If you filed a 2025 tax extension, you have until October 15 to file your return — but that date is misleading.
Several of the decisions that will shape your tax bill are due before October 15. Miss one, and there’s no extension on the extension. The option is simply gone for the year.
Depending on which of the five below apply to you, that gap between acting and waiting can mean anything from a few hundred dollars in avoidable interest to a six-figure swing in what you owe. Here’s what to evaluate now, in the order the windows close — ending with the one that closes last and matters most.
Why October 15 Isn’t the Date That Matters
October 15 is a filing deadline. It has nothing to do with whether you’ve paid enough tax, funded a retirement plan, or locked in an election on your behalf.
Extension filers who wait until October 15 to address the items below lose the ability to reduce what they owe. By the time a return is typically prepared, two of the five moves below have already closed, a third has gotten meaningfully more expensive to fix, and a fourth requires setup time the calendar no longer allows.
Treating October 15 as the only date that matters is what can cause extension filers to leave real money on the table without ever realizing it.
1. True Up Your September 15 Estimated Payment
Timing: September 15
Who this applies to: Anyone whose income this year has come in meaningfully different from what you projected in April — for example, from a business sale, concentrated stock sale, bonus, or partnership/ investment income reported on a Schedule K-1 (the form partnerships, S-corps, and most private funds use to report your share of income to you).
Why it matters: The IRS requires you to pay in either 90% of this year’s tax or 100% of last year’s tax (110% if last year’s adjusted gross income was over $150,000) by set quarterly dates, or interest starts accruing on the shortfall (currently 7% annually, compounded daily). September 15 is the second-to-last of those checkpoints, and it’s the last one that gives you real income data to work off before the end of the year.
If your spring estimate now looks too low, increasing your September payment stops the interest clock immediately. Wait until October 15 to true up, and you pay interest retroactively on the gap. On a $2 million shortfall, that’s roughly $46,000 in interest for a four-month delay — money that simply disappears for having waited.
What to do now: Pull your actual year-to-date income and compare it to what your April estimate assumed. If it’s materially higher, increase your September 15 payment rather than waiting to true up at filing.
2. Confirm Your Entity’s State Tax Election
Timing: September 15
Who this applies to: Owners of a partnership or S-corp in a state with income tax, particularly high-tax states like California, New York, or New Jersey.
Why it matters: Most states now let pass-through businesses elect to pay state income tax at the entity level instead of the individual level — a workaround that lets the business deduct the full state tax as a business expense, sidestepping the federal cap on how much state tax an individual can deduct personally.
For a partner with $2 million of California-qualified net income, the election shifts $186,000 of state tax to the entity level. Since the federal SALT deduction cap is fully phased out at this income level, that owner could otherwise deduct only $10,000 of state tax personally. The result: $176,000 in additional deductions, worth roughly $65,000 in preserved federal tax at the top rate.
Here’s the part that gets missed: this election is locked in on your business’s tax return, and business returns on extension are due September 15 — a month before your personal October 15 deadline. If your CPA hasn’t confirmed the election and payment were made for every state your business operates in, that state’s benefit is gone for the entire year once September 15 passes, with no way to fix it retroactively. For owners in high-tax states, this is frequently worth well more than what a SEP-IRA could ever save you.
What to do now: Confirm with your CPA that the election and required payment were made in every state where your business has income. Don’t assume it happened automatically.
3. Start Tax-Loss Harvesting Now – Not Year-End
Timing: Now through late September
Who this applies to: Anyone who holds a concentrated stock position (especially from a business exit or IPO), public equities alongside fund investments, or received K-1s this summer confirming losses you haven’t yet acted on.
Why it matters: Every dollar of loss harvested offsets a dollar of realized gain, so a six-figure loss sitting unaddressed in a concentrated position can directly cancel out a six-figure gain elsewhere on your return — but only if there’s still time to act on it cleanly.
The wash-sale rule blocks you from claiming a loss if you buy the same or a substantially identical security within 30 days before or after the sale — a 61-day window in total. Wait until late December to start harvesting, and that window collides with year-end: you either lock in the loss and stay out of the position through early January, or you skip harvesting altogether.
Starting in September avoids that collision entirely and gives you room to actually reposition, rather than just sell and sit in cash. If your fund K-1s recently confirmed losses you can now use to offset other gains (for example, from a sale, a bonus, or elsewhere in your portfolio), this is the moment to act on real numbers instead of a spring estimate.
What to do now: Work with your wealth advisor to identify positions with unrealized losses and any confirmed losses from this summer’s K-1s and start the harvesting conversation now rather than in Q4.
4. Check Whether a Roth Conversion Is One of the Exceptions
Timing: Now through late September
Who this applies to: A narrow group. This is worth checking primarily if you had an unusually low-income year – for example, business owners in the period between selling their business and starting their next venture or multigenerational families converting specifically to pass tax-free growth to heirs. If you’re a high earner in a typical peak-income year, skip this one.
Why it matters: Converting a traditional IRA to a Roth means paying tax now on the converted amount at your current bracket, in exchange for tax-free growth and withdrawals later. Convert in the right year — a genuinely low-income year, or a long enough horizon that permanent tax-free growth outweighs the upfront cost — and you can shield decades of future growth from tax entirely. But convert in the wrong year, and you’re prepaying six figures of tax on a large balance for no real benefit — you were already going to owe it eventually, just later and possibly at a lower effective rate.
What to do now: If you fall into one of the two exception cases above, model the conversion with your wealth advisor before Q4, when year-end planning gets crowded out by other deadlines.
5. Decide on a Defined Benefit or Cash Balance Plan
Timing: October 15
Who this applies to: Business owners and self-employed individuals with consistent, provable business profit — not W-2 employees or businesses with unpredictable year-to-year income, as these plans require a funding commitment.
Why it matters: If you extended, October 15 is also your deadline to establish and fund certain retirement plans for 2025. Most people default to a SEP-IRA here, but a SEP caps out at $70,000 for 2025 — a number that barely moves the needle if you have a seven-figure tax bill.
A defined benefit or cash balance plan works differently: instead of a flat percentage-of-income limit, your contribution is calculated by an actuary based on your age and income. For business owners in their 50s and 60s, that can mean contributions in the $150,000 to $350,000+ range in a single year that’s fully deductible. Skip it in favor of a SEP, and you can leave up to $280,000 of deductible contribution capacity unused for this year alone, with no way to claim it later.
However, these plans require an actuary to design and typically commit you to funding at a defined level in future years. If you have employees, you’ll generally need to provide them a proportional benefit too. It’s why most business owners haven’t been advised to consider one — it requires plan design work most CPAs don’t do in-house.
What to do now: If you’re a business owner with strong, consistent profit, start the conversation with your wealth advisor and CPA immediately. Plan setup takes real time, and October 15 is a hard stop with no extension available.
The Window Is Shorter Than the Deadline Suggests
None of these five moves are things you can wait on until October 15 and still fully capture. Most of them close before that date arrives. A mid-year tax review is the fastest way to find out which of these apply to your specific situation – and act on the ones that do.
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Timely investment insights from our CIO Scott Welch