Texas doesn’t have a state income tax, which leads some business owners to assume they only have one deadline to worry about. In reality, you’re dealing with federal tax deadlines that vary by entity type and a Texas franchise tax deadline that catches people off guard every year.

For federal returns, the deadline depends on how your business is structured. Partnerships filing Form 1065 and S-corporations filing Form 1120-S are due March 15. Sole proprietors reporting on Schedule C with their personal return and C-corporations filing Form 1120 are due April 15. If the deadline falls on a weekend or holiday, it shifts to the next business day.

The Texas franchise tax return is due May 15 each year. Most businesses formed or operating in Texas owe this, including LLCs, corporations, and partnerships. There is a no-tax-due threshold (currently $2.47 million in annualized total revenue), but even businesses below that amount are still required to file. Skipping the filing because you think you don’t owe anything is one of the most common mistakes Texas business owners make.

Missing a federal deadline triggers two separate penalties. The failure-to-file penalty is 5% of the unpaid tax for each month the return is late, up to 25%. The failure-to-pay penalty is 0.5% per month on the unpaid balance, also up to 25%. Both run at the same time, and interest accrues on top of everything. Even if you owe nothing, partnership and S-corp returns carry a per-partner or per-shareholder penalty that currently runs $220 per person per month. That adds up fast for multi-member LLCs.

On the Texas side, missing the franchise tax deadline can result in penalties of 5% for the first 30 days and an additional 5% after that, plus interest. More importantly, the Texas Comptroller can forfeit your entity’s right to do business in the state. That affects your ability to enter contracts, file lawsuits, and maintain good standing with lenders and clients.

Extensions are available for both federal and Texas returns. A federal extension gives you six additional months to file, but it does not extend the time to pay. If you owe taxes, you still need to estimate and send payment by the original deadline. Texas franchise tax extensions generally follow the federal extension, giving you until November 15 if you’ve filed for a federal extension.

The best way to avoid penalties is to stay ahead of these dates rather than reacting after the fact. Working with a provider that handles business tax returns means someone is tracking those deadlines for you and making sure filings happen on time. If your books aren’t ready, filing an extension buys breathing room without triggering penalties, as long as any estimated tax owed is paid.

If you’ve already missed a deadline, act quickly. The penalties are time-based, so every month you wait costs more. And if you’ve missed a Texas franchise tax filing from a prior year, that needs to be resolved before it spirals into a forfeiture. Our small business tax and bookkeeping services in the Greater Houston area include making sure you’re current on both federal and Texas obligations so deadlines don’t become expensive surprises.