Year-End Bookkeeping Checklist for Texas Small Businesses (2026)

Year-end bookkeeping isn’t a single task — it’s a sequence of about 30 tasks spread across two months, with hard deadlines stacked on top of each other in January and again in May. Get them right and tax season is mostly handled before it starts. Get them wrong and the cleanup work plus penalty risk piles up fast.

This checklist covers what a Texas small business needs to do to close 2026 cleanly and roll into 2027 with everything in order. It’s organized by deadline — December, January, February, March, April, May — so you can use it like a calendar. Whether you handle your books yourself, work with a bookkeeper, or are still trying to figure out which, the items below need to happen one way or another.

We’re a tax and bookkeeping firm based in Allen, TX. This checklist is built from what we run with our clients every year-end.

December: while there’s still time to act

Most of the items below stop being available the moment the calendar flips. December is the last month where you can make decisions that affect your 2026 tax position.

Tax planning items (act before December 31)

•  Review your year-to-date P&L and estimate full-year income. If you’re tracking toward a higher tax bracket than expected, December is when you can act on it.
•  Make qualifying equipment purchases for Section 179 or bonus depreciation. Equipment must be placed in service before year-end — not just ordered. Talk to your CPA about whether this fits your situation; rules and limits change year to year.
•  Fund retirement contributions where deadlines fall before year-end. Solo 401(k) employee contributions need to happen before December 31. SEP-IRA and SIMPLE IRA have different deadlines — confirm with your tax professional.
•  Pay deductible expenses now if it makes sense. Pre-paying January expenses in December accelerates the deduction into the current year — useful if you’re cash-basis and want to reduce 2026 taxable income.
•  Verify your owner compensation strategy. S-corp owners should confirm reasonable salary has been paid through payroll. Last-minute adjustments are possible in December but get harder afterward.

Operational year-end items

•  Send W-9 requests to any contractor you’ve paid in 2026 and don’t have one for. You need this information before January’s 1099 deadline. Chasing W-9s in mid-January is one of the most preventable year-end fire drills.
•  Reconcile November and earlier months if any are still open. The longer reconciliation waits, the harder it gets.
•  Take a physical inventory count on December 31 if your business has inventory. The ending inventory number feeds directly into your cost of goods sold and your tax return.
•  Review and write off uncollectible AR if appropriate. Old outstanding invoices that aren’t collectible should be addressed before year-end.

Year-end tax planning rules change frequently — Section 179 limits, bonus depreciation percentages, retirement contribution limits, and other figures are updated each tax year. Confirm current 2026 rules with your tax professional or the IRS before acting.

Behind on year-end prep and not sure how to catch up before January deadlines? Book a free 30-minute discovery call — we’ll look at where you are and tell you what’s still possible.

Book a discovery call: Free Consultation

Or call us: 469-888-8492

January: closing the books and meeting deadlines

January is the heaviest month on this checklist. Multiple hard deadlines stack up, and the books need to be fully closed before tax preparation can start.

Close out December and the full year

•  Reconcile December for every account (bank, credit card, merchant, loan). Investigate and resolve any differences.
•  Match all open AR and AP to underlying transactions. Anything that can’t be matched needs investigation, not avoidance.
•  Record any final accrual adjustments if you’re on accrual books — revenue earned but unbilled, expenses incurred but unpaid, prepaid expenses to recognize.
•  Record year-end depreciation for all fixed assets. If you’ve been recording it monthly, this is a verification step. If you haven’t, this is the catch-up.
•  Confirm owner draws, distributions, and contributions are coded correctly in equity, not in expenses or income.
•  Generate a full-year P&L and balance sheet and read them. The numbers should match your understanding of how the year went. If they don’t, that’s a flag.
•  Lock the year in QuickBooks (Settings > Accounting > Close the books) so prior-period transactions can’t be added without an explicit override.

January 31 deadlines (federal)

•  Issue 1099-NEC forms to every independent contractor you paid $600 or more during 2026 for services. Also file Copy A with the IRS by January 31.
•  Issue W-2 forms to all employees. Also file with the Social Security Administration by January 31.
•  File quarterly Form 941 for Q4 2026 federal payroll tax.
•  File Form 940 for federal unemployment tax (FUTA) for 2026.

January 31 deadlines (Texas)

•  File Q4 2026 Texas sales tax return (or December 2026 monthly return) by January 20–25 depending on filing frequency. Confirm your exact deadline based on assigned filing frequency.
•  File any TWC (Texas Workforce Commission) Q4 unemployment tax report if you have employees.

Filing deadlines occasionally shift based on weekends and federal holidays. Confirm exact 2027 deadlines for 2026 filings with the IRS, Texas Comptroller, and TWC before relying on the dates above.

February: business personal property rendering

February is the month when one of Texas’s most-missed filings comes due.

•  File business personal property rendering with your county appraisal district. This is the annual report of business-owned equipment, furniture, vehicles, inventory, and other taxable personal property used in business. The deadline is typically April 15, but extensions and specific dates vary by county — Collin County, Dallas County, and Denton County all have their own forms and processes.
•  Pull your fixed asset register from QuickBooks (or wherever you track depreciable assets) — this is the source document for the rendering. Clean books make this step painless.
•  Reconcile January so the regular monthly cadence resumes immediately.
•  Send year-end financials to your CPA or tax preparer if you haven’t already. Earlier is better — March filings rush is real.

Business personal property rendering deadlines vary by county. Collin County Appraisal District’s standard deadline is April 15, but some counties have earlier dates and extensions are sometimes available. Confirm with your county appraisal district directly.

March: federal tax filings begin

March is when most federal business tax returns come due — partnerships and S-corps file in March, sole props and C-corps file in April.

•  File Form 1065 (Partnership return) by March 15 if you operate as a multi-member LLC or partnership. Issue K-1s to partners by the same date.
•  File Form 1120-S (S-corp return) by March 15. Issue K-1s to shareholders.
•  File extensions if needed before the March 15 deadline. An extension gives you more time to file, not more time to pay — any taxes owed are still due in March.
•  Reconcile February and keep the monthly cadence going.

April: the rest of federal taxes and Texas BPP

April is the biggest tax-filing month for sole props, single-member LLCs (default), and C-corps.

•  File Form 1040 with Schedule C by April 15 if you’re a sole proprietor or single-member LLC taxed as default.
•  File Form 1120 (C-corp return) by April 15 if you operate as a C-corp.
•  Pay Q1 2027 estimated taxes by April 15 if you make quarterly estimated tax payments.
•  File business personal property rendering with your county appraisal district if you haven’t already (standard Collin County deadline is April 15).
•  File Q1 2027 Form 941 for federal payroll tax — though this technically falls at April 30.
•  Reconcile March and continue the regular monthly cadence.

May: Texas franchise tax

May 15 is Texas franchise tax day — the most-missed Texas-specific filing for small businesses.

•  File Texas franchise tax return by May 15. Every Texas entity (LLC, corporation, LP) must file something — either a tax-due return, a no-tax-due report, or an EZ computation, depending on revenue level. Confirm current thresholds with the Texas Comptroller.
•  File Public Information Report (PIR) or Ownership Information Report (OIR) alongside the franchise tax return. These are part of the same filing for most entities.
•  Pay any franchise tax due by May 15. Extensions to file are available; extensions to pay are not.
•  Reconcile April and you’re back to normal monthly cadence with all year-end items completed.

Texas franchise tax thresholds, rates, and forms change periodically. Verify current 2026/2027 thresholds with the Texas Comptroller of Public Accounts before filing — what counted as no-tax-due last year may not apply this year.

Items to track all year that pay off at year-end

The owners who breeze through year-end aren’t doing more in December — they’re doing small things all year that make December easier. The big ones:

• Capture W-9s from contractors when you first pay them, not in January when you’re scrambling for 1099s. A vendor without a W-9 on file can refuse to provide one later.
• Reconcile every month, not just at year-end. Twelve small reconciliations are dramatically easier than one giant one.
• Keep a fixed asset register current. Every time you buy depreciable equipment, add it to the register. This becomes both your depreciation schedule and your business personal property rendering source document.
• Separate personal and business spending strictly. Personal Amazon orders on the business card cost you money at year-end in cleanup time, and risk audit exposure if commingling is severe.
• Track quarterly estimated taxes. Missing quarterlies leads to underpayment penalties at year-end that are entirely avoidable.
• Check in with your CPA in October or November, not January. Tax planning in November can change the year. Tax planning in January can only describe what happened.

Texas small business year-end deadline summary

Quick-reference table for the deadlines that matter most. Confirm current-year dates with the relevant agencies — these can shift by a few days based on weekends and holidays.

Already behind? What to do now

If you’re reading this and December is already over — or you’re somewhere mid-year still trying to close the prior year — the work doesn’t get easier by waiting. The realistic options:

If you’re 1–6 months behind

Manageable. Plan to catch up over 2–4 weeks of focused work or hire a bookkeeper for a fixed-fee catch-up project. Most year-end deadlines can still be met if you start now. Extensions are available if you need them, but extensions to file are not extensions to pay — estimate and pay any taxes due even if filing is delayed.

If you’re 6–18 months behind

This is where penalties and interest start accumulating, especially on quarterly federal payroll taxes and Texas sales tax. The catch-up takes longer (typically 4–8 weeks of bookkeeper work) and may involve filing amended returns or late filings. A bookkeeper or CPA can usually negotiate penalty abatement for first-time offenders, but it gets harder the more periods are missed.

If you’re 2+ years behind

Serious situation. Multiple unfiled returns, potential audit exposure, and meaningful penalty risk. This isn’t DIY territory anymore — the right move is to engage a CPA and bookkeeper together to plan the catch-up sequence (which filings first, what to extend, what to negotiate). Most owners we see in this situation are surprised how recoverable it is, but the longer you wait, the worse it gets.

Need help closing out the year?

If you’re behind on year-end work — or you just want a second set of eyes on what you’ve already done — the discovery call is the right starting point. We’ll look at where you actually stand, tell you what still needs to happen, and quote a fixed price for catch-up or year-end close work.

Year-end work has hard deadlines, but most situations are recoverable if action starts now. The longer the wait, the harder the cleanup.

Book a discovery call: Free Consultation

Or call us: 469-888-8492

Frequently asked questions

When does a Texas small business actually need to start year-end bookkeeping?

Realistically, October or November of the current year. December is too late for most tax planning actions, and January is too late to do meaningful catch-up before federal deadlines hit. Start the year-end conversation with your bookkeeper or CPA in the fall.

What’s the worst year-end deadline to miss?

It depends on the consequence type. Missing the January 31 1099 deadline triggers per-form penalties that scale with how late you file. Missing Texas franchise tax by May 15 can trigger forfeiture of your entity’s good standing if not cured. Missing federal estimated taxes triggers underpayment penalties. Each has its own pain, but none are unrecoverable if addressed quickly.

Do I need to file Texas franchise tax if I owe nothing?

Yes. Every Texas entity must file something each year — either a tax-due return, a no-tax-due report, or an EZ computation, depending on revenue level. “No tax owed” doesn’t mean “no filing required.” Skipping the filing is what triggers forfeiture proceedings, not unpaid tax.

Can I file an extension for my Texas franchise tax?

Yes, an extension request can be filed if needed. But like federal extensions, a Texas franchise tax extension extends the time to file the return, not the time to pay any tax due. Estimate any payment and submit it by May 15 even if you’re filing later.

What if I don’t have W-9s from my contractors?

Request them immediately. Without a W-9, you can’t accurately issue a 1099, and the IRS has rules about backup withholding for vendors who don’t provide W-9 information. Most contractors will provide a W-9 when asked; for those who won’t, document your requests and consult your tax professional.

How long should I keep year-end records?

The standard guidance is at least 7 years for business tax records — federal statute of limitations issues, audit support, and basis tracking for assets all benefit from longer retention. Some specific records (entity formation documents, asset purchase records, real estate documents) should be kept indefinitely.

Bottom line

Year-end bookkeeping is about 30 tasks across 6 months. None individually are complicated, but stacked together they catch a lot of small business owners unprepared. The owners who breeze through year-end aren’t doing more in December — they’re doing the right small things all year, then executing on the deadlines as they come.

Use this checklist as a calendar. Mark the deadlines now, work backwards from each, and the year closes cleanly. If you’ve already fallen behind, the path forward is still available — it just takes more focused work the longer you wait.

About the author: Tax by Lonestar is a tax and bookkeeping firm based in Allen, TX, serving small businesses across Collin County and the wider DFW metro. This article is general information, not legal or tax advice for your specific situation.