Don’t rush. Your K1s and retirement plans might be worth the wait.

Why High Earners and Real Estate Investors Should Pause Before Filing

You have a tidy desk. Your receipts are scanned. Your bookkeeper says you are ready to go.

So why did I ask my team to hold your return?

Because for High Net Worth individuals, especially those in real estate syndications or private medical practices, filing in February often feels productive but it can quietly cost you money.

Here is what I hear every February:

Q: My books are done and my banker wants my return for a loan. Why wait?​
​A: Your Schedule K1 probably has not arrived yet.

If you are a passive investor in apartments, strip malls, or medical office buildings, partnerships have until March 15 to send your K1. File early and you risk amending your return later, costing time, money, and headaches with your bank.

The fix: File an extension. It is automatic, safe, and gives your partnerships time to do their math correctly.

Q: But I owe taxes. Won’t I get penalized if I extend?​
​A: No, as long as you pay your estimated taxes by April 15. Think of an extension as more time to push paper, not more time to pay.

Scenario:

• File early: Miss a K1, amend, $1,500 accounting fees.
• File extension: Pay estimate, receive all K1s, file complete return, less stress, less cost.

Q: I don’t have K1s. Should I file now?​
​A: Maybe, but check your retirement first.

SEP IRAs, Solo 401k plans, and Cash Balance plans can be funded up to October 15 if you extend. Filing in February locks you into an April 15 contribution deadline, which can strain cash flow. Extending gives flexibility and keeps more money working for you later in the year.

The February Rule

File in February IF:

• You expect a refund
• You have no partnership investments
• You don’t plan to fund a retirement plan

File an Extension IF:

• You are a high earner (37 percent bracket)
• You invest in real estate that issues K1s
• You own a practice and utilize Cash Balance or Defined Benefit plans
• You want your CPA to have all the pieces before filing

One Last Thought:​
Filing an extension does not mean you are late. In the High Net Worth world, February filers usually have simpler finances. If your finances are more complex, waiting might be the smarter move.

Plan smart. File strategically. Save stress and money.