Your Return Was Extended, Now What?

Tax Day has come and gone, and your tax preparer filed an extension for your return. This additional time allows for a more thorough and accurate filing, helping ensure that all relevant documents and tax-saving strategies are accounted for. While the extra time can be beneficial, it’s important to use it wisely so that filing is as seamless as possible. Let’s go through the best next steps to make the most of this extension.

Understanding Your Extension
A tax extension is exactly what it sounds like: time added to the due date of your return. If you have a partnership or S-corp, the new due date is September 15. If your personal, estate, trust, or C-corp return was extended, the new due date is October 15. If you have a private foundation or other tax-exempt organization, the new due date is November 15 (November 17 for 2025 due to the 15th falling on a Saturday). Any fiscal year returns receive similar treatment, where the due date is pushed out six months.

A tax extension is an extension to file, but the rules are clear that this is not an extension to pay. If your extension included an estimated tax payment, ensure it was submitted on time (postmarked or paid online by the original filing due date). If there is any uncertainty about whether a payment was made, address it immediately. The IRS accrues penalties and interest automatically, so proactive attention to this matter can prevent unnecessary costs.

What Just Happened? 
The mechanics of filing an extension are relatively simple. Each type of return has a single form that gets filed with two informational parts. Part 1 of the form is your identification information, and Part 2 is where it can get a bit tricky. You need to be able to estimate your total tax liability for the relative tax period. The form allows you to do the math of gross tax liability less payments already sent (payroll withholdings are included here) which will result in a balance due. If you are paper filing, this information gets put on a voucher that is sent to the IRS with a check. If you or your tax preparer is e-filing, this information gets electronically submitted to the IRS.

Many tax preparers will automatically file extensions for the returns of clients that had extensions in the past. The best practice for a taxpayer that utilizes the services of a tax preparer would be to have a clear understanding of the scope and timing of the engagement when it begins. A tax preparer can assist with the math of estimates and most likely has software to streamline the e-filing process. Always confirm your method of payment, if any is deemed due, to avoid the unpleasant surprise of additional penalties and interest.

What to Do Now 
An extension is not a free pass for you or your tax preparer to delay further. Instead, think of it as an opportunity to ensure accuracy and completeness. Use this time wisely to finalize all necessary details, as an extended return can be filed at any time before the new due date. Here’s what to focus on next:

1. Gather Your Missing Documents 
A common reason for extensions is waiting on key documents such as K-1s, 1099s, investment statements, or business expense breakdowns. Keep track of any outstanding paperwork and confirm expected delivery dates.

2. Engage in Strategic Tax Planning 
Extensions can provide valuable time to explore tax-saving opportunities. Work with your preparer to assess potential deductions, credits, and income strategies to optimize your tax position.

3. Review and Verify All Details
Filing an extension does not increase your audit risk, but ensuring your return is complete and accurate can help you avoid unnecessary IRS scrutiny. Use this time to verify your information, confirm supporting documentation, and ensure all calculations are correct.

4. Stay Current on Estimated Tax Payments 
If you have significant non-W-2 income, keep up with estimated tax payments for the current year. Along with any outstanding balance from the prior year, multiple estimated tax deadlines may occur before your extended return is filed. Catching up now can help avoid penalties.

5. Check State and Local Tax Obligations
Most states mirror federal extension rules, but some have separate requirements. Verify state and local extension policies to ensure compliance and avoid last-minute surprises.

Use Your Time Wisely 
While an extension provides flexibility, delaying action can lead to unnecessary stress. There are valid reasons for filing an extension, and now is the time to ensure everything is completed efficiently. Taking proactive steps will help you avoid the rush and potential complications as the final deadline approaches.

The Bottom Line 
Filing an extension is a strategic decision that allows for accuracy and thorough planning, so let’s capitalize on it. Gathering all necessary documentation, ensuring all details are in order, and maintaining open communication with your tax preparer will lead to a smoother and more efficient filing process.

Once your return is submitted, take a proactive approach for the next tax season. Identify areas for improvement, streamline record-keeping, and set up a plan to avoid last-minute scrambling. Reach out to your preparer to discuss strategies now, so you can stay ahead of the game and make tax time a smoother, less stressful experience next year.

Benjamin Meck, CPA, Deputy Managing Director of Accounting Services
Benjamin joined Baldwin Family Office in 2023 after spending 8 years gaining experience in corporate, cost, construction, and property accounting. He holds a B.S.B.A in both Accounting and Finance from Bloomsburg University of Pennsylvania. He earned the CPA designation in 2022. He is a member of the Pennsylvania Institute of Certified Public Accountants, the National Association of Tax Professionals, and the Construction Financial Management Association.