Credit Cards » Credit Card Guides » Can You Pay Taxes With A Credit Card?
Advertiser Disclosure This website is an independent, advertising-supported comparison service. The product offers that appear on this site are from companies from which this website receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This website does not include all card companies or all card offers available in the marketplace. This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval. This allows us to maintain a full-time, editorial staff and work with finance experts you know and trust. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impacts any of the editorial content on The Smart Investor. While we work hard to provide accurate and up to date information that we think you will find relevant, The Smart Investor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof. Learn more about how we review products and read our advertiser disclosure for how we make money. All products are presented without warranty.

Can You Pay Taxes With A Credit Card?

Yes, the IRS allows you to pay taxes with a credit card. However, in most cases, it may not be a good idea. Here's why.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

Table Of Content

It's possible to pay taxes with a credit card, but in most chances, you may want to avoid it.

While this might seem like a convenient solution, it's essential to understand how it works and what are the pros and cons of paying taxes with a credit card before deciding whether it's the right choice for you.

Paying Your Taxes With a Credit Card: How Does It Work?

While you can pay your taxes with a credit card or a digital wallet, it's important to note that the IRS doesn't accept credit card payments directly.

Instead, you must use an authorized payment processor to make the payment. These payment processors charge a fee for their services, which is typically a percentage of the amount owed.

The fee varies depending on the processor, but it usually ranges from 1.5% to 4% of the amount owed. It's important to factor in this fee when deciding whether to use a credit card to pay your taxes.

Is It A Good Idea?

Whether paying your taxes with a credit card is a good idea depends on your individual financial situation and priorities. While paying taxes with a credit card can be a convenient option, it's important to weigh the potential benefits against the costs and potential risks.

Pros
Cons
Convenience
High Fees
Rewards Points or Miles
Credit Utilization
Reach Spending Milestone For Welcome Bonus
Penalties for Late Payments
Cash Flow Management

What Are The Main Reasons To Do It?

There are several reasons why someone might choose to pay their taxes with a credit card. Here are some of the main benefits of using a credit card to pay taxes:

  • Convenience: Paying taxes with a credit card can be more convenient than other payment methods. You can pay your taxes from the comfort of your own home, and you don't need to write and mail a check or visit a physical payment location.

  • Rewards Points or Miles: Using a credit card to pay your taxes can earn you rewards points or cashback, depending on your credit card rewards program. For example, if you have a credit card that earns 3% cashback on all purchases, you could earn $60 cashback on a $2,000 tax payment.

  • Reach Spending Milestone For Welcome Bonus: if you need to spend a specific amount to get a big bonus, paying taxes with your credit card can help you to achieve it quickly.
  • Cash Flow Management: If you don't have the cash on hand to pay your taxes, using a credit card can be a way to manage your cash flow. You can pay your taxes now and pay off the balance over time, potentially avoiding penalties and interest charges from the IRS.

Sign Up for

Our Newsletter

Join our community for the latest credit card comparison tips, expert insights,
and special member-only perks.

Sign Up for

Our Newsletter

Join our community for the latest credit card comparison tips, expert insights,
and special member-only perks.

Why It's Better To Avoid Paying Taxes With Your Card?

While paying taxes with a credit card can be a convenient option, there are several reasons why it may be better to avoid doing so. Here are some of the main reasons why you may want to avoid paying taxes with your card:

  • High Fees: This is the main and most important reason why you should avoid it. Payment processors typically charge a fee for processing credit card payments for taxes, and these fees can be higher than those for other payment methods. Depending on the payment processor and the type of credit card used, the fee can range from 1.5% to 4% of the payment amount. This fee can add up quickly, especially for larger tax payments.

  • Credit Utilization: Taxes are usually high compared to other expenses, so paying your taxes with a credit card can increase your credit utilization rate if you carry a balance from both to month. High credit utilization can negatively impact your credit score, as lenders view it as a sign of financial instability.

  • Penalties for Late Payments: If you're unable to pay off your credit card balance in full immediately, you may be subject to late payment penalties from both the credit card issuer and the IRS. This can make paying your taxes with a credit card an even more expensive option.

It's important to consider all of these factors before deciding whether to use a credit card to pay your taxes.

pay taxes with your credit card
You can pay taxes with your credit card, but it may be a good idea. (Photo by Surasak_Ch/Shutterstock)

Steps When Paying Your Taxes With a Credit Card

If you still want to do it, here are the recommended steps to make the process quickly and easy:

  1. Find a Payment Processor: First, you'll need to find a payment processor that accepts credit card payments for taxes. 

  2. Provide Tax Information: Once you've found a payment processor, you'll need to provide your tax information, such as your Social Security number, the tax year you're paying for, and the amount you owe.

  3. Choose Your Payment Method: Next, you'll need to choose your payment method. Most payment processors accept all major credit cards, including Visa, Mastercard, American Express, and Discover. Some may also accept debit cards, but it's essential to check with the payment processor beforehand.

  4. Pay Fees: When you use a credit card to pay your taxes, you'll be charged a processing fee by the payment processor. 

  5. Check Your Credit Limit: Make sure to check your credit limit before using your credit card to pay your taxes. If the amount you owe is more than your credit limit, your payment may be declined, and you could be subject to penalty fees.

What Are The Main Authorized Payment Processors?

Here are some of the most popular options when it comes to authorized payment processors. It's important to compare rates and fees before choosing a payment processor to ensure that you're getting the best deal.

  • PayUSAtax: PayUSAtax is an authorized payment processor that allows taxpayers to pay their federal income taxes, estimated taxes, and business taxes with a credit or debit card. They charge a fee of 1.85%.

  • Pay1040: Pay1040 is an authorized payment processor that accepts credit card payments for federal taxes, as well as state taxes in some states. They charge a fee of 1.87%.

  • ACI Payments, Inc.: ACI Payments is an authorized payment processor that accepts credit and debit card payments for federal taxes, state taxes, and local taxes in some jurisdictions. They charge a fee of 1.98%.

  • Vanco Payment Solutions: Vanco Payment Solutions is an authorized payment processor that accepts credit and debit card payments for federal and state taxes, as well as other government payments. 

It's important to note that the fees charged by payment processors can vary depending on the type of tax payment, the payment amount, and the type of credit card used. 

Top Offers

amex platinum

Rewards Plan:
1X – 5X 5X points on up to $500,000 spent on directly-booked airfare and flights and prepaid hotels booked through American Express Travel (per calendar year), 2X points on prepaid car rentals through American Express Travel and 1X points on all other purchases
Welcome Bonus:
80,000 points 80,000 Membership Rewards® points after you spend $8,000 on purchases on your new Card in your first 6 months of Card Membership

amex brilliant

Rewards Plan:
2X – 6X 6 Marriott Bonvoy points for each dollar of eligible purchases at hotels participating in the Marriott Bonvoy™ program, 3 points at Worldwide restaurants and on flights booked directly with airlines and 2 points on all other eligible purchases
Welcome Bonus:
95,000 points 95,000 Marriott Bonvoy bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership

Amex Delta SkyMiles Platinum card

Rewards Plan:
1X – 3X 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets and 1X Miles on all other eligible purchases
Welcome Bonus:
50,000 miles 50,000 bonus miles after you spend $3,000 in your first six months
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

Using a 0% APR Card to Pay Your Taxes: A Smart Move?

A 0% APR credit card can be helpful when paying your taxes. If you're able to pay off your credit card balance in full before the 0% APR period expires, you can avoid paying any interest charges on your tax payment. However, you'll still need to pay a payment processor fee.

This can make paying your taxes with a credit card a more affordable option, especially if you're unable to pay off the balance immediately. Many credit card issuers offer introductory 0% APR periods that can last anywhere from 6 to 21 months, depending on the card.

It's important to note that if you don't pay off your balance before the 0% APR period expires, you'll start accruing interest on your balance at the regular APR, which can be high. 

Other Ways To Pay Your Taxes

In addition to paying taxes with a credit card, there are several other ways to pay your taxes. Here are some of the most common options:

  • Direct Pay: Direct Pay is a free online payment option offered by the IRS. It allows taxpayers to pay their taxes directly from their bank account without any fees or third-party involvement.

  • Check or Money Order: You can also pay your taxes by mailing a check or money order to the IRS. You should make the check or money order payable to the United States Treasury and include your name, address, and Social Security number on the payment.

  • Cash: While cash payments are generally discouraged, the IRS does accept cash payments at certain authorized locations. You should check with the IRS to see if cash payments are accepted in your area.

  • Electronic Funds Withdrawal (EFW): EFW is a free electronic payment option that allows taxpayers to have their tax payment withdrawn directly from their bank account. You can choose to make a one-time payment or set up automatic payments for future tax payments.
Picture of Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Search
Best Cards Per CS
Top Offers

amex platinum

Rewards Plan:
1X – 5X 5X points on up to $500,000 spent on directly-booked airfare and flights and prepaid hotels booked through American Express Travel (per calendar year), 2X points on prepaid car rentals through American Express Travel and 1X points on all other purchases
Welcome Bonus:
80,000 points 80,000 Membership Rewards® points after you spend $8,000 on purchases on your new Card in your first 6 months of Card Membership

amex brilliant

Rewards Plan:
2X – 6X 6 Marriott Bonvoy points for each dollar of eligible purchases at hotels participating in the Marriott Bonvoy™ program, 3 points at Worldwide restaurants and on flights booked directly with airlines and 2 points on all other eligible purchases
Welcome Bonus:
95,000 points 95,000 Marriott Bonvoy bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership

Amex Delta SkyMiles Platinum card

Rewards Plan:
1X – 3X 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets and 1X Miles on all other eligible purchases
Welcome Bonus:
50,000 miles 50,000 bonus miles after you spend $3,000 in your first six months
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.
Top Offers From Our Partners

amex platinum

Rewards Plan:
1X – 5X 5X points on up to $500,000 spent on directly-booked airfare and flights and prepaid hotels booked through American Express Travel (per calendar year), 2X points on prepaid car rentals through American Express Travel and 1X points on all other purchases
Welcome Bonus:
80,000 points 80,000 Membership Rewards® points after you spend $8,000 on purchases on your new Card in your first 6 months of Card Membership

amex brilliant

Rewards Plan:
2X – 6X 6 Marriott Bonvoy points for each dollar of eligible purchases at hotels participating in the Marriott Bonvoy™ program, 3 points at Worldwide restaurants and on flights booked directly with airlines and 2 points on all other eligible purchases
Welcome Bonus:
95,000 points 95,000 Marriott Bonvoy bonus points after you use your new Card to make $6,000 in purchases within the first 6 months of Card Membership

Amex Delta SkyMiles Platinum card

Rewards Plan:
Up to 3x miles 3 miles per $1 spent on United purchases immediately after earning your $125 annual United purchase credit, 2 miles on all other travel and select streaming services, 1 mile on all other purchases
Welcome Bonus:
60,000 miles 60,000 bonus miles + 500 Premier qualifying points (PQP) after you spend $4,000 on purchases in the first 3 months your account is open.
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

#1 In credit Cards

Our Newsletter

Sign up to our newsletter for secret credit card tips, insider advice, and exclusive deals straight to your inbox

Start saving smarter with

Our Credit Card Newsletter

Sign up for our newsletter and gain access to expert advice,
insider knowledge, and exclusive offers