As a small business owner in the San Marcos or New Braunfels area, you are an expert at what you do. Whether you are running a boutique shop on the Square, managing a construction crew, or freelancing as a creative professional, your focus is on your craft. But let’s be honest: when tax deadlines start creeping up, even the most confident entrepreneur can feel a little overwhelmed.

At ProTaxMasters, we call ourselves "the translators." Our goal is to take the complex, intimidating language of the IRS and turn it into simple, actionable steps that protect your hard-earned money. With the third quarter (Q3) coming to a close, it is time for a "Strategic Shield" checkup.

By taking a few moments now to review these seven areas, you can avoid scary notices later and find the peace of mind you deserve. Here is what every Texas small business owner should review before October 1st.

1. Check Your Estimated Tax Payments

The most important date on your Q3 calendar is September 15, 2026. This is the deadline for your third quarterly estimated tax payment.

If you are a sole proprietor, a partner, or an S-Corp shareholder, the IRS generally expects you to pay as you go. Many "little guy" business owners get caught underpaying because their business grew faster than they expected. If you’ve had a great summer, your previous estimates might be too low.

Reviewing your income now prevents those frustrating underpayment penalties. If you are looking for small business tax services in San Marcos, we can help you calculate exactly what you owe so you don’t overpay or leave yourself vulnerable to the IRS.

2. Review Your Q3 Payroll Tax Filings

Payroll is often the biggest headache for small businesses. Between federal withholding, Social Security, and Medicare, it is easy to miss a decimal point. Unlike income tax, payroll taxes are "trust fund" taxes: meaning the IRS is extremely strict about them being handled correctly.

Take a look at your records for July, August, and September. Are your deposits matching your filings? If you aren’t 100% sure, now is the time to fix it before the year-end rush. Proper payroll management is a core part of our tax preparation in New Braunfels, ensuring that you stay compliant without the stress.

3. Start Planning for 2027 S-Corp Elections

We often get asked about the "magic" of S-Corps. While an S-Corp can save you a significant amount in self-employment taxes, it is a complex decision that requires a careful cost-benefit analysis. The savings on your payroll taxes must be weighed against the increased costs of compliance, payroll processing, and more complex tax filings.

It is too late to make an S-Corp election for the current 2026 tax year (unless you have a very specific set of circumstances for a late election). However, Q3 is the perfect time to run the numbers for 2027. If your business profit has hit a threshold where the tax savings outweigh the administrative costs, we can start the planning process now. S-Corp tax preparation in Texas requires a pro-active approach, and we can help you decide if this transition is right for your growth.

4. Clean Up Your Expense Categorization

Do you have a "shoebox" of receipts or a digital folder that’s getting a bit crowded? Q3 is the best time for an expense cleanup.

When you wait until January to categorize your spending, you almost always miss deductions. Review your bank statements and make sure everything is in the right bucket. Did you buy new equipment? Did you have travel expenses for a conference?

By keeping your books clean now, you create a "Strategic Shield" that makes any potential future audit a breeze because your documentation is already organized and ready.

5. Fund Your Retirement Plans

Retirement plans can help you in two different ways, and this is where many business owners get confused. First, employer contributions like profit-sharing, SEP IRA contributions, and SIMPLE IRA employer contributions are generally tax-deductible business expenses. That means they can reduce your business's taxable income. Second, employee elective deferrals into plans like a Solo 401(k) or SIMPLE IRA can reduce your personal taxable income.

Here are the main 2026 limits to know:

1. Solo 401(k):

   • Employee elective deferrals of up to $24,500
   • Up to $32,500 if you are age 50 or older and eligible for catch-up contributions
   • Employer profit-sharing contributions of up to 25% of compensation
   • Total combined contribution limit of up to $72,000, not counting catch-up contributions

2. SEP IRA:

   • Employer-only contributions
   • Up to 25% of compensation
   • Capped at $72,000 for 2026

3. SIMPLE IRA:

   • Employee deferrals of up to $17,000
   • The employer must also contribute either a 3% match or a 2% nonelective contribution

The big takeaway is simple: if you want to reduce business profit, employer contributions may help. If you want to reduce personal taxable income, elective deferrals may help. Q3 is the right time to set up a plan or adjust your contributions so you are not scrambling at year-end.

Bonus: SECURE 2.0 Startup Credits — Here's something most SMBs don't know. If you're a business with under 100 employees and you haven't offered a retirement plan before, SECURE 2.0 offers tax credits that can cover up to 100% of your plan startup costs for the first three years (up to $5,000/year), plus up to $1,000 per employee per year in employer contribution credits for the first five years. There's even an extra $500/year auto-enrollment credit. For a 20-person shop, that could mean $15,000+ in total tax credits the first year alone. This effectively removes the cost barrier to offering a 401(k), SEP, or SIMPLE IRA. Ask us how to stack these credits for your business.

If you want help choosing the right fit, our Small Business Advisory Services can walk you through your options in plain English.

6. Perform a Quarterly Reconciliation

This sounds technical, but it’s actually very simple: do your records match your bank accounts?

Most businesses miss this step, leading to "ghost" income or expenses that aren't real. Reconciling your accounts every three months ensures that your financial reports are accurate. When you know exactly how much cash you have, you can make better decisions for the rest of the year. Accuracy and timely filing are our top priorities, and a quarterly check is the best way to ensure both.

7. Maximize Bonus Depreciation under the One Big Beautiful Bill Act

One of the most exciting pieces of news for 2026 is the One Big Beautiful Bill Act. Under this law (Public Law 119-21), bonus depreciation for the 2026 tax year is set at 100%.

This is a huge win for "the little guy." It means if you buy qualified equipment or machinery for your business this year, you can likely deduct the entire cost in 2026 rather than spreading it out over many years. There is no phase-out schedule to worry about this year. If you’ve been waiting to upgrade your tools or technology, the One Big Beautiful Bill Act makes right now a very strategic time to invest in your business.

Meet Your Guide: Michael Garcia

When you work with ProTaxMasters, you aren’t just getting a software program; you’re getting a partner. Michael Garcia has been serving the Texas community since 2018. As an AFSP participant, an EA candidate, and a Texas Notary Public, Michael is dedicated to providing the protective buffer you need between your business and the IRS.

Ready for Your Checkup?

Don't wait until the October rush to see where your business stands. Whether you need help with a complex S-Corp analysis or just want someone to handle your quarterly reconciliations so you can sleep better at night, we are here to help.

Take Action Today:
Call us at (512) 537-4170 to schedule your Q3 Business Tax Checkup. Let’s make sure your "Strategic Shield" is strong and your wealth is preserved.

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.