<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=351166518341071&amp;ev=PageView&amp;noscript=1">
Skip to main content

«  View All Posts

small business taxes /

Is It Bad to Have a Business Tax Extension?

January 12th, 2024 | 4 min. read

By Bryan Cremeen

In the context of taxes, business owners treat the word “extension” like poison. Extensions are things that everybody thinks they want to avoid at all costs, but they don’t know much about them. 

Are extensions really all that bad?

At CSI Accounting & Payroll, we’ve worked with small business taxes for over 50 years. In all that time, we’ve heard a variety of questions about extensions, such as:

  • Are extensions bad?
  • Is it bad if I file for an extension?
  • Is it bad if my accountant places me on an extension?

Blog - Is It Bad to Have a Business Tax Extension

Are Extensions Bad?

No, extensions are not inherently bad. Does that answer surprise you? You’re not the only one; a large portion of business owners think extensions are only negative.

It’s better to get an extension than to face penalties for filing your taxes late without an extension. They aren’t red flags to the government, and they will not trigger an audit.

The only downside is that if you owe money, it’s still due on the same date. The extension only gives you extra time to file the paperwork. This gives you little time to prepare if the amount is larger than expected.

However, you should examine the situation that led you to the extension. Did you need to file an extension for yourself, or did your accountant place you on an extension? 

The biggest question of all is: Why?

Is It Bad if I File for an Extension?

Yes, it’s bad if you need to file for an extension for yourself. In fact, this is one of our top 10 signs your business is ready for accounting services.

If you were trying to file your own taxes but had trouble getting your information together on time, you need to consider working with an accountant. 

Falling behind can be caused by factors like confusion and a lack of time. Some things are less DIY-able than others, and your expertise is in running your business, not filing your taxes. There’s no shame in admitting you need help!

However, it’s an entirely different situation if you’re paying a professional accountant who’s putting you on an extension.

Is It Bad if My Accountant Places Me on an Extension?

It depends. This situation is a bit more complicated. Who is to blame: your accountant, yourself, or the situation?

If you’ve worked with your accountant for a while and provide all of the necessary information on time, there’s no reason to place you on an extension. If they don’t have time for you, then you should consider a different solution.

Otherwise, if you’re onboarding during peak tax season or were late to provide your information, then it makes sense if they need to put you on an extension. 

Regardless of the reason why your accountant needs to place you on an extension, if they communicate your deadlines and responsibilities to you, you’ll be fine for now. Just make sure you tackle the problem for the future – and don’t procrastinate!

Avoid Extensions in the Future

Now that you know about the good and the bad of extensions in different situations, are you ready to check out monthly accounting services?

If so, please consider CSI Accounting & Payroll! We’ll never place you on an extension if we have your information on time. To see if we can be a good fit for your business, click the button below for a free consultation:


Not ready to talk? That’s okay! First, learn more about taxes by clicking the image below:

Read the complete guide to Small Business Taxes For Beginners

Bryan Cremeen

Bryan joined CSI Accounting in 2019. He joined the team after CSI purchased his accounting firm, AccountSource LLC, which he had owned since 2005. He graduated from St. Cloud State in 2001 with a Bachelor's Degree in Accounting and has been an Enrolled Agent since 2010. Before owning his own accounting practice, Bryan had worked at the State of MN handling financial reporting and had been in private industry as a Controller. His primary responsibilities include overseeing the accounting department and making sure clients are receiving quality service. Fun Fact: Bryan has played soccer since the age of 4. He still plays soccer year round through various adult leagues and is an avid supporter of the Minnesota United MLS soccer team. COYL!!! (Come on, you Loons!!!)