Paying Taxes By Credit Card!

Updated: Jul 10, 2018




Those that are Self Employed or those not having enough withheld from their paycheck can pay their taxes by credit card.


First off – the main caveat - and a mandatory disclaimer: you should only consider paying taxes with a credit card if you pay your card balances in full every month. If you do that, this is the article for you and you can actually make a profit! So read on.


Benefits:

You don’t have to worry about filling out a form 1040-ES correctly, mailing a check in and making sure it does not get lost, or posted to the wrong account or year! Paying by credit card is a seamless process.


Some credit cards will get you more than the processing fee of 1.87%. There are cards that will even get you up to 3%!


Of course the biggest benefit is the fact that you can open a card with a large signup bonus such as Chase Ink Plus or AMEX Platinum Business and don't worry about the minimum spend requirements since Uncle Sam will take care of it - and the sign up bonus is TAX FREE!"


For Business tax payments the fees are tax deductible so effectively the fee rate is even less than 1.87%!

Fee table:

https://www.irs.gov/payments/pay-taxes-by-credit-or-debit-card


Choose your Payment Processor



Bottom line:

If you pay your card balances in full, paying your taxes with a credit card can result in a profit.

Oh, and by the way, this opportunity is another great reason (among many) why it’s better to owe on your taxes then receive a refund.




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