Mid-Year Tax Planning Checklist for Texas Business Owners

The halfway point of the year is one of the most useful moments in the calendar for Texas business owners. With two full quarters of income and expenses behind you, there is enough real data to make smart adjustments before year-end arrives. Mid-year tax planning is not about scrambling, it is about taking a clear-eyed look at where you stand and making proactive decisions while there is still time to act.

1. Review Your Year-to-Date Income and Expenses

Start with the basics. Pull your income statement for January through June and compare it to the same period last year. Ask yourself:

• Is revenue tracking higher or lower than expected?
• Are your expenses proportionate to your income?
• Have there been any large, one-time transactions that could affect your tax position?

If income is up significantly, that is a signal to revisit your estimated tax payments and deduction strategy before Q3. If income is down, there may be planning opportunities involving the timing of income and deductions depending on your projected results for the remainder of the year.

2. Confirm Your Q3 Estimated Tax Payment Is on Track

The Q3 estimated tax deadline is September 15. Now is the right time to recalculate based on actual year-to-date figures rather than relying on last year's numbers. Texas business owners do not pay state income tax, but federal obligations still apply.

If your income has shifted meaningfully since you made your Q1 and Q2 payments, your Q3 payment may need to be adjusted up or down accordingly. For more on how quarterly estimated payments work and who is required to make them, see Quarterly Estimated Taxes: What Texas Business Owners Need to Know.

3. Revisit Your Business Structure

Mid-year is a practical time to evaluate whether your current business entity is still working in your favor. A sole proprietorship, single-member LLC, S corporation, and partnership each carry different tax implications, and what made sense when you started may not be the most efficient structure as your revenue grows.

​If you have been considering a change, discussing it with a CPA now gives you enough runway to implement changes that take effect before year-end. Waiting until December leaves little room to act.

4. Check for Deductions You May Be Overlooking

Many business owners leave deductions on the table simply because they are not tracking them consistently. Common ones worth reviewing at mid-year include:

• Home office deduction — if you use a dedicated space exclusively for business
• Vehicle mileage — business-related driving tracked with a mileage log
• Section 179 expensing — for equipment or software purchased this year
• Retirement contributions — SEP-IRA and Solo 401(k) contributions can significantly reduce taxable income
• Health insurance premiums — self-employed individuals may be able to deduct these​

If you are not already tracking these consistently, starting now means you will have accurate records come tax time.

5. Plan the Timing of Major Purchases

If you are considering purchasing equipment, vehicles, software, or other business assets, the timing matters. Purchases made before December 31 of this tax year may be eligible for Section 179 expensing or bonus depreciation, which can reduce your taxable income for 2026. Having a conversation with your CPA before making a large purchase ensures you understand the tax implications and can time the transaction strategically.

6. Address Any IRS Correspondence Promptly

If you have received any notices from the IRS this year, mid-year is not the time to set them aside. Unresolved IRS issues tend to compound, and addressing them early typically results in better outcomes. A CPA experienced in IRS problem resolution can help you respond appropriately and protect your interests.

Start the Second Half of the Year With a Clear Tax Picture

A mid-year review does not have to be complicated, but it does need to happen. The decisions you make in June and July can meaningfully affect what you owe — or what you save — when you file your 2026 return.

Larry Bradford, CPA has over 40 years of experience helping business owners in Austin, Lakeway, Dripping Springs, Westlake, Spicewood, and Bee Cave manage their tax obligations with confidence. If you want a professional review of your current tax position, now is a good time to schedule an appointment.
Call (512) 402-0049 or visit the contact page to get started.