Taxes

What Therapists Need to Know About Tax Extensions

Headshot of Bryce Warnes
February 26, 2024
February 26, 2024
Bryce Warnes
Content Writer

So the tax deadline for your therapy practice is fast approaching, and you’re nowhere near being ready to file. Your accountant recommends filing a tax extension.

They’re probably right. A tax extension can buy you the time you need to get your paperwork together so—with the help of your accountant—you can file an accurate return.

But there are a couple of caveats, especially when it comes to paying your taxes in a timely fashion. Here’s what you need to know.

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What is a tax extension?

When you file a tax extension, you buy yourself an extra six months to get your paperwork in order and file.

Meaning, the deadline for filing your taxes is automatically bumped six months into the future. 

Once you reach that bumped-forward tax deadline, though, there are no more extensions available. So it’s best to use the six months wisely and work with your accountant to prepare an accurate return.

What is the deadline for filing a tax extension for your therapy practice?

Your extension filing deadline is identical with your federal tax filing deadline.

If your therapy practice is a sole proprietorship, the deadline is April 15th. If it’s electing S corporation status, the deadline is March 15th.

As with most tax filing deadlines, if the 15th falls on a weekend or a national holiday, the deadline is moved forward to the next business day on the calendar.

Your new, extended tax filing dates

Once you’ve filed an extension, your new due date for taxes is six months after your original date.

So, if your therapy practice is a sole proprietorship, your deadline after filing an extension is October 15th. And if your therapy practice elects S corporation status, the deadline is September 15th.

Naturally, if those dates fall on weekends or national holidays, the deadline is moved to the next business day.

How to file a tax extension for your therapy practice

If you work with an accountant, they’ll file an extension for you. If you do your own taxes, it’s up to you to file the extension.

These are the forms you use to file for an extension:

Filing an extension when you pay your taxes

If you’re a sole proprietorship and you make quarterly estimated tax payments online, you can automatically file a tax extension next time you schedule or make a payment. To do so, log in to your IRS online account, use Direct Pay, or use the Electronic Federal Tax Payment System (EFTPS).

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Should you file for a tax extension for your therapy practice?

If your accountant recommends you file a tax extension, you should probably listen to them.

If you do your own taxes, and you won’t be able to file accurately by the deadline, filing an extension is usually the best option.

Filing a tax extension comes with no serious side effects. It will not:

  • Cost you extra money
  • Increase your likelihood of being audited
  • Put you on some sort of IRS “naughty list,” or otherwise sour your reputation with federal tax authorities

On the other hand, if you fail to either file your taxes on time or file for an extension, you could end up paying late filing penalties

And if you rush to file on time, you could file an inaccurate return—potentially resulting in penalties—or fail to take advantage of tax deductions for your therapy practice.

A tax extension to file is not an extension to pay

Filing a tax extension gets you more time to file your taxes, but it doesn’t get you more time to pay them.

If you’re paying your taxes in a lump sum for the prior calendar year, your payments are due on the usual date. And if you’re paying quarterly estimated taxes, the deadline for each quarterly payment still applies.

If you can’t afford to pay taxes for your therapy practice, talk to an accountant about short term extensions, penalty abatements, payment plans, and other strategies.

Heard can file a tax extension for your therapy practice

Heard can file a tax extension on your behalf. After you join, you’ll submit our extension survey and we’ll match you with a tax preparer to file the extension.

Please note that if you’re taxed as an S corporation and you join Heard after the March 15 IRS deadline to submit Form 1120-S without filing an extension on your own, then you may have to pay a failure to file penalty. The same is true for sole proprietors who join after the April 15 IRS deadline to submit Form 1040.

Questions about how to file your taxes with Heard? Check out our 2023 tax season frequently asked questions

First time filing? Review the tax deadlines for your therapy practice.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

Bryce Warnes is a West Coast writer specializing in small business finances.

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Simplified tax and accounting software built for therapists

Simplified tax and accounting software built for therapists

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