By Hunt Demarest, CPA, Host of Business by the Numbers Podcast
If you’re reading this, more likely—you’ve officially survived another Tax Day. Cue the confetti… or the antacids. Whether you owed the IRS, got a refund, or punted with an extension, you’re in one of three very distinct camps. And yes, each one comes with its own set of consequences, next steps, and opportunities to either pat yourself on the back—or promise to do better next year. This isn’t about shaming where you landed; it’s about using that info to make smarter moves going forward that benefit your auto repair shop.
So let’s unpack what each group should be doing right now to stay out of trouble and get ahead for next year…
Team Extension: You Filed Late—Now Don’t Stall Out
Let’s start with the procrastinators. Look, I get it. Life in the shop is hectic. Maybe you were busy keeping customers happy, chasing down parts, or trying to find good techs (good luck!). Maybe your books weren’t exactly up-to-date. Whatever the reason—even I filed an extension this year.
But here’s the thing—an extension only gives you more time to file, not more time to pay. If you owed and didn’t pay by April 15, the IRS is already tacking on penalties and interest—kind of like late fees from your parts supplier, but way less forgiving.
Moral of the story: if you know you owe, pay something now, even if your paperwork’s not perfect yet. And when you do file, don’t rush so fast that you miss valuable deductions like equipment purchases, retirement contributions, or even those uniforms you’re buying for your team.
LISTEN TO MY PODCAST EPISODE 167, FOR MORE ON THIS TOPIC.
Team “I Owe Uncle Sam”: You’re Actually Winning (Sort Of)
If you filed and owed the IRS, you might be feeling a little punched in the gut right now. But honestly? That usually means you had a good year. You made money. And that’s the whole point of running your shop, right?
Now, if that tax bill knocked you off your creeper, that’s your sign you need better tax planning. The IRS expects you to pay as you go—not drop a giant lump sum once a year. That’s what quarterly estimated taxes are for.
Skipping estimates is like ignoring that engine light—you’re just begging for more expensive problems later (read: penalties and interest). Let’s avoid that mess next year by setting up a better system now.
Team Refund: Hold the High-Fives
You got a refund? Awesome… sort of. Just remember: it’s not a bonus, it’s your own money coming back to you. (And no, the government isn’t paying you interest for holding onto it all year.)
A big refund usually means you overpaid. For some shop owners, that feels “safe.” But if you’re getting $20K, $30K, or more back every year, that’s not good tax strategy—that’s bad cash flow management.
Think about it this way: would you pay your parts supplier extra all year long, just so you could get a fat check later? Didn’t think so. Your business runs better when you control your cash—not the IRS.
Bottom Line: The Clock’s Already Ticking
No matter what pit crew you’re in, the best time to start planning for next year is right now. Don’t wait until you’re hanging Christmas lights to realize your taxes are a mess—especially if your income is growing or fluctuates with the seasons.
Set your quarterly estimates, meet with your accountant, and get real about where your cash is going. Because running a successful shop isn’t just about fixing cars—it’s about managing money, too.
Remember: Tax planning isn’t a 12-day sprint in April. It’s a 12-month marathon. Stay ahead of it, and next year’s Tax Day will be a victory lap, not a pit stop disaster.
