For many small business owners in San Marcos, New Braunfels, and across Hays County, the word "taxes" often feels like a storm cloud on the horizon. You are experts at what you do: whether you are running a local boutique, a construction firm, or a growing tech startup: but navigating the complexities of the Texas Franchise Tax can feel like trying to read a map in a different language.

At ProTaxMasters, we believe you shouldn't have to be a tax attorney to keep your business in good standing. That is why as tax practitioners, we act as your Strategic Shield, providing a protective buffer between your hard-earned business and the confusing world of state tax notices.

If you're an individual or business and filed for an extension earlier this year (and you're not operating as a partnership or an S-Corp), that big federal deadline of October 15 to file your return is approaching faster than you might think. For Texas businesses, there is an important second date to remember: the Texas Franchise Tax extension deadline is November 15. With the major changes introduced by the One Big Beautiful Bill Act (OBBBA), the 2025 tax year is different from any we have seen before. Here is what every "little guy" in the San Marcos business community needs to know to stay protected and compliant.

The $2,650,000 Safety Net: Do You Even Owe?

The first piece of good news for many small businesses is the "no-tax-due" threshold on Texas franchise tax. For the 2026 report year, the threshold has been raised to $2,650,000 in annualized total revenue. Texas Franchise tax applies to entities that are formed, organized, or doing business in Texas. For example corporations, LLC's, and partnerships (and has nothing to do with sales tax). 

What does this mean for you? If your business brought in less than $2.65 million this year, you generally will not owe any Texas Franchise Tax. However: and this is a big "however": not owing money is not the same as not having to file.

Even if you fall under this limit, you still have a responsibility to file a Public Information Report (PIR) or an Ownership Information Report (OIR). Missing these "zero-tax" filings can lead to your business losing its "Good Standing" status with the state, which can cause massive headaches when you try to renew a lease or apply for a business loan.

100% Bonus Depreciation: A Gift from the One Big Beautiful Bill Act

One of the most significant changes for 2026 comes from the One Big Beautiful Bill Act (OBBBA). In the past, Texas didn't always follow the same rules as the federal government when it came to writing off big purchases like machinery, equipment, or vehicles.

For the 2026 tax year, the One Big Beautiful Bill Act ensures that 100% bonus depreciation is now available at the state level in Texas. This means that if you bought qualifying equipment for your business after January 19, 2025, you can likely deduct the entire cost in a single year on your Texas Franchise Tax report. This is a massive win for local businesses looking to reinvest in their growth while keeping their tax bill as low as possible.

Understanding Your "Margin": Four Ways to Save

The Texas Franchise Tax is calculated based on your business "margin." Think of this as the slice of your revenue that the state actually looks at. The state gives you four different ways to calculate this, and as your partner in Proactive Tax Planning, our job is to find the one that saves you the most money:

1. Cost of Goods Sold (COGS): This is ideal for businesses with high inventory costs or heavy equipment, as it now includes that 100% bonus depreciation we mentioned.
2. Compensation: This is often the best choice for service-based businesses in San Marcos where payroll is the biggest expense.
3. 70% of Total Revenue: A simple, flat calculation for those who don't fit into the other categories.
4. The $1 Million Deduction: A standard deduction that simplifies things for many mid-sized businesses.

For the smallest businesses, there is also an EZ Computation option, which simplifies the math even further.

Fall Deadline Confusion: October 15 vs. November 15

It is easy to mix these dates up, especially when you are juggling both federal and Texas business filings.

1. October 15: This is the big federal extension deadline for individuals and C-Corps.
2. November 15: This is the Texas Franchise Tax extension deadline for businesses that filed for that Texas extension.

It is also a common myth that filing an extension gives you more time to pay your taxes. In reality, an extension only gives you more time to file the paperwork. If you expect to owe tax, that money was technically due back when the original payment deadline passed.

If you are just now realizing that your business has grown and you might owe more than you thought, don't panic. Our Tax Resolution services, including Audit Defense and Penalty Relief, are designed to handle these exact situations. We step in so you can focus on running your business.

New R&D Credits and Form 6765

Are you a San Marcos tech startup or a local manufacturer trying out new processes? The 2026 rules have redesigned how Research & Development (R&D) credits work. These credits are now tied directly to your federal Form 6765, but only for activities happening right here in Texas.

By aligning these rules, the state has made it much simpler for us to claim these credits for you. If you are innovating, you deserve to be rewarded for it.

Why Local Expertise Matters

When you search for tax preparation San Marcos TX, you aren't just looking for someone to enter numbers into a computer. You are looking for a partner who understands the local landscape.

Michael Garcia, the owner of ProTaxMasters, has been serving the community since 2018. As an AFSP participant, an EA candidate, and a Texas Notary Public, Michael brings a level of due diligence and care that you won't find at a big-box retail tax shop. We specialize in Small Business Advisory Services, offering monthly planning and S-Corp optimization to ensure you aren't just reacting to tax season, but staying ahead of it.

Whether you are a freelancer in New Braunfels or a growing corporation in Hays County, we provide the Tax Strategy & Wealth Preservation you need to thrive.

Take Action Before the Fall Deadlines

Don't let these fall deadlines catch you off guard. October 15 is the big federal extension deadline for individuals and C-Corps, while November 15 applies to Texas Franchise Tax extensions for businesses. Whether you need help navigating the One Big Beautiful Bill Act changes or you just want the peace of mind that comes with professional filing, we are here to help.

1. Review your revenue: If you are near the $2,650,000 mark, let’s talk immediately.
2. Gather your equipment receipts: Ensure we maximize that 100% bonus depreciation.
3. Schedule a consultation: Let us review your "margin" options to find your lowest possible tax bill.

Give us a call at (512) 537-4170 today to schedule your appointment. Let ProTaxMasters be your Strategic Shield this tax season.

Official Legal Disclaimer:

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

FinCEN BOI Disclosure: Under the March 26, 2025 Interim Final Rule, all domestic U.S. entities and U.S. persons are currently exempt from Beneficial Ownership Information (BOI) reporting. Only foreign-formed entities registered to do business in the U.S. may still have reporting obligations. While the Eleventh Circuit upheld the Corporate Transparency Act's constitutionality in December 2025, the domestic exemption remains in effect unless a final rule states otherwise.

Bonus Depreciation: As per the One Big Beautiful Bill Act (OBBBA), bonus depreciation for the 2026 tax year is set at 100% and is not subject to a phase-out schedule.

Notary Policy: Michael Garcia (Owner) does not notarize any tax documents he has personally prepared, in accordance with IRS Circular 230 and Texas state law.

No Professional-Client Relationship: The information provided in this blog post is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Accessing or reading this post does not create a professional-client relationship between the reader and ProTaxMasters.