Why Pay Taxes with a Credit Card?
Before diving into the process, consider these potential benefits:
- Rewards and Cashback: Earn rewards points, miles, or cashback on large tax payments
- Convenience: Make quick and easy online payments
- Cash Flow Management: Spread the cost over time if you're short on cash
- Meeting Spending Requirements: Help reach credit card bonus spending thresholds
Payment Processing Options
The IRS doesn't directly accept credit card payments but works with three authorized payment processors:
Processing Fees
Each processor charges a convenience fee between 1.87% and 1.99% of the payment amount:
| Processor | Fee Percentage | Fee on $5,000 Payment |
|---|---|---|
| Pay1040 | 1.87% | $93.50 |
| PayUSAtax | 1.96% | $98.00 |
| Official Payments | 1.99% | $99.50 |
Pro tip: Calculate whether your rewards rate exceeds the processing fee before proceeding with a credit card payment.
How to Make the Payment
Step 1: Choose a Payment Processor
Compare the fees and select the processor with the best rate.
Step 2: Complete the Payment Process
- Visit the processor's website
- Select "Make a Payment"
- Choose your tax form type
- Enter your personal information (SSN or EIN)
- Specify payment amount
- Provide credit card details
- Review and submit
- Save confirmation number
Phone Payment Option
All processors accept payments by phone:
Pay1040: 1-888-729-1040
PayUSAtax: 1-844-729-8298
Official Payments: 1-888-872-9829
Important Considerations
Credit Impact
- Large tax payments can increase your credit utilization ratio
- This may temporarily impact your credit score
Financial Considerations
- Interest charges apply if you don't pay the full credit card balance
- Credit card interest rates typically exceed IRS payment plan rates
- Consider an IRS installment agreement instead
- Business owners may deduct processing fees as a business expense
- Personal tax payment processing fees are not tax-deductible
Alternative Payment Methods
If credit card fees seem too high, consider:
- Direct debit from your bank account (free)
- Electronic Federal Tax Payment System (EFTPS)
- Check or money order
- IRS payment plan
Record Keeping
- Keep payment confirmation numbers
- Verify the transaction on your credit card statement
- Maintain documentation for your tax records
For more information on paying taxes with a credit card, visit the IRS website.