Tax Extensions 101: Your Guide to Extending Your Tax Filing

Tax season has a way of sneaking up on you. One minute, you’re focused on running your business, and the next, you’re staring down an impending filing deadline with documents still trickling in, books that need tidying up, and more questions than answers. If that sounds familiar, you might be considering a tax extension. 

Filing an extension can be a strategic move, giving you more time to prepare an accurate return and avoid rushed mistakes. But here’s the part many business owners and individuals get wrong: an extension only gives you more time to file—not more time to pay. Any taxes owed are still due by the original deadline, and pushing things off without a plan can lead to penalties and interest that add up fast. 

So, when does filing an extension make sense? How does it work for different types of taxpayers? And most importantly, how do you make sure you’re not setting yourself up for an even bigger headache down the road? 

Understanding Tax Extensions by Entity Type 

Not all tax deadlines are created equal. While many think of April 15 as Tax Day, business entities have different filing schedules—and different extension deadlines. 

Individuals (Form 1040, Including Sole Proprietors and Single-Member LLCs) 

For most individuals, including those who operate sole proprietorships or single-member LLCs, Tax Day falls on April 15. Filing an extension gives you until October 15, to submit your return. 

But here’s where many get tripped up: if you expect to owe taxes, that amount is still due by April 15. Even if you don’t know the exact number yet, it’s important to estimate your liability and make a payment with your extension request to avoid penalties and interest. 

S Corporations and Partnerships (Forms 1120-S & 1065) 

If your business is structured as an S Corporation or a Partnership, you’re working with an earlier deadline—March 15. Filing an extension pushes your deadline to September 16, 2024. 

Since these are pass-through entities, they don’t typically owe taxes themselves, but the income flows through to the owners’ individual tax returns. That means if you’re an S Corp shareholder or a partner, you might still have a tax bill due in April. 

C Corporations (Form 1120) 

C Corporations follow the same schedule as individuals, with an April 15, deadline and a six-month extension to October 15. But unlike pass-through businesses, C Corps can owe taxes directly, so estimated payments are critical to avoiding penalties. 

Trusts and Estates (Form 1041) 

Trusts and estates also fall under the April 15 deadline, with an extension available until October 15. These filings can be complex, especially when distributions affect beneficiaries’ taxes, so getting ahead of the deadline is key. 

An Extension to File, Not an Extension to Pay 

The biggest misconception about tax extensions is that they offer extra time to pay what you owe. They don’t. 

If you file for an extension but don’t pay at least 90% of your estimated tax liability by the original due date, penalties and interest start accumulating. And while an extension can help avoid the failure-to-file penalty (which is much steeper), it doesn’t shield you from late payment penalties and interest. 

This is why estimating your tax liability—even if it’s not perfect—is so important. A CPA can help you calculate what you should pay with your extension request, so you’re not blindsided later. 

When Does Filing an Extension Make Sense? 

An extension isn’t just a way to procrastinate. In fact, it can be a smart move in certain situations: 

• You’re waiting on key tax documents – If you receive K-1s from partnerships or investments, those can arrive late, making it impossible to file on time. 

• Your financials need work – Rushing through your books at the last minute can lead to costly mistakes. 

• Your tax strategy is evolving – If you’re working with a new CPA or restructuring your business, more time can mean a more strategic filing. 

• You want to avoid errors and audit risks – A rushed return increases the chances of missing deductions or misreporting income. 

How a CPA Helps You Avoid Extension Pitfalls 

Filing an extension is easy. Filing an extension correctly—while minimizing penalties and keeping you compliant—is where expert guidance makes a difference. 

A CPA does more than just submit forms. They: 

• Help you estimate taxes owed so you’re not hit with penalties later 

• Ensure your financials are in order to maximize deductions and avoid errors 

• Advise on tax-saving strategies that might be overlooked in a last-minute filing rush 

• Keep you compliant with IRS rules, especially if you have multiple entities or complex income streams 

At PaulHood, we don’t just file tax returns—we guide individuals and business owners through tax planning, compliance, and long-term strategy. If you’re considering an extension this year, don’t wait until the last minute. Reach out today, and let’s make sure your taxes are filed on time, your payments are accurate, and you feel confident moving forward.