The IRS uses third-party payment processors for debit and credit card payments. It's safe and secure; your information is used only to process your payment. You can pay taxes with your credit card, but there are generally fees. At a minimum, there will be a payment processing fee that will range from 1% to 2%.
The IRS breaks down the fees for each payment processor here. If you want to pay the IRS with a credit card, you have a few options. The IRS works with three payment processors that accept credit card payments. The IRS website is a good place to pay your federal taxes, just follow the instructions on the site.
Paying your taxes with a credit card can be a lucrative way to earn points and miles as part of a big welcome offer or on a daily basis. In addition to payment processing fees, your credit card will charge you interest, unless you pay off your balance at the end of the billing cycle (an average of about 15.78% according to the most recent data from the Federal Reserve). This is especially important to consider when card issuers are tightening the requirements for new credit cards. That said, you'll usually only win with a tax-paying card when you're trying to qualify for a great welcome offer and, at the same time, earn rewards with daily rates.
There are a lot of reasons why you might want to pay your taxes with a credit card, but also several caveats. Since average credit card interest rates are around 16 percent, paying with a credit card could mean additional interest on top of your tax bill. You can pay off a personal loan in just a few months or up to three years, and sometimes even longer. Getting a personal loan can sometimes be easier than getting approved for a new credit card, something you should consider if you have a fair or average credit score.
If you use tax preparation software or a third-party website to file your taxes, you may accept payment by credit card. If you decide to use your credit card, consider requesting a cash refund or a high-return travel rewards card. When you pay your taxes with a credit card, write down when the first day of the new statement period begins on the card you want to use. And this tax season, you might be wondering if it's worth charging your taxes to a rewards credit card for cash refunds or points for travel while you pay your dues to Uncle Sam.
When they couldn't get enough money to pay their taxes, they decided to get a clear picture of how they were spending and learned to save more. Be sure to do the math to see if the money you save in interest is greater than what you have to pay in fees.