Extension season, done right: how four firms handle it without the April scramble

Extension season sneaks up on firms every year. It doesn’t have to.

For most firms, extensions are a March problem. The individual deadline is bearing down, half the returns are waiting on documents that haven’t arrived, and somewhere in the pile are the business returns that were actually due back on March 15th. So the extensions get filed in a rush, at the worst possible moment, alongside everything else.

There’s a calmer way to do it, and it isn’t complicated. It’s mostly a matter of deciding a few things in advance instead of at the deadline.

We put that question to four firm owners on a live roundtable in the TaxDome Community: how do you actually handle extension season?

They run different firms in different states, and what’s interesting is how much they agreed on.

Meet the firms 

• Yehuda Tenenbaum, EA runs Y10 Tax Solutions, a solo practice in Baltimore, MD
• Jeremy Wells, EA, CPA is COO and head of tax at Steadfast Bookkeeping, a virtual firm in St. Augustine, FL
• Trudy Langston, EA founded Savvy Tax Chick, a bookkeeping and tax firm in Portland, OR
• Drew Chumley, CPA is a partner at Seamless, a boutique CAS, tax and advisory firm in Fort Worth, TX

File business extensions in January, not at the deadline 

The biggest shift several of the firms have made: don’t wait for March.

Business returns are due March 15th, a month ahead of the individual deadline, and it’s an easy one to lose track of. Worse, S corp extensions get rejected more often than people expect. The IRS doesn’t always have a clean record of which entities have a valid S election, so it bounces a lot of 7004s. If that rejection lands in January, you have two months to sort it out and paper file. If it lands on March 14th, you have a day.

Jeremy’s firm files every business extension in the first couple weeks of January for exactly this reason.

Drew does the same, extending every business return in the January to February window so nothing gets caught out.

Start simple, and let your setup grow 

If you’re newer to this, the most reassuring thing the panel said is that none of them started with a polished system.

Drew’s firm tracked extensions in a spreadsheet the first year. Just a list: extended, not extended. Year two they added tags. Year three they had a light pipeline that actually held up. The setup earned its complexity over three seasons instead of arriving fully formed.

Yehuda put the principle behind it plainly: don’t copy someone else’s template and force your firm into it.

The lesson isn’t “build it like Drew did.” It’s “start with what you actually need this week, and add the next thing when you feel the gap.”

One place to track everything beats a pipeline for every process 

An extension isn’t a separate project. It’s a step inside preparing the return. Three of the four firms treat it that way and keep everything in a single pipeline, using tags to mark where each account stands.

Trudy’s admins handle it directly: tag the accounts that need an extension, then switch the tag once it’s filed and accepted. Simple, and it holds up when the season gets loud.

She learned that the hard way. The year before, she’d built a separate holding stage for extensions. It backfired.

The holding stage kept shuffling jobs to the end of her pipeline, and pulling them back triggered automations that fired client emails that shouldn’t have gone out. The fix was to stop moving jobs around at all and let a tag carry the information instead.

Track two deadlines so you never have to move a job 

This is the piece that makes the “one pipeline” approach work, and it’s worth stealing even if you use completely different software.

Every return really has two deadlines. There’s the statutory one the IRS cares about, which moves to September 15 or October 15 once the extension is filed. And there’s your internal deadline, the date your firm actually plans to finish the work. Those are different dates, and most firms only track one.

Jeremy’s firm tracks both on every job. The statutory due date rolls forward when the extension files. The internal deadline stays put, because that’s what they manage their workload against. Because the dates carry the information, an extension never means dragging a job to a different board.

Never file a blank extension 

One technical point the panel was firm about: an individual extension needs a real estimate of what the client owes. A blank or zero-liability extension can be ruled invalid, and an invalid extension means penalties land on your client.

You don’t need perfect numbers. You need honest ones. Jeremy’s firm runs tax projections in the fall, and those projections become the estimate on the extension. No projection? Use the prior year. If you keep the client’s books, adjust the prior year with what the current numbers are telling you.

How to explain extensions to a nervous client 

New clients often hear “extension” and think something’s gone wrong. One of the sharpest exchanges of the session was about the pushback firms get, and how to answer it.

The most common objection is why give the IRS more time if you don’t have to. 

The panel’s answer is that the math is on the client’s side. Late filing costs 5% a month. Late payment costs only 0.5% a month. An extension removes the bigger late-filing penalty entirely. The client still pays what they owe by the original deadline to keep the smaller late-payment penalty off the table.

There’s a second benefit that self-employed clients tend to appreciate once it’s explained. An extension also extends the window to make SEP or solo 401(k) employer contributions, which is real money and a real deduction they’d otherwise lose. (Regular IRAs still close on April 15.)

There’s also the experience itself. When the whole thing runs through a single app, approving, paying, getting reminders, the extension stops feeling like a warning sign to the client. The client acts from their phone, and the firm’s job moves forward on its own.

And the framing that lands with a hesitant new client is simple honesty about timing. Drew’s version is blunt: a new client says they want to file on time, and the answer is “well, you came to me in March, that’s probably not gonna happen, and here’s why.”

Get the one-page version 

We pulled the five core moves into a one-page guide you can keep by your desk while you build next season’s setup, or hand to your team.

It covers all of it: filing in January, tracking two deadlines, one pipeline and tags, good-faith estimates, and how to explain extensions to clients. Real practices from real firms, on a single page.

Where to start 

If there’s one takeaway from four firms who’ve done this a few times over, it’s that you don’t have to get it perfect before next season. Start with one stage, add as you go, and let your setup grow the way these firms did.

The thread running through all of it: when your firm and your clients work the season in one place, extensions stop being a separate fire drill. They’re just part of how the work flows.

Or as Yehuda put it: “Just start today. Don’t delay.”