Credit Cards
January 11, 2021

Can You Pay Your Taxes With A Credit Card?

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It’s getting close to the time when millions of Americans must file their taxes. With so many recent changes to the tax laws over the last few years and the uncertainty as to how the Covid-19 stimulus payments will affect your taxes, there is a chance you could wind up having to pay the IRS this year instead of receiving a refund.

Of course, if you are self-employed or an entrepreneur, you may already be used to paying taxes on a quarterly basis. But what if you have to pay more than you expected this year? Many Americans were financially unprepared last year and the year before when they had to pay taxes. They were left scrambling to get together the funds needed to pay the IRS. Doing so also caused many Americans to ask, “Can you pay your taxes with a credit card?”

Just Because the Answer is Yes…

You’ll be glad to know that the answer is “yes,” which means you don’t have to worry so much about having the money in the bank to pay for a large tax bill. However, just because you can pay your taxes with a credit card doesn’t necessarily mean you should. Consider the following details about paying taxes with a credit card to help you decide if doing so is the best option for you.

If you plan on paying your taxes with a credit card, you will need to choose a card payment processor that works with the IRS. The choices are PayUSAtax, Pay1040, and ACI Payments, Inc. Each card payment processor will charge a fee for using their service to pay your taxes. The fees will vary and depend on whether you are paying with a debit card or a credit card. The card payment processors can also charge you a fee based on the total amount you charge.

Do The Research

Before choosing any particular card payment processor, you should compare fees to know what you are likely to be charged and avoid any unexpected fee surprises. The fees you pay can be pretty substantial if you choose the wrong card payment processor to pay your taxes. You can review a credit card fee comparison at the IRS website.

You should also note that tax payments ver $100,000 will need to be processed over the phone. It is also possible to make several credit card payments to pay your taxes rather than a single payment, but you’ll need to check each card payment processor for details on how many payments are allowed. You’ll also pay fees each time, so this isn’t always the most feasible course of action.

To pay state taxes with a credit card, you’ll need to look up how to do so from your state’s government website. Each state may have slightly different requirements. In most cases, you can use a third-party payment processor at This website will also charge you a fee.

Financial experts always recommend avoiding credit card usage whenever possible, or, at the very least, only charging something when you can pay off the balance very quickly. If you have the funds available to pay your taxes, you may still opt to use your credit card if it will garner you rewards, such as miles or points towards purchases. Sometimes the rewards you receive can be worth more than the fees you’ll pay. If you can pay off the balance quickly before accruing ample interest, it could be a smart choice.

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