Your thyme should be flowering soon, mine is flowering now (some varieties are finished, some just starting). Cut the plant back by 1/3 after the flowers finish.

You COULD cut back now, but you're right that you'd be removing this year's flowering potential.

All my thyme is flowering and are all about 6-8 inches tall. These were started from seeds indoors last spring. They have survived a winter, so they are now a permenent plant. Just leaning over to pluck some stems gives you a big burst of aroma. Once you trim, remove the leaves from the stems and dry it. Once the flowers are gone past growth, it will drop seeds and spread.