Asked by: Robyn Langecker
personal finance personal taxes

Can you pay your income taxes with a credit card?

Last Updated: 5th February, 2020

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Yes, you can pay federal taxes with a credit card. The IRS gave consumers the right to pay with a credit card under the Taxpayer Relief Act of 1997. Most states will allow you to pay state income tax with a credit card, too.

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In this way, how much does the IRS charge to pay with credit card?

The convenience fee for paying 2017 taxes with credit cards ranges from 1.87 to 2 percent of the payment, depending on the third-party service used. You can also pay by credit card if you use tax preparation software that has e-file and e-pay built in, though the fees tend to be higher.

Secondly, what forms of payment does the IRS accept? The IRS offers various options for making monthly payments:

  • Direct debit from your bank account,
  • Payroll deduction from your employer,
  • Payment by EFTPS,
  • Payment by credit card via phone or Internet,
  • Payment via check or money order, or.
  • Payment with cash at a retail partner.

In this regard, does it make sense to pay taxes with credit card?

Your ongoing rewards are higher than the processing fee But, of course, there are exceptions. If your credit card rewards are higher than that processing fee, paying taxes with a credit card to earn rewards could make sense, Allen says.

How do I pay the IRS with a credit card?

You'll Pay Fees The IRS doesn't accept credit card payments directly; instead, it has licensed several payment processors to accept credit card payments on its behalf. These companies charge an additional fee on top of your tax bill — usually around 2%. As you can see, Pay1040.com has the lowest fee: 1.87%.

Related Question Answers

Merrill Ondiviela

Professional

Is it worth it to pay taxes with a credit card?

It's not free to pay taxes with a credit card. At a minimum, you'll pay a convenience charge of 1.87% through one of the IRS's approved payment processors. But this can be worth it if it means unlocking a big welcome bonus or racking up points worth more than the fees you'll pay.

Ivone Ekkhardt

Professional

How much does it cost to pay federal taxes by credit card?

All payment processors charge a processing fee to let you pay your taxes with a credit card. For the 2018 tax season, processing fees range from 1.87% to 1.99% of your tax bill or a minimum fee of $2.50 to $2.69, whichever is higher.

Sharmin Farga

Professional

Why does the IRS check your credit?

Prior to 2018, a taxpayer's credit report would indicate if the IRS had filed a Notice of Federal Tax Lien because the taxpayer has failed to pay taxes. This lien serves as a legal claim against the taxpayer's property and gives the IRS priority above all other creditors.

Xiaoxue Zahid

Explainer

What happens if you owe Paypal money?

What happens if you owe PayPal money? If you owe Paypal money, for whatever reasons, they will attempt to collect their fees either by accessing your Paypal balance or other incoming deposits to your PP account. This can also mean accessing your bank account associated with your PP account.

Ksenia Aller

Explainer

Does IRS take payments?

File Form 9465, Installment Agreement Request, to set up installment payments with the IRS. The IRS must allow you to make payments on your overdue taxes if: you owe $10,000 or less, or. you prove you can't pay the amount you owe now, or.

Abdelrahman Schuller

Explainer

Do credit card companies report to IRS?

Internal Revenue Code section 6050W(c)(2) requires that banks and merchant services must report annual gross payments processed by credit cards and/or debit cards to the IRS, as well as to the merchants who received them. Credit card payments are reported using Form 1099-K.

Liqin Corzan

Pundit

How do I make a payment to the IRS online?

7 Options for Sending IRS Payments—It's Easier Than You Might Think
  1. Pay Online Using DirectPay.
  2. Pay Online From Your Bank Account Using EFTPS.gov.
  3. Pay Online by Debit or Credit Card.
  4. Mail a Check or Money Order.
  5. Pay in Person.
  6. Set up an Electronic Funds Withdrawal.
  7. Ask Your Bank About a Wire Service.

Chunping Tapadas

Pundit

Is it worth paying property taxes with credit card?

You can often use your credit card to pay income taxes or property taxes. They count as purchases, so you would receive the miles or points charged. However, this move rarely makes sense, because you will almost always be charged a high fee for using a credit card for these expenses.

Evan Papon

Pundit

Should I pay taxes or credit card debt first?

It looks like paying off the credit cards is the right move here. Once you've paid off the first one, you have more money to put toward the next, and once you've paid off both interest charging cards, you should have a lot to put toward the IRS debt. You absolutely are saving enough to pay down your debt, if slowly.

Basharat Privat

Pundit

Can I pay my mortgage with a credit card?

Mortgage lenders don't accept credit card payments directly. If you have a Mastercard or Discover card, you may be able to pay your mortgage through a payment processing service called Plastiq for a 2.5% fee.

Leota Obyedkov

Pundit

Is pay1040 com legit?

Convenient – PAY1040.com is safe, secure and easy-to-use, giving taxpayers the flexibility of paying federal taxes when, where and how they want. Paperless – No need to bother with checks or stamps – by paying tax balances electronically, your customers can take advantage of a convenient paperless process.

Kisha Chakour

Teacher

Are official payments safe?

Yes. Official Payments is strongly committed to protecting the privacy of individuals who use our Web site. Additionally, we are a licensee of the TRUSTe organization. For more information on our privacy and security measures, visit our Privacy Policy.

Boubakar Potrony

Teacher

Can I pay my taxes with two credit cards?

You won't be able to split the payment between two credit cards using the TurboTax system during e-file. But, you can when you pay directly to the IRS. After you e-file, you can use the website below to make two separate payments with a credit card directly to the IRS.

Wallace Mehand

Teacher

Can I make an IRS payment in person?

The quickest, easiest way to make a tax payment is online. If you prefer to pay in cash, the IRS offers a way for you to pay your taxes at a participating retail store.

Nonna Hervalejo

Teacher

What happens if you owe taxes and cant pay?

Don't panic. If you cannot pay the full amount of taxes you owe, you should still file your return by the deadline and pay as much as you can to avoid penalties and interest. However, the agency is unable to waive interest charges which accrue on unpaid tax bills.

Dongping Conduto

Reviewer

Do IRS payment plans affect your credit?

Agreeing to pay a tax bill by an installment agreement with the IRS doesn't affect your credit since installment agreements are not reported to the credit reporting agencies, which means it won't affect your credit scores like paying over time with a credit card would.

Latonya Belino

Reviewer

Where do I send my IRS tax payment?

Form 1040 addresses for taxpayers living within the 50 states
If you live in And you ARE NOT enclosing a payment use this address
Florida, Louisiana, Mississippi, Texas Department of the Treasury Internal Revenue Service Austin, TX 73301-0002

Mickie Diekena

Reviewer

Can the IRS put me in jail?

The IRS will not put you in jail for not being able to pay your taxes if you file your return. The following actions will land you in jail for one to three years: Tax Evasion: Any action taken to evade the assessment of a tax, such as filing a fraudulent return, can land you in prison for 5 years.

Laurynas Ichaso

Reviewer

Where do I pay quarterly taxes?

To submit your payment, you have a few options including:
  • Sign up for the Electronic Federal Tax Payment System, or EFTPS. The system allows anyone to pay taxes they owe.
  • Pay online via the IRS at www.irs.gov/payments.
  • Pay using debit or credit card.
  • Remit a check or money order using estimated tax payment voucher.