It’s Time to File An Extension — But Not for Everyone

Strategic advice for tax pros navigating the final days before April 15

It is time for another issue of Taxing Thursday! (Today feels especially taxing!) We’re in the final days before April 15. If your inbox looks anything like mine, it’s full of clients who just sent in documents, remembered they need help, or just opened a proposal we sent in February.

Today isn’t the day to rush through a return just to meet a deadline.

It’s the day to file the extension — but only for engaged clients.

Don’t File Extensions for Everyone

Filing extensions for every past client “just in case” might feel safe — but it’s a mistake.

Filing for former clients or prospects = unnecessary risk.

My policy is simple: I don’t file extensions for anyone who isn’t a client. And by "client," I mean someone with a signed, active engagement, that has paid me.

(Full disclosure: Like tax law, I do have exceptions. If it’s someone I’ve worked with before and there’s a legitimate reason for the delay, I may file — but that’s rare.)

Careless Extensions Can Backfire

Extensions aren’t always harmless. In some cases, filing one can actually harm a client.

Example: Clients Filing for Bankruptcy

Filing an extension can delay a taxpayer’s ability to discharge tax debt in bankruptcy due to the 3-Year Rule:

This rule states that to discharge delinquent income taxes, the due date for filing the income tax return must be more than three years before you file for bankruptcy. Typically, your federal and most state income taxes become due on or around April 15th of each year, but if you filed an extension, the due date will be later (typically October 15th). (11 USC § 507(a)(8)(A)(i))

Proper analysis is essential when tax debts and bankruptcy intersect. If you're unsure whether a tax debt might be dischargeable, make sure you understand the ins and outs — or consult someone who does. I have a bankruptcy analysis case study planned for a future post!

(Remember, Circular 230 §10.35 requires that we are competent in the matters we take on.)

Don’t File for Everyone “Just in Case”

Every year, I see a few longtime clients whose extensions get rejected — because some firm they worked with years ago has already filed one for them.

That firm doesn’t know the client’s current situation and likely filed a $0 extension without a valid estimate of taxes due.

Important reminder:

An extension without a valid estimate of taxes can be deemed invalid. Many tax professionals are not aware of this.

I wasn’t either — until it came up in Tom’s Inner Circle. He has an excellent article covering this. (Tom Talks Taxes - Best Practices for Form 1040 extensions)

What to Tell Clients

Be clear, direct, and professional:

“I only file extensions for clients who have engaged our services. If I haven’t heard from you by [insert your deadline], I will not file an extension on your behalf.”

Set the boundary — and stick to it.

Remember: It’s Not a Bad Thing!

Extensions are not something to apologize for.

They:

• Give clients time to gather their documents

• Give you the ability to complete high-quality work

• Reduce the risk of errors, amendments, and burnout

Treat extensions as part of your professional strategy — not a last-minute life raft.

This time of year can be intense — but it is also a chance to refine how we work.

File extensions when they make sense. I recommend not waiting until the last minute to file extensions because software issues can happen.

Know the rules. Protect your clients. Protect your practice.

And when it’s all over? Take a deep breath and enjoy life! Have questions? Please ask below.

🎉 Giveaway Time!

A big thank you to all of my subscribers — and an extra shoutout to my paid subscribers!

Writing this Substack is one of my favorite things, and after April 15th, I’ll be rolling out a list of exclusive benefits just for you.

As a small thank you:

If you restack this post on Substack or share it on social media and tag me, you’ll be entered into a drawing for a Starbucks gift card. ☕

Let’s be honest — we could all use a caffeine boost on April 15th.

The winner will be announced the morning of April 15th.