Smart Tax Planning Tips for Central Texas Business Owners

Running a business in Central Texas means keeping up with day-to-day operations while also preparing for tax season. With the right strategies in place, you can reduce your tax burden and keep more money in your pocket. Below are practical tax planning tips and deductions that many small business owners overlook.

1. Deduct Ordinary and Necessary Business Expenses

One of the most common ways to lower your taxable income is by tracking everyday business expenses. The IRS allows deductions for costs that are ordinary (common in your industry) and necessary (helpful to running your business).

Examples include:

1. Office rent or home office expenses

2. Utilities and internet

3. Business insurance premiums

4. Marketing and advertising costs

5. Professional fees (CPA, legal, consulting)

2. Don’t Miss Vehicle and Mileage Deductions

If you use your car for business, part of those costs can be written off. You can deduct actual expenses (like gas, repairs, and insurance) or use the standard mileage rate.

Tip: Keep a mileage log to prove business-related trips. Apps can make this simple and keep you IRS-compliant.

3. Take Advantage of Retirement Contributions

Retirement accounts aren’t just for long-term planning—they also provide immediate tax savings.

Options include:

1. SEP IRA – great for self-employed and small business owners

2. Solo 401(k) – flexible for higher contributions if you have no employees

3. Traditional IRA – additional savings if you qualify

Contributions reduce your taxable income today while helping you save for tomorrow.

4. Plan for Quarterly Taxes

Small business owners are usually required to make estimated tax payments every quarter. Missing these deadlines can result in penalties.

Working with a CPA ensures:

1. You calculate the correct amount owed

2. You avoid underpayment penalties

3. You can adjust payments as income changes

5. Consider Section 179 and Bonus Depreciation

Buying new equipment, vehicles, or software? Section 179 allows you to deduct the full purchase price of qualifying assets in the year you buy them (instead of spreading it over several years).

This can be a powerful tool for businesses looking to invest in growth while reducing taxes.

6. Keep Good Records Year-Round

Tax planning isn’t just for April—it’s a year-round effort. Keeping your books in order makes it easier to spot deductions and prevents last-minute stress.

Tips for better record keeping:

1. Use accounting software or outsource bookkeeping

2. Keep receipts and invoices organized (digital is fine)

3. Reconcile accounts monthly

Final Thoughts

Tax planning is about being proactive, not reactive. By taking advantage of deductions, planning ahead for quarterly payments, and working with a trusted CPA, you can simplify your tax strategy and maximize your savings.

👉 Need help with tax planning or business accounting? Schedule a consultation with Farahani CPA today.

FAQ

Q1: Can I deduct my home office if I’m self-employed in Texas?

A: Yes, if you use a portion of your home regularly and exclusively for business. You can deduct either a simplified flat rate per square foot or actual expenses like utilities, rent, and insurance.

Q2: What small business expenses are tax deductible in Central Texas?

A: Common deductions include office supplies, software, professional services, business meals, travel, and vehicle use. If it’s an ordinary and necessary expense for running your business, it may qualify.

Q3: How do quarterly estimated taxes work for small business owners?

A: The IRS requires estimated payments in April, June, September, and January. A CPA can help calculate amounts to avoid underpayment penalties and cash flow surprises.

Q4: Is CPA tax planning worth it for small businesses?

A: Yes—strategic planning often saves far more than the CPA’s fee. You’ll uncover deductions, avoid costly mistakes, and reduce your long-term tax burden.

Q5: Can I write off my car if I use it for both business and personal purposes?

A: You can deduct the portion of expenses that directly relate to business use. Keeping a mileage log helps you calculate the exact percentage to deduct.