All CPA companies are aware of what happens in April. However, the same cannot be said for September. It is in September when the main difficulties arise. Although the deadline of September 15 is not as well-known as that of April, for CPA firms with partnerships and S-corp returns, it can be as hard. The main reason is that most companies go through this month without some of their key employees because they are still having a break from the work they did in spring and the companies did not prepare enough resources for handling the hectic season.
What is Due on 15th September?
September 15 is the extended deadline for the two types of entities which are required to submit the form 7004 on March 15 as per the calendar year which is listed as follows:
Form 1065 – US Return of Partnership Income
Form 1120-S – US Tax Return for S Corporation
Both of these forms are required to be submitted for information purposes because the entity does not have to pay any federal taxes; however, income, deductions and credits are transferred to the owners via the Schedule K-1, which is sent to partners and shareholders on the same date. Once all partners receive their K-1s, they will file their own returns with the help of firms who have to finish them on October 15.
This is also the date for the Quarter three estimated taxes. It means doing two different work processes simultaneously with the same set of people.
The likelihood of penalties is serious and applies to each owner.
The non-filing penalties of Form 1065 and Form 1120-S are not based on a percentage of tax due since the entities usually have $0 taxable income at the entity level. Rather, the IRS is collecting penalties for each partner or shareholder for every month or part of a month that the return was late up to 12 months under Sections 6698 and 6699 of the IRC. For the 2026 filing season, this per owner monthly penalty has increased to about $255, and it is adjusted yearly for inflation.
Thus, a five-partner partnership that files three months late will incur nearly $3,825 in penalties for the return that might not owe any federal tax. That certainly is the type of calculation that clients call you regarding.
The reason why September affects companies more severely than April
Either way, September is considered to be preferable as it comes with fewer returns, and no individual 1040 volumes. However, the reality is that many things may work against companies:
- Staff members do not recover after the spring period. Most companies do not provide proper recovery time before work in September, and all employees who had extended returns work with all the unused vacations and tasks from the previous tax season.
- K-1-based dependencies create delays for the workflow, as partnership returns cannot be completed until the basis, allocations, and special items related to the partners are ready, considering that it may take a long time to wait for one K-1 issued to a partner.
- The conflicts between processes take place. The work for preparing individual and entity-level returns and calculations for the Q3 estimate involves a different number of people.
- The issue is that while the accounting profession needs to face the existing talent shortage, now, on top of it, there is a second peak. The profession already undergoes the issues of fewer new CPAs coming into the profession, the wave of retirements, and the existing staff accepting calls from headhunters offering better opportunities. The matter is that adding another busy time-frame on top of the already stretched resources harms the quality of reviews, turnarounds, and retention.
As a result, the firms either deal with their tired members of the teams and agree to more errors in reviews or refuse to accept new advisory projects because they cannot accommodate any new work in their schedules.
The problem lies not in competence but in capacity
Let us be clear: the firms that experience difficulty every September do not struggle due to lack of knowledge among their staff on how to file 1065 and 1120-S forms.
The challenge lies not in the knowledge gap, but in the shortage of trained personnel to process the necessary documentation in a short time frame. This is a problem of capacity, not of competence, and that calls for a capacity solution.
Checklist for CPA Firms in September
Arrange this in your planner starting in early August, not in the first week of September.
1. Determine a fixed collection deadline for documents.
Give your clients a date that does not change - usually the last week of August – for outstanding basis schedules, K-1s received from upstream entities, and final trial balances. Every day beyond that date shortens the time you have available for your review.
2. Maintain a K-1 log.
Maintain a list of all returns related to partnerships and S-corporations by: entity name, item not received, K-1 received from upstream entities, target completion date, and person responsible for preparation or review. Using a shared log (not discussion via email) means you will either be able to track everything successfully or fail.
3. Conduct a staffing capacity audit before the busy time, not during it.
Count the number of unfulfilled submissions against available preparer hours for the next month. If they don’t match, it would mean you need to find additional help in time to have people prepared.
4. Establish the extension-vs-file-now triage policies.
It is essential to understand that not every return must be perfect by 15th September, if additional extensions are unavailable for that entity type - determine which returns are indeed pressing deadlines and which can still be processed.
5. Set the client communication schedule.
The first reminder message should be sent at the beginning of August, the second – at the end of the month, which should inform you already about the deadlines and any progress made during the last week before September 8.
6. Preserve the review processes.
Tight deadlines are exactly the moments when the review risks get minimized. Always approach any K-1 allocation and basis calculation with the help of the second person.
7. Keep in mind the Q3 estimate preparation occurs simultaneously.
Make sure to separate this task from the entity return preparation. Make sure to separate this task from the entity return preparation.
A realistic scenario
Let us analyze a composite instance composed of different models typical for medium-sized and small firms. Imagine a 12-person regional firm that has to file 85 partnerships and S-Corp returns in August combining it with its normal workload in bookkeeping and consulting services.
A capacity audit conducted at the beginning of August indicates that it is not realistic to expect this workload to be managed by three preparers. Each of the preparers seems to be capable of doing about five straightforward returns. This means that the firm could expect to complete only 60 returns by September 15 leaving 25 returns unfiled or filed with lots of mistakes.
Normally, companies in this region adopt either of two methods. They will file most tax forms using the existing workforce working for free. In such cases, the legislation in question will see a significant increase in revisions of previously filed applications and receive a notification about incurring penalties due to missed submission dates.
Alternatively, companies in this position may outsource various tax preparation activities to some offshore company in mid-August. This will allow them to file simpler applications quickly and keep their professionals busy with complex applications. In this case, all 85 tax returns will be filed on time and the quality of the review will be maintained.
Finding Solutions: enhancing capabilities pre-deadline
After reviewing the capacity evaluation, companies generally choose among several alternatives, including requesting current employees to take on additional work (which facilitates quick work overload and employee loss), employing temporary domestic workers (which is difficult and costly due to the ongoing accountant crisis), putting more resources into automation systems to accelerate routine tasks or hiring outsourced companies that provide tax preparation without increasing the number of employees.
- It's elastic. You scale up for the September push and scale back down afterward, without the cost and disruption of a hiring-and-layoff cycle for a six-week spike.
- It's faster to deploy than domestic hiring. In a market where qualified seasonal preparers are hard to find at any price, an established offshore team can often be productive on routine entity return prep within days to a few weeks, rather than the months it can take to source, interview, and onboard a domestic hire.
- It targets the right work. The highest-leverage use of offshore tax preparation support during a crunch like this is routine, well-defined return preparation - data entry, schedule preparation, basis tracking, first-pass K-1 allocations - freeing your CPAs and senior staff to focus on final review, client-facing judgment calls, and the returns that genuinely need partner-level attention.
- It reduces per-owner penalty risk. Every return that moves through the pipeline on schedule because you had the staff to move it is a client who isn't calling you about a $255-per-partner-per-month penalty notice.
At Xconcile, we have designed our outsourced tax preparation and offshore staffing services for tackling this particular problem with seasonal capacity. Rather than hiring temporary workers each August, firms using Xconcile’s services can bring onboard trained offshore tax preparers who fit seamlessly into the work processes and systems of their existing infrastructure.
With the help of offshore tax preparers, companies can effectively address the surge in demands during peak periods without incurring additional permanent costs. If you are exploring alternatives for sourcing temporary workforce this September, our Hire Tax Preparation Staff page discusses how our staffing solutions function, while the Outsourced Tax Preparation page describes our services in full.
Conclusion
September 15 does not necessarily have to represent a smaller, tougher version of April. The companies that are able to manage it well are not those with the most skilled professionals but those who performed the calculations of capacity in August, established firm deadlines with their clients, and introduced flexible support before the peak appeared, be it the internal workforce mobilization or hiring outsourced and offshore tax services to help address the peak.
If your company is approaching September already having a problem with insufficient staff from the spring, working overtime is not an option. Rather, you need to upscale your capacity, which can be done only by having the conversation in August, rather than on September 14.
