![]() ![]() Brolin, CEO of the CPA firm Powerful Accounting.Īlso, keep in mind that if you are late on a payment, your interest rate could skyrocket. “But you’d better make a plan to pay that credit card off within the year, so it really is 0%,” warns Dawn W. A year-long promotional credit card rate of 0% would likely make for a pretty sweet deal. Balance transfer offers to people with good credit typically include an interest-free period of a few months to more than a year. You could open a balance transfer credit card and transfer your tax payment to it. If you pay only minimum payments, this year’s tax bill could haunt you for a long time. When you shift your debt from Uncle Sam to your credit card issuer, you pay interest on whatever balance you carry. The IRS website has additional details on paying by credit card and e-filing.īalance transfer card buys you time, saves money Use ’s credit card calculators to figure your own example. $199.60 (1.99% convenience fee, then a 3% balance transfer fee)Īssumptions: Minimum payment of 1% of balance plus interest and an APR of 16%, and no further charges made on the card. ($4,079.60 financed, $4899.49 in interest)īalance transfer, 0% interest for 12 months What does it cost to pay your taxes with a credit card?Ģ48 monthly minimum payments, starting at $95.20 Let’s look at a hypothetical $4,000 tax bill and what it would cost to pay by credit card. Another way to pay is via digital wallet, an option for which regular debit or credit card fees would apply. You can also pay by credit card if you use tax preparation software that has e-file and e-pay built in, such as TurboTax, though there would still be a convenience fee charged by the payment processor. The convenience fee for paying 2021 taxes with credit cards ranges from 1.87% to 3.93% of the payment with a $2.50 to $3.95 minimum, depending on the third-party service you use. All of these options come with convenience fees. Tax laws forbid Uncle Sam from directly accepting credit cards, so the federal government farms out that option to three third-party services: PayUSAtax, Pay1040 and ACI Payments Inc. ![]() While a credit card can be a convenient way to cover the bill, make sure you understand all the ways it will cost you. Ill never use turbo tax again.Tax time can be stressful, particularly if you don’t have the money to pay what you owe.
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