Planning for extensions: a summer strategy for completing client tax returns

Tax season does not have to be a stressful scramble at the last minute. Filing an extension gives you and your client extra breathing room by shifting some of the workload into a more manageable summer period. With an extension, individual clients have until Oct. 15, 2025, to file their 2024 Form 1040, U.S. Individual Income Tax Return. Any taxes owed still need to be paid by April 15, 2025, as it’s an extension to file, not an extension to pay. Note that some taxpayers may have different deadlines, especially if affected by disaster provisions.

Why consider an extension?

Clients might file an extension because it shifts the deadline to a slower period (for the preparer), allows them more time to gather documents, engage in detailed discussions about their tax situation and prepare thoroughly. This is all available without penalty, provided any taxes owed are paid by the original deadline.

For the preparer, an extension generally means an unhurried pace during the slower summer months, which translates into several benefits:

• Lower last-minute pressure: Both the preparer and their client’s experience are less stressful by avoiding a potentially rushed, last-minute filing
• Enhanced thoroughness: Extra time allows for a more careful review of the return, reducing the likelihood of oversights
• Improved client communication: With proactive planning and more opportunities for client interaction and discussion, practitioners can address questions and complex issues more effectively

A practical example

Consider the Meyer family, who experienced several financial changes during 2024. They:

• Purchased a new home
• Started a small home-based business
• Incurred unexpected medical expenses
• Purchased an electric vehicle
• Are planning on purchasing a used, clean vehicle in 2025 for their business

This hypothetical family illustrates why having extra time in the summer can be advantageous – it allows you to work with your clients through each change methodically.

Effective client engagement strategies

Getting clients to submit their tax documents during the summer can be challenging, but you can make it happen with a structured approach and consistent communication.

1. Emphasize the benefits of an extension

   a. Inform clients that summer is an ideal period for completing their return due to the slower pace during this season. Let them know there is no penalty for filing an extension, which gives them extra time to gather and review their documents and engage in discussions that might be difficult during the hectic tax season.

2. Use a timeline with due dates

   a. Provide a clear, step-by-step summer timeline. Break the process into manageable tasks with specific deadlines (e.g., submit all income documents by June 30). If necessary, provide reminders ahead of each deadline.

3. Leverage automation and technology

   a. Use secure online portals for document uploads. These portals are common with most tax preparation software. Automate client reminders, which may also be part of the tax preparation software package.

   b. Review Publication 4557, Safeguarding Taxpayer Data.

4. Offer incentives

   a. Consider implementing measures such as increasing fees for late documents to motivate timely compliance.

5. Make it easy for clients

   a. Provide a detailed checklist of required documents. Offer phone or video consultations and allow clients to submit documents in batches.

6. Follow up

   a. If deadlines are missed, send personalized reminders via email, text or phone call. Emphasize the benefits of providing documents and offer support to overcome any hurdles.

7. Create a sense of urgency

   a. Inform clients that your capacity is limited. To guarantee timely completion, documents must be submitted by a specific deadline (e.g., all documents due Aug. 1).

8. Address procrastination and anxiety

   a. Reassure clients who feel overwhelmed by the process. Offer quick introductory calls to help them start gathering their paperwork.

While an extension provides a welcome break, it’s important to remember that, as a tax practitioner, you can do only so much. Your ability to review and prepare returns effectively hinges on receiving complete and timely information from your clients. If documents are submitted late or incomplete, even the best-laid plans can fail, potentially leading to a late-filed return and additional complications.

So, while you’re prepared to offer support throughout the summer, the responsibility to provide necessary documentation in a timely manner ultimately lies with the client. Encourage clients to take advantage of this extended timeline to work frequently – keeping in mind that delays on their part can result in unintended consequences, such as a late-filed return.

By setting clear expectations, leveraging technology and maintaining proactive communication, you can create a relaxed yet efficient tax season that benefits you and your clients. Stay proactive, stay realistic and work together to make tax season as stress-free as possible.