At a press conference held today, U.S. Treasury Secretary Steven Mnuchin announced the following while at the White House:
Americans who owe taxes can defer their payment for 90 days, interest and penalty free, up to $1 million. Corporations that owe $10 million or less are afforded the same 90 day window. He said the IRS would not extend the tax-filing deadline, as previously suggested. Mnuchin said Americans should still file their taxes now if they want to get a tax refund.
IRS will waive interest and penalty charges for 90 days for Americans who owe up to $1 million in taxes. The tax return filing deadline will remain April 15. "If you owe a payment to the IRS, you can defer up to $1 million as an individual — and the reason we are doing $1 million is because that covers pass-throughs and businesses — and $10 million for corporations, interest-free and penalty-free for 90 days. All you have to do is file your taxes," Mnuchin said. "We encourage those Americans who can file later taxes to continue to file their taxes because you will get tax refunds and we don't want you to lose out. Many people do this electronically which is easy for them and the IRS," he said.
The IRS is so far processing tax returns and paying out refunds with no apparent delay, though IRS Commissioner Charles Rettig said employees who are eligible to work remotely should do so. Some individual states, including California and Connecticut, have extended state tax return filing deadlines for residents. Learn more here.
Here are a few reasons to file your taxes now:
1. File now if you want your refunds. As of now, the IRS will continue to process tax returns and pay out refunds as usual. If you've been looking forward to getting a check from the government, you'll need to file your return to get it. The IRS recommends e-filing and choosing direct deposit to get your refund as soon as possible. Nine in 10 taxpayers who use this method and are owed a refund typically get theirs within 21 days of submitting their return.
2. You won't be totally off the hook for your tax bill. Typically, if you don't pay any tax you owe by the tax filing deadline — April 15 — the IRS will charge you a penalty and interest on your outstanding balance. Mnuchin announced on Tuesday that individual taxpayers could defer up to $1 million in tax payments for 90 days. Deferment is just postponement; barring any additional government relief, you'll have to pay your balance when the deferment period is up. The upside is that you won't be charged interest or penalties during this time.
3. If you don't file now, you'll have to do it later. The IRS is not extending the tax deadline, so if you don't file by April 15, you may still be charged a separate penalty for not filing. If you can't begin to think about gathering all your tax documents and sitting down to file — or contacting an accountant to do it for you — consider requesting an extension as soon as possible. But while an extension is appealing to the procrastinator in all of us, if your tax situation is simple enough to prepare and file online in a couple of hours, it's probably a good idea to get it over with.
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