Should I File a Tax Extension? A Business Owner’s Guide

If you’re a business owner considering a tax extension this year, you’re not alone.

Extensions are common. They’re easy to file. And in most cases, they’re totally fine.

But there are some things you need to know before you check that box and move on. Because while filing an extension is often harmless—misunderstanding how they work can cost you.

What a Tax Extension Actually Does

When you file an extension, you’re asking the IRS for more time to file your return—not more time to pay your taxes.

It gives you an extra 6 months to finalize and submit your return (typically moving the deadline from April 15 to October 15).
That’s it. That’s all it does.

But You Still Have to Pay by April 15

This is the biggest misunderstanding we see:

Filing an extension does NOT delay your payment deadline.

If you expect to owe taxes—and most business owners do—the IRS still expects that payment by April 15. Otherwise:

• You’ll owe late payment penalties
• You’ll start racking up interest
• You might miss the mark on your quarterly estimated payments for next year

“But I Don’t Know What I Owe Yet…”

Exactly.
And to figure out what you owe with any level of confidence, you basically have to prepare the return anyway.

So if you’re that far into it, why not just file?

We’re not anti-extension. But we don’t recommend them unless they’re really necessary.
For many business owners, extensions create more friction than they solve.

When Extensions Actually Make Sense

There are times when filing an extension is the right move:

• You’re waiting on key documents (K-1s, brokerage statements, etc.)
• You had a major transaction and still need cost basis info
• You had a personal issue—illness, family emergency, unexpected events
• You’ve hired a new CPA,