Using a credit card to pay taxes

When you owe the IRS, it gives you plenty of ways to pay your tax bill. But can you pay taxes with a credit card? The answer is yes — as long as you pay through one of the IRS’s three approved payment processors.

A credit card isn’t your cheapest option: You’ll pay about a 2% fee per payment. However, paying with a credit card could come with specific benefits, too.

How to pay taxes with a credit card

1. Visit the IRS online to see the list of approved payment processors.
2. Select a processor, and visit its website.
3. Choose which tax filing status you’re paying for.
4. Enter your name, Social Security number, address and contact details.
5. Submit your billing details, including your credit card information and billing address.

Note that not all IRS taxes are eligible for payment by credit or debit card, and the IRS could limit how often you can make payments with a card. See the IRS’s Frequency Limit Table by Type of Tax Payment for more information.

Which card types are accepted by the IRS?

All of the major card networks — Visa, Mastercard, Discover and American Express — are accepted.

IRS credit card payment processors

The IRS offers three approved processors, each of which charge similar fees for credit card payments. Here are your options and their associated fees as of this writing.

What fees will I pay?

Here are the fees you’ll pay depending on the size of your tax bill.

When should you pay taxes with a credit card?

Before paying your taxes with a credit card, weigh the benefits and potential drawbacks.

Five reasons to pay taxes with a credit card

• You need time to pay off your taxes.
  If you face a big tax bite, you don’t have to pay it all right away. Putting it on your credit card is one way to pay it off over a longer period. But keep in mind that an IRS payment plan may be a better option in this case, as the interest rate tends to be lower.
• You want to reach a minimum spend for a signup bonus.
  The minimum spends on signup bonuses are usually a few thousand dollars. Reach yours more easily by paying your taxes with your credit card. Just make sure that the IRS’s processing fee doesn’t erase what you’ll gain from the bonus.
• You have a credit card with a long 0% intro APR period.
  If you’re paying your taxes using a 0% APR credit card, you can effectively defer your payments. Instead of putting your money toward taxes immediately, you can let it grow in a savings account, money market account or certificate of deposit.
• The rewards are worth more than the fee.
  In some cases, the rewards you’ll earn could be higher than the IRS processing fee, such as cash back or airline miles. Just be sure to do the math carefully beforehand, to make sure that the nearly 2% fee you’ll pay is actually worth any potential rewards — and that you’ll actually use the rewards soon enough to make paying the hefty fee upfront worth it.
• You want to level up or reach elite status.
  Paying with an airline branded credit card may enable you to reach a spending threshold that qualifies you for an elite status. For frequent travelers especially, the membership perks may be worth it, as elite status often includes lounge access, bonus miles, class upgrades and more.

Five reasons to avoid paying your taxes with a credit card

• You can’t afford to pay the fee.
  Simply put, if you can’t afford to pay the processing fee, then you probably shouldn’t use a credit card to pay for your taxes. If you’re running low on funds and are just looking for a way to break your taxes into gradual payments, consider setting up a payment plan with the IRS.
• You have trouble keeping up with payments.
  It’s rarely a good idea to rack up a lot of debt on your credit card without paying it off soon. If you plan on paying only the minimum toward your balance each month, consider passing on a credit card tax payment. You’ll quickly accumulate interest that could balloon your debt.
• You need to keep an eye on your credit score.
  Putting a big charge on your credit card will raise your credit utilization ratio, which could put a dent in your credit score. If you’re looking to open a line of credit soon — such as a mortgage, car loan or credit card — it may be wise to avoid more debt right now.
• You have high credit utilization ratio.
  If your tax payment isn’t a large sum compared to your available credit line, you shouldn’t have any problems. But if it takes a significant portion of your credit line, you could offset your credit utilization ratio. Keeping your utilization ratio above 30% can damage your credit score.
• You could max out your credit limit
  If using a credit card to pay your taxes causes you to hit the credit limit, this could hurt your credit score and incur penalties. Also, if you rely on that card for emergencies or rainy day spending, reaching your credit limit could cripple your ability to fund other necessary purchases.

Find the right credit card for you

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Name	Product	Filter values	Rewards	Purchase APR	Annual fee
Blue Cash Preferred® Card from American Express			6% on select US streaming services, 3% on transit and US gas stations, 6% at US supermarkets on up to $6,000 annually, then 1% after that and on all other purchases	0% intro for the first 12 months (then 13.99% to 23.99% variable)	$0 intro annual fee for the first year ($95 thereafter)	Apply now View details	Perfect for families: Get up to 6% on everyday purchases and a welcome offer worth $300. This heavy-hitter rewards card has uncontested value. Terms apply, see rates & fees	Compare	loading Fetching your data...
Blue Cash Everyday® Card from American Express			2% at US gas stations and select US department stores, 3% at US supermarkets on up to $6,000 per year, then 1% after that and on all other purchases	0% intro for the first 15 months (then 13.99% to 23.99% variable)	$0	Apply now View details	This everyday cashback card offers a higher than average welcome offer for no annual fee, letting you earn $200 after you spend $1,000 in the first 3 months. Terms apply, see rates & fees	Compare	loading Fetching your data...
Chase Freedom Unlimited®			5% cash back on travel purchased through Chase, 5% on Lyft, 3% on dining and drugstores and 1.5% on all other purchases	0% intro for the first 15 months (then 14.99% to 23.74% variable)	$0	Apply now View details	This solid 1.5% cashback card gets even better with the addition of up to 5% back in categories like travel, drug stores and dining.	Compare	loading Fetching your data...

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Bottom line

Make sure to weigh the benefits and drawbacks of using a credit card to pay for taxes to make sure it’s financially worth it. If you like the idea of racking up rewards, then compare rewards credit cards to find a welcome offer that pays off in the long run. Otherwise, find a credit card that can help you pay your taxes while meeting your financial needs.

Frequently asked questions

• Will I have to pay taxes when I file my return?

  No. You will file your tax return and make any tax payment separately.

• After I send my tax payment via credit card, will I receive confirmation from the IRS?

  No. However, you’ll receive email confirmation from the payment processor you used.

• Do I need to enter my Social Security number to pay my taxes with a credit card?

  Yes. You must submit your Social Security number so the IRS can credit your payment to you.

• Can I pay my taxes with a credit card by phone?

  Yes, you can pay your taxes with a credit card by calling any of the three IRS-approved providers — Pay USA Tax, Pay 1040 or Official Payments — at their specific phone numbers.

Pictures: Getty Images