The Second Deadline

Back in April, a lot of you did the smart thing. You looked at a pile of K-1s that hadn't shown up, a bookkeeper who was three weeks behind, and a brokerage that kept sending "corrected" 1099s, and you filed Form 4868. Extension granted. Problem postponed.

Then you forgot about it. Which is exactly what the extension is designed to let you do.

Here's what nobody tells you on the way out the door in April. An extension gives you more time to file. It doesn't give you more time to pay. But it quietly does something else that almost nobody uses: it moves a handful of money deadlines along with it. Deadlines that let you put real dollars to work against your 2025 tax bill, even though 2025 has been over for nine months.

That second deadline lands on Thursday, October 15th. It's 17 days away.

Most extension filers treat October 15th like a paperwork date. Hand the CPA whatever's missing, sign the e-file authorization, move on. That's leaving money on the table, and in some cases it's leaving a penalty on the table too. So today I'm going to walk you through what's still open, what it's worth, and the exact order to work it in before the door shuts.

Quick note before we start. I'm not your CPA and this isn't tax advice for your specific return. It's the checklist I'd want in my hand before the call with mine.

The tax code ties a bunch of elections and contributions to "the due date of the return, including extensions." When you filed that extension in April, you didn't just buy time for paperwork. You pushed every one of those tied deadlines from April 15th to October 15th.

Think of it like a restaurant kitchen that stays open late for one table. The kitchen is technically closed for 2025. But because you asked for the late seating, a few burners are still on. Once you file, or once October 15th hits, whichever comes first, the burners go off for good.

That "whichever comes first" part matters. If you file early in October with money still sitting in checking that could've gone into a retirement plan, you just closed your own window. Sequence matters here. Money moves first, filing second.

This is the big one, and it's still completely available if you had self-employment income last year.

A SEP-IRA lets you make an employer contribution of up to 25 percent of compensation, which for a sole proprietor or single-member LLC works out to roughly 20 percent of net self-employment earnings after the self-employment tax adjustment. The 2025 ceiling is 70,000 dollars.

And here's the part that surprises people. You don't need to have opened the SEP last year. You can open it today, at any major brokerage, in about 20 minutes, and still make a contribution that counts for 2025, as long as the money lands by your extended due date.

Let's put a real number on it. Say your 2025 net profit on Schedule C was 140,000 dollars. The self-employment tax adjustment knocks about 9,900 dollars off the base. Twenty percent of what's left is roughly 26,000 dollars. If your top federal bracket is 24 percent, that contribution cuts your federal bill by about 6,200 dollars, before counting whatever your state gives you.

Six grand. For a 20 minute account opening and a transfer you were probably going to make eventually anyway.

Two things to watch. First, if you have W-2 employees, a SEP generally has to cover eligible employees at the same percentage you give yourself. That's not a dealbreaker, but it's a conversation, not a click. Second, if you're an S corp owner, the 25 percent is calculated on your W-2 wages from the corporation, not your distributions. People who paid themselves a skinny salary to save on payroll tax find out here that they also shrank their contribution room. Know which camp you're in before you do the math.

If you already had a solo 401(k) set up during 2025, you likely made your employee deferral elections by year end. What you may not have done is fund the employer side, the profit-sharing contribution. That piece can still go in up to your extended due date.

And since the SECURE Act changed the rules a few years back, you can also establish a brand new profit-sharing plan after year end, up to the extended deadline, and make employer contributions for the prior year. The employee deferral side of a new plan is what's generally off the table now for 2025.

So for most people who didn't have a plan in place last year, the SEP is the simpler move today. If you did have a solo 401(k), check your plan's balance against what the employer contribution could've been. It's common to find somebody who deferred 23,500 dollars in 2025, felt great about it, and never touched the other 20 percent.

This one isn't about saving money. It's about not bleeding it.

Two IRA repairs ride the extended due date.

Excess contributions. If you put money into a Roth IRA for 2025 and your income ended up over the limit, or you simply contributed more than you were allowed, that excess gets hit with a 6 percent excise tax for every year it stays in the account. Every year. It compounds like a bad habit. If you pull the excess out, along with whatever it earned, by October 15th, the excise tax goes away. Miss the date and you're paying it on the 2025 return and every return after until you fix it.

For 2025, the Roth phase-out ran from 150,000 to 165,000 dollars of modified AGI for single filers and 236,000 to 246,000 for married couples filing jointly. If you had a big year, check this before you check anything else.

Recharacterizations. You can also treat a 2025 IRA contribution as if it went into the other type. Roth money gets recharacterized as traditional, or the reverse, with a clean trustee-to-trustee transfer. This is often the fix for the over-the-limit problem above, and it's the step people doing a backdoor Roth need when something got sequenced wrong. One note, since people mix these up: you can recharacterize a contribution. You can't undo a Roth conversion anymore. That door closed in 2018.

Call the custodian. Ask for the "return of excess contribution" or the "recharacterization" form by name. They'll calculate the earnings piece for you.

Here's where the extension crowd actually has an edge over the April crowd.

The big tax bill signed last July dropped several new deductions into the 2025 tax year, and a lot of early filers either missed them or claimed them sloppily while the forms were still settling. You get to do it with nine extra months of guidance behind you.

Run through these with your preparer:

Tips and overtime. Up to 25,000 dollars of qualified tips, and up to 12,500 dollars of qualified overtime premium pay, or 25,000 on a joint return. Both phase out as modified AGI climbs past 150,000 single or 300,000 joint. If you or a spouse is an hourly earner who worked a lot of overtime, this is real money.

Car loan interest. Up to 10,000 dollars of interest on a loan for a new vehicle with final assembly in the United States, purchased during 2025, for personal use. The phase-out starts at 100,000 dollars of modified AGI for single filers and 200,000 for joint.

The senior deduction. An extra 6,000 dollars per person age 65 or older, stacked on top of the regular additional standard deduction, phasing out above 75,000 single and 150,000 joint.

The bigger SALT cap. The state and local tax deduction limit jumped to 40,000 dollars for 2025, phasing down for income above 500,000 dollars. For people in high-tax states who've been taking the standard deduction on autopilot since 2018, itemizing might be back in the conversation.

Full expensing for business equipment. 100 percent bonus depreciation came back for qualifying property acquired and placed in service after January 19, 2025. If you bought equipment, vehicles over the weight threshold, or certain improvements last year, make sure your preparer knows the acquisition dates.

None of these are exotic. They're just new, and new is where preparers make mistakes on a deadline.

My shortcut here is to take the draft return, strip out the Social Security numbers and account numbers, and run it through Galaxy.ai with a simple prompt: here's a 2025 draft return, here's my situation in three sentences, list any 2025 deductions or credits that look like they apply but aren't claimed. It isn't a substitute for your CPA. It's a second pair of eyes that makes your CPA call 20 minutes shorter and a lot more pointed.

If you owe money on that 2025 return and you didn't pay it with the extension, the clock has been running since April 15th.

Two separate charges are stacking. Interest, which the IRS sets at the federal short-term rate plus three points, adjusted quarterly and compounded daily. And the failure-to-pay penalty, half a percent of the unpaid tax per month, capped at 25 percent.

Those are annoying. They aren't the one that should scare you.

The failure-to-file penalty is 5 percent of the unpaid tax per month, also capped at 25 percent. That penalty has been switched off since April because you filed an extension. It switches back on October 16th. It's ten times the failure-to-pay rate, and it applies whether or not you have the cash.

So the rule is simple. File by October 15th even if you can't pay. Filing without paying costs you half a percent a month. Not filing costs you five. If the balance is going to be ugly, file on time and set up a payment plan online the same day. The IRS short-term installment options are genuinely easy now, and the setup takes about the time it takes to make coffee.

Here's the part I'd actually care about most if I were you.

October 15th closes 2025. But you're also sitting 94 days from the end of 2026, and a few of the most valuable 2026 moves have a harder deadline than October 15th ever did.

If you want to make employee deferrals into a solo 401(k) for 2026, the cleanest path is to have the plan established and your deferral election documented before December 31st. If you're an S corp owner thinking about raising your salary to create more retirement room, that has to run through payroll before year end. And if you ran up against the 2025 Roth limit, you already know your 2026 income is likely headed the same direction, which means the backdoor setup needs to happen with clean sequencing, not in a panic next April.

Put differently, the extension filer who closes 2025 on October 15th and walks away has missed the point. The one who closes 2025 and builds the 2026 calendar in the same sitting is playing a different game.

Here's how I keep that calendar from living in my head. I built a small scenario in Make.com that runs off a single sheet with every tax date I care about: the four estimated payment dates, December 31st for deferral elections, April 15th, October 15th, and my state's version of each. Fourteen days before each date, it sends me one message with the date, what's due, and a link to the folder where the supporting documents live. It took about an hour to build and I haven't missed a date since.

And when I do get on the call with my CPA, I record it with Fathom. Not for posterity. For the action items. Every tax call ends with three or four "we should look at that" comments that evaporate by the weekend. The summary lands in my inbox before I've closed the laptop, and I forward the action list straight into the same sheet.

If you only remember one section, remember this one.

This week. Get your final 2025 net profit number from your bookkeeper or your draft return. Open the SEP or confirm the solo 401(k) employer room. Check every IRA contribution you made for 2025 against the income limits.

Next week. Fund the SEP or employer contribution. Submit any excess removal or recharacterization requests. Custodians get slammed the week of the deadline and some need five to seven business days, so don't leave this for the 14th.

By October 13th. Walk your preparer through the new 2025 deductions and confirm what's being claimed. Get the final balance due.

By October 15th. File. Pay what you can. Set up a payment plan for the rest if needed.

By October 31st. Lock in the 2026 decisions: solo 401(k) setup, salary changes, and your estimated payment plan for January.

That's it. Five checkpoints. Most people will hit one of them.

You didn't file an extension because you're disorganized. Most of the people I know who file extensions have complicated lives with a lot of moving parts, and moving parts make paperwork late. That's fine.

But the extension isn't just a delay. It's a second chance at the year. A few thousand dollars sitting in checking in September can still be told to go work for last year's return, and very few tools in the tax code let you reach back in time like that.

Use it. Then shut the door on 2025 for good and start running 2026 on a schedule instead of a scramble.

Want the whole checklist in one place?

I built The Second Deadline Kit for exactly this window. It includes the October 15th checklist in the order above, a SEP contribution calculator that handles the self-employment tax adjustment for you, a one-page IRA repair decision tree for excess contributions and recharacterizations, the 2025 new-deduction scan with the exact AI prompt I use on a draft return, a CPA email template that gets you straight answers in one reply, and the 2026 year-end setup calendar.

Reply to this email with the word EXTENSION and I'll send it over.

About the room.

The Grid Inner Circle is where these issues stop being reading material and start being done. Members bring their actual numbers, we walk through them on live calls, and the full system library lives in one place so you're not hunting through old emails for last month's worksheet.

Monthly membership is 29 dollars. But the one I'd point you to is the lifetime seat at 499 dollars. One payment, no renewals, every future system and call included for as long as the Circle runs. It's the founding price, and it goes away once the room fills out.

If you've been saving these emails "for later," the lifetime seat is how later actually becomes a date on your calendar.

Reply with the word LIFETIME and I'll send you the details and the link.

See you Wednesday.

Alex Rivera, Wealth Architect at Wealth Grid