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Can I pay my federal taxes with a credit card?
The IRS can’t directly accept credit card payments due to tax laws.
However, they can accept payments through a third-party processor. For example, online tax preparation companies are third-party processors since they are designated by a merchant to handle transactions for merchant acquiring banks. They can then assist you in making your credit card payment towards your tax bill to the IRS.
Here’s what you need to be prepared for when you plan on using the credit route.
There are no flat fees when using your credit card.
You could get some cash back.
Choosing to pay your tax bill using your credit card can be difficult. Although, when some taxpayers don’t have a substantial amount of taxes, paying your tax bill using your credit card could be convenient. Let’s say you want to earn some cash back. You could use your new credit card if you’re guaranteed a sign-up bonus. On top of that, you could earn points, rewards, and frequent flier miles. One recommendation is using a card with 0% APR which does not have interest.
Let’s not forget, there are other options.
Sometimes, it’s better to take your time. You could choose to pay directly to the IRS using direct pay, Electronic Funds Withdrawal (during e-filing), Same-day wire, Check or money order, and Cash.
If you’re losing your mind over how you’re going to pay your tax bill, utilize the IRS installment agreement payment plan which we can also provide to you to file your 2017 tax return.
Short-term payment plan (120 days or less) $0 $0 Plus penalties, interest and paying by card.
Long-term Installment Agreement (More than 120 days) $149 setup fee (low income: $43 setup fee that may be reimbursed if certain conditions are met) $225 Plus penalties, interest and paying by card.
You can choose to break up your payments within 120 days and pay the minimum installment of each month until you pay off your tax liability. PriorTax assists customers in arranging a payment plan so they can finally pay off their taxes.
Regardless of your payment method, there can be drawbacks.
The bottom line is, if you are looking to avoid paying extra, this option may not be right for you. On the other hand, if you’re responsible with your credit, go for it! File your 2017 tax return if you know you might have a tax liability. Now’s the time since October 15; the e-file and extension deadline is approaching.
This entry was posted on Monday, September 10th, 2018 at 7:21 pm	and is filed under Tax and Life Changes, Tax Deadlines, Tax Tips and Tricks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.