Trump’s admiration is allowing Americans to delay paying their taxes and he hopes to send stimulus checks directly to the people as the nation grapples with the coronavirus pandemic.
Secretary of the Treasury Steve Mnuchin is encouraging Americans who can file their taxes on or before April 15 to do so so they don’t lose their tax refunds.
But they indicate that if Americans owe money to the IRS, they can defer up to $ 1 million for individuals and $ 10 million for corporations without interest or penalties for 90 days.
Taxpayers will have to file their tax returns before April 15. But they won’t have to pay their taxes for an additional 90 days. During that time, individuals and corporations will not be subject to interest or penalties.
“All they have to do is file their taxes,” Mnuchin said.
The Treasury secretary said President Donald Trump had approved the final details of the program, including its expansion to include the potential to allow taxpayers to keep $ 300 billion in the economy for now. Last week, Mnuchin had estimated deferred payments to be $ 200 billion.
Mnuchin had said the deferral would apply to everyone except the “super rich,” but he did not explain how the deferral would work. The IRS has not yet released specific guidelines for the program.
The IRS is using the authority under Trump’s declaration of national emergency to take the step of approving the 90-day delay in payment. Mnuchin encouraged taxpayers to keep filing because many of them will receive refunds that they can use to pay bills during the economic downturn.
As of February 21, the IRS had issued more than 37.4 million refunds averaging $ 3,125.
Mark Zandi, chief economist at Moody’s Analytics, said the tax deferral program is only an emergency program, but that it should help buffer the economy during a period of severe stress.
“Individuals and small businesses need cash right now,” Zandi said. “Anything that slows them down from having to send a check to the IRS will allow them to pay for their groceries and make their mortgage payments and pay other bills.”
Under normal filing procedures, taxpayers must pay their obligations before April 15, although they can get a six-month extension to file the full return.
Mnuchin, who spoke to reporters at the White House, said that as part of a stimulus plan that is being negotiated with Congress, the administration is considering ways to send checks to Americans to help ease the impact of the loss of jobs due to layoffs in restaurants and the tourism industry.
“Americans need cash now, and the president wants to give cash now and I mean now in the next two weeks,” Mnuchin said.