Each year, millions of taxpayers find themselves scrambling as the tax deadline approaches, with many ultimately filing for an extension. While extensions provide extra time to submit your return, they don’t give you more time to pay taxes owed, and they often create unnecessary stress and penalties if not managed correctly.

The good news? Filing an extension is often avoidable with some foresight and good financial habits. Here are three key strategies to help you avoid needing a tax extension next year.

1. Get Organized Early and Maintain Year-Round Records

One of the most common reasons our clients file for an extension is simply not being ready. Whether it’s lost documents, untracked expenses, or forgotten income sources, poor organization leads to delays and mistakes.

To avoid this:

Set up a digital filing system. Create a folder for the tax year (e.g., “2025 Taxes”) and store all your W-2s, 1099s, mortgage interest statements, and donation receipts as you receive them.
Track expenses and income throughout the year. Use budgeting or accounting software that lets you categorize transactions and generate reports when it’s time to file. For small businesses, we recommend using QuickBooks Online which can be shared with our accountants.
Keep a checklist of expected forms. If you have multiple income sources—like freelance work, investments, or rental properties—make a list of the forms you should expect each tax season and check them off as they come in.
By having everything ready before tax season even starts, you’ll save time and reduce stress when it’s time to file.

2. Meet With a Hallows & Company Tax Professional Before Year-end

Waiting until March or April to reach out to your accountant is a recipe for delays. Many of our tax preparers are fully booked by then, especially if you have a complex return.

Instead:

Schedule a tax planning meeting in the fall or early winter. This gives you time to take advantage of last-minute strategies that could reduce your tax liability. In addition, if you are going to have to pay tax, it gives you time to prepare and save.
Discuss major life or financial changes. New job? Got married? Bought a house or sold investments? These events can impact your tax situation, and planning ahead ensures nothing gets missed.
Confirm your document checklist and timeline. Our tax pro can help you identify what paperwork you’ll need, and by when, so there are no surprises.
Meeting with your tax advisor early gives you a clear roadmap for filing and eliminates the need for an extension due to scheduling issues or missing information.

3. Make Estimated Tax Payments If You Have Self-Employment or Side Income

If you’re self-employed, work as a contractor, or earn income from side gigs, investments, or rental properties, you’re likely responsible for making estimated quarterly tax payments. Many taxpayers skip these or underestimate how much they owe, resulting in a large tax bill they’re not prepared to pay in April.

To stay on track:

Our tax advisors can use our tax software to help calculate estimated payments for you.
Set aside a portion of every payment. A good rule of thumb is 25–30% of your gross income, depending on your tax bracket and state obligations.
Pay quarterly. Due dates typically fall in April, June, September, and January. Paying throughout the year prevents a large surprise at filing time.
Failing to make these payments can result not only in a big bill but also in penalties and the need to file an extension to buy time—something that’s easily avoidable with planning.

Hallows & Company is Here to Help

Avoiding a tax extension doesn’t require a miracle—it just takes preparation. By getting organized early, engaging with our tax professionals before the rush, and staying on top of your tax obligations throughout the year, you’ll be in a much better position when filing season arrives.

Plus, filing early comes with its own perks: faster refunds, reduced risk of identity theft, and less last-minute stress. Start now, and make the 2026 tax season your smoothest one yet. Contact anthony@hallowscompany.com to see how we can help.