Is Paying Your Taxes With a Credit Card the Right Move?

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

Paying a tax bill with a credit card can help you earn rewards, but there’s a cost to it. Find out if you should pay your taxes with a card. 

Now that you’ve filed your taxes, hopefully your tax bill has been paid for the year. But, if you still owe money to the IRS either for your 2022 taxes or because you must pay estimated taxes in 2023, you can arrange to have the funds transferred directly from your bank account or you can send a check. Neither of these options come with a fee. Or, you can pay your taxes with a credit card — which does come with a fee.

Since you’ll have to pay to use your cards to cover your tax bill, you’ll need to think carefully about whether this approach makes sense for you. There are a few situations where it may be a good option even though you’ll incur some added costs to do it.

Does paying your taxes with a credit card make sense for you?

There are several different services that allow you to pay your taxes with a credit card, but each one charges you for the privilege. Depending on which service you opt to use, you would get hit with a fee between 1.85% and 1.98%.

There are minimum fees imposed as well, although those minimum fees are either $2.50 or $2.69, so chances are your fees would be higher than that amount anyway.

Paying these fees can add a lot to your cost, but that doesn’t mean it’s never worth using your card to pay your tax bill. In fact, if you still owe taxes for 2022, using your card could be a good option for dealing with that issue. See, you will owe penalties and late fees if you didn’t pay your taxes by the deadline. And while the IRS offers payment plans, these don’t allow you to skip out on interest charges — and some of these plans have a fee as well.

If you can qualify for a 0% APR credit card that charges you 0% on purchases, you may be able to avoid the added costs the IRS imposes — but you’ll want to make sure you can fully pay off the tax debt you’ve put on your card before the end of the promotional rate, otherwise you’ll get stuck paying at the high interest rate most of these cards offer.

If you aren’t late on your taxes but you have to pay estimates or are planning ahead for a 2023 tax bill, you may also want to consider using a credit card if you can get rewards equal to or above the fees you’re paying (such as with a card offering 2% cash back) and if you use the tax payment to help you qualify for a new cardmember bonus with a minimum spending requirement.

How to pay your taxes with a credit card

If you decide to pay your taxes with a credit card, you can do so using one of the three processors the IRS has approved. It’s simple to visit the IRS website, pick between the services, and input your tax and credit card information. Just be sure you pay off your credit card bill quickly so you don’t get hit with interest on a big tax charge.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2024

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More