneak up on small businesses if you’re not watching.

Even small adjustments, like appealing an inflated property value or correctly categorizing equipment, can make a difference at year-end.

Local rules can affect your filings

A lot of new business owners in Austin assume the lack of a state income tax means fewer filings. Not quite.

Depending on your industry, you may still need sales tax permits or other licenses through the Texas Comptroller of Public Accounts. (Texas Comptroller — Sales Tax Permits)

Service-based businesses, like consultants, marketing agencies, or designers, are often exempt from collecting sales tax, but retail and some repair services are not. (Source: Texas Comptroller — Taxable Services)

I’ve had to help more than one small shop fix back sales tax filings because they didn’t realize labor charges were taxable for certain repairs.

If you’re unsure, it’s worth checking before you open your doors. It’s much easier to get it right at the start than to fix it later.

Why local CPAs make a difference

It’s easy to file taxes online these days, but working with someone local, who actually knows the area, can be a game-changer.

Let’s say, for example, a Cedar Park HVAC company was missing a local business personal property tax form every spring. And let’s say, they didn’t even realize it existed because they’d filed through a national online service that didn’t ask for it. We can fix this, avoid penalties, and make sure it never happens again.

The truth is, local knowledge saves money. Austin, Round Rock, and Pflugerville each have their own filing nuances, and county deadlines can vary. That’s the kind of stuff you don’t see on national tax prep software.

Balancing Austin creativity with structure

One of the things I love about working in Austin is how creative the people here are.

Many of my clients are designers, artists, or small business owners who left corporate life to build something meaningful. But with creative freedom comes the challenge of keeping your numbers straight.

Bookkeeping and planning might not feel inspiring, but they give you the freedom to create without worrying if you’ll owe a big surprise tax bill in April. I always say: good systems make space for creativity.

Community over competition

I’ve noticed that Austin’s small business scene is uniquely collaborative. Owners share tips, recommend accountants, and support local vendors. I encourage clients to connect with groups like the Austin Chamber of Commerce, Round Rock Chamber, and local business associations.

These networks don’t just help you grow. They often share grant opportunities or updates on local tax incentives. (Round Rock Chamber of Commerce)

The more connected you are, the more you can take advantage of resources built for businesses right here in Central Texas.

Sources for Section 1: Texas Tax Basics

1. Texas Constitution, Article 8 – Taxation and Revenue (no personal income tax provision) – Wikipedia: Constitution of Texas 

2. Texas Franchise (Margin) Tax Overview – Texapedia: Franchise Tax in Texas

3. “Taxes in Texas: Small Business Basics” – Investopedia 

4. “Do Texas Businesses Pay State Tax? Here’s What You Need to Know” – Silberman Law Firm, PLLC 

5. Texas Comptroller of Public Accounts – Franchise Tax Overview (2024–2025 thresholds and rates) – https://comptroller.texas.gov/taxes/franchise/ 

6. Texas Sales and Use Tax Rate – https://comptroller.texas.gov/taxes/sales/ 

7. Texas Local Property Tax Overview – https://comptroller.texas.gov/taxes/property-tax/ 

Sources for Section 2: Top Small Business Tax Tips

1. IRS Publication 946 — How to Depreciate Property (Section 179 Deduction) https://www.irs.gov/publications/p946

2. IRS — Estimated Taxes for Small Business https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

3. IRS — Retirement Plans for Self-Employed Individuals https://www.irs.gov/retirement-plans/retirement-plans-for-self-employed-people

4. IRS — 2024 1099-K Guidance https://www.irs.gov/newsroom/irs-announces-new-2024-1099-k-thresholds

5. IRS Publication 583 — Starting a Business and Keeping Records https://www.irs.gov/publications/p583

6. Texas Comptroller — Franchise Tax Overview https://comptroller.texas.gov/taxes/franchise/

Sources for Section 3: Bookkeeping & Tax Prep: Making Tax Time Easier

1. IRS Publication 583 — Starting a Business and Keeping Records https://www.irs.gov/publications/p583 

2. IRS — Recordkeeping for Small Businesses https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping 

3. Texas Comptroller — Franchise Tax Overview https://comptroller.texas.gov/taxes/franchise/ 

4. IRS — Business Taxes for the Self-Employed https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center 

Sources for Section 4: Local Insights for Austin & Round Rock Small Businesses

1. Texas Comptroller — Property Tax Overview https://comptroller.texas.gov/taxes/property-tax/ 

2. Texas Comptroller — Sales Tax Permits https://comptroller.texas.gov/taxes/permit/ 

3. Texas Comptroller — Taxable Services List https://comptroller.texas.gov/taxes/sales/taxable-services.php 

4. Round Rock Chamber of Commerce — Small Business Resources

    https://roundrockchamber.org/