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IRS Payment Options: Can You Pay The IRS With a Credit Card?

IRS Payment Options: Can You Pay The IRS With a Credit Card?

By on Oct 3, 2019 in IRS | 0 comments

Paying Your Tax Bill

Regardless of who you are in the United States, you must file your taxes to see if you must pay them. For people who earn under a threshold, they may get a refund. Everyone else has to pay federal tax, and sometimes state tax depending on your local laws.  

Not everyone wants to pay a check or sign up for a direct deposit, however, when doing the important filing. You may be researching to see if paying by credit card is an option. We can provide a simple answer: yes. You can use your credit card to pay the money owed on your tax return.

Optimizing Tax Payments

On the surface, paying by credit card has many benefits. The transactions will go through relatively faster, for one, and that will save the worry about if the IRS received your check. Some of the benefits would be earning reward points and travel miles or getting more time to make the payment and not get behind on taxes. Once you get behind, you will have to pay penalties. 

 Even so, you need to know the tradeoffs. E-filing has increased convenience a fair amount, and that may reduce the potential benefits of using a credit card. 

Using Credit Card Payments

All credit cards charge interest on payments if you don’t pay it before a certain date. If you are certain that you can meet the date, then interest is a lesser concern. The later the payment, the higher the interest can grow depending on your card terms. Always read the fine print so you know what you’re paying, literally. 

To use a credit card, you must prepare to go through a service provider, also called a payment processor. Each one charges a fee; with debit cards that charge is flat and usually under two dollars. Credit cards are a different story, service providers often charge by percentage. These include ones that are digital, including PayPal Mastercard. In short, you may find yourself paying a larger amount by credit than you would by debit in the long run. 

For rewards, you cannot just charge by credit card and hope that the large payment will accumulate points. Some travel and hotel cards will provide enough rewards to justify using the credit and service provider, but again you have to check the fine print. Since you only have one transaction or a series of them from an installation plan, the rewards may not justify the action. 

We recommend only using a credit card as a last resort if you need more time to make a payment. Or you should use it to not miss the deadline. Even so, keep in mind that the costs will accumulate over time if one is not careful, so always track how much you owe. An accountant or accounting service can also help with this when your finances become too complicated. 

Learn More About Payment Options From Success Tax Relief

At Success Tax Relief, we want to optimize how you pay your taxes. You deserve to know if you can use real estate expenses to get write-offs or if you qualify for a refund. We will help you determine if a credit card is the best way to go or if a direct deposit would be better in your case. 

Contact us today to learn more. We know all the ints and outs of the IRS. Our tax experts can also simplify complicated terminology.

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