Consider the IRS Payment Plan Before Paying Tax on Your Credit Card
Not everyone gets their money back when taxes are paid. If you owe the IRS and do not have the funds to pay for it, you can schedule a credit card payment. But in reality it would be better to develop a payment plan with the IRS.
Although the IRS does not accept credit card payments directly , it does allow credit card payments to be made through a “payment processor” . The Consumerist lists several considerations to consider before taking this route. The two most important of these are the interest rate and fees:
If you need time to pay off your tax debt, you should consider setting up a payment plan directly with the IRS before going to credit cards. Yes, interest will be charged on the unpaid balance as you make payments, but interest is often significantly less than the credit card’s average annual interest rate. Uncle Sam does not accept credit card payments directly, so you will have to use one of several authorized payment companies, each of which charge fees in excess of 2.35% on your tax bill. So, if you owe $ 2,000, you will pay $ 47 up front in addition to paying interest if you don’t pay your credit card on time.
There are good reasons why you want to pay taxes with a credit card, but make sure you know what you are getting into first. And Consumerist details this in the full post.
4 Things To Think About Before Paying Your Taxes With Your Credit Card | Consumer