2026 Tax Savings Checklist for Houston Individuals and Small Businesses

A year-round guide to the deductions, credits, and strategies most Houston taxpayers miss.

Most people only think about taxes in March and April. By then, almost every meaningful tax-saving move for the prior year is already locked in. The taxpayers who consistently keep more of their income are the ones who plan throughout the year — and who know which deductions and credits actually apply to their situation.

This checklist covers the 25 strategies we work through most often with our Houston and Fort Bend County clients. Some apply to almost everyone; others are situation-specific. Use this as a planning tool, not a substitute for personalized advice.

For Individuals and Families

Retirement Account Contributions

• 401(k): Contribute up to $24,500 ($32,500 if you’re 50+) to a traditional 401(k). Every dollar reduces your taxable income today.
• Traditional IRA: Up to $7,500 ($8,600 if 50+), deductible depending on income and whether you have a workplace plan.
• Roth IRA: No upfront deduction, but tax-free growth for life. Especially valuable for younger or lower-income earners.
• HSA contributions: If you have a high-deductible health plan, contribute up to $4,400 (single) or $8,750 (family) for 2026. Triple tax benefit — deductible going in, growing tax-free, withdrawn tax-free for medical expenses.

Education Costs

• American Opportunity Tax Credit: Up to $2,500 per student per year for the first 4 years of college.
• Lifetime Learning Credit: Up to $2,000 per return for any post-secondary education, including continuing education.
• 529 Plan contributions: Texas doesn’t offer a state deduction, but earnings grow tax-free if used for qualified education expenses.

Itemized Deductions Worth Tracking

• Charitable contributions: Cash and non-cash donations to qualifying 501(c)(3) organizations. Document everything — keep receipts and acknowledgment letters.
• Medical expenses: Only deductible above 7.5% of AGI, but worth tracking if you had a major year (surgeries, ongoing care, fertility treatments).
• State and local taxes (SALT): Capped at $10,000. Texas doesn’t have a state income tax, so this is mostly property tax for Houston homeowners.
• Mortgage interest: Deductible on up to $750,000 of acquisition debt for homes bought after 2017.

Less Obvious Individual Tax Savers

• Tax-loss harvesting: Sell underperforming investments to offset gains. Up to $3,000 of excess losses can offset ordinary income each year.
• Qualified dividends and long-term capital gains: Taxed at 0%, 15%, or 20% depending on income — much lower than ordinary rates.
• Saver’s Credit: Lower-income filers contributing to retirement accounts may qualify for up to $1,000 ($2,000 married) tax credit.

For Small Business Owners

Entity-Level Strategies

• S-Corp election: Once net profit clears $60k, electing S-Corp status can save $5,000–$15,000 a year in self-employment tax. See our entity comparison guide.
• Section 199A QBI deduction: Up to 20% of qualified business income deductible for pass-through entities. Phased out at higher income levels for some service businesses.
• Section 179 expensing: Deduct the full cost of qualifying equipment (up to $2,560,000 for tax years beginning in 2026, phasing down once you place more than $4,090,000 in service) in the year purchased, instead of depreciating over years.
• Bonus depreciation: 100% and permanent for qualified property acquired after January 19, 2025. Property acquired on or before that date is still on the old phase-down — 20% for 2026 — and has to be in service before January 1, 2027.

Retirement Plans for the Self-Employed

• SEP-IRA: Contribute up to 25% of net self-employment income, capped at $72,000 for 2026. Easy to set up, no employee contributions required.
• Solo 401(k): Higher contribution limits than SEP for many earners ($24,500 employee + 25% employer match). Best for solo operators with no employees.
• SIMPLE IRA: Good for small businesses with employees. Required matching contributions, but simpler than a full 401(k).

Business Expenses Often Missed

• Home office deduction: Either simplified ($5/sq ft, up to 300 sq ft) or actual expenses method. Must be regular and exclusive use.
• Vehicle expenses: Standard mileage rate (67¢/mile in 2024, similar in 2026) or actual expense method. Track miles all year.
• Business meals: 50% deductible. Document who, when, and the business purpose.
• Health insurance premiums: Self-employed taxpayers can deduct 100% of health insurance premiums for themselves and family.
• Professional development: Conferences, continuing education, books, and software for your business are all deductible.

Year-End Strategies (Q4 Action Items)

The last 90 days of the year are when most last-minute tax savings happen. Items to evaluate by December 15:

• Maximize retirement contributions to 401(k) (must be done by Dec 31 for employee deferrals).
• Make any planned charitable contributions before year-end.
• Harvest investment losses to offset gains.
• Defer income (where possible) or accelerate deductions into the current year.
• Purchase planned equipment or assets to use Section 179 or bonus depreciation.
• Pay state estimated taxes (note: TX has no state income tax, so this mainly applies to side income in other states).
• Review your withholding to avoid a big balance due or excessive refund.

Houston-Specific Notes

Texas has no state income tax, which is a major advantage. But Houston-area taxpayers should still pay close attention to:

• Property taxes: Among the highest in the country. Make sure you’re using your homestead exemption and reviewing your appraisal every year.
• Texas Franchise Tax: Applies to LLCs, S-Corps, and most other entities. Most small businesses are below the no-tax-due threshold but still must file.
• Sales tax compliance: If you sell taxable goods or services, registering with the Texas Comptroller and filing on time avoids penalties.

Work With a CPA Who Plans Year-Round

The best tax outcomes come from year-round planning, not just March prep. We work with Houston individuals and small businesses on quarterly tax planning, entity strategy, and IRS issue resolution.

Schedule a Tax Planning Call →

This checklist is general information current as of 2026. Tax laws change frequently. Confirm any strategy with a qualified CPA before relying on it.