Paying Your Taxes with a Credit Card
Tax season is upon us, and time is running out to get those completed returns to the IRS.
For those of us who actually have to make a payment, as opposed to simply receiving a refund, that April 15 deadline couldn’t seem any closer.
And with all the recent economic turmoil, I’m sure more taxpayers out there are having trouble coming up with the necessary funds to pay Uncle Sam.
So what can you do if you don’t have the money to pay your taxes in full? Well, one option is charging it on the old plastic.
A service called OfficialPayments.com, which works with Visa, MasterCard, Discover, and American Express, allows consumers to pay their taxes with a credit card.
The company charges a 2.49% “convenience fee” to complete the transaction, which can obviously get expensive rather quickly.
For example, if you make a $5,000 tax payment, the fee would be $124.50; the grand total is charged onto your credit card of your choice.
The balance must then be paid off according to the terms set with your chosen credit card, so if you’re subject to finance charges, you better pay it off when it’s due.
You may have received offers like this from your individual credit card issuers who advertise this method of tax payment as convenient or flexible.
They’ll probably also mention that you can earn rewards faster, or that payments can be made until midnight of the return due date.
These claims may be true, but realize it comes at a cost, and if you’re unable to pay off the balance by the statement due date, you’ll end up paying a lot more in the long run than if you were to choose a traditional method like debit or direct deposit.
So read the fine print before you consider using a credit card to pay your taxes!
Related Topics:
- Avoid Late Credit Card Payments
- Charitable Donations Using Credit Card Points Aren’t Tax Deductible
- Make Large Purchases Early in Your Billing Cycle
- Five Credit Card Fees You Can Avoid
- Consider Existing Credit Card Offers
Posted Under: Credit Help and Tips