Paying the IRS with Your Credit Card?

It’s Not Free

First of all, you need to realize that paying your taxes via credit card isn’t free. A convenience fee is charged when making your payment with your credit card. Now don’t think the convenience fee is just another way for the IRS to get your money -- the money doesn’t go to the IRS. When you make a credit card payment for your taxes, you do so through a credit card service provider. That service provider is the one who charges the fee.

How Much?

So how much does it cost to make your tax payment via credit card? The fee will vary depending on the amount of taxes you owe. In general, the average convenience fee is 2.49 to 3 percent of the amount owed to the IRS with a minimum convenience fee of $1.

Is it Worth It?

Whether or not it’s worth it for you to make your tax payment by credit card is really a personal decision. Some people don’t mind paying a couple of extra bucks for the convenience of using a credit card -- and of course the amount being paid makes a big difference.

For example, someone who owes $300 to the IRS would only incur a convenience fee of $7.47 if they chose a service provider charging 2.49 percent. On the other hand, if you owed $10,000 to the IRS, you’d incur a hefty fee of $249 for the privilege of using your credit card.

Make it Pay Off

There is a way to make the transaction pay off when using your credit card to pay your tax bill -- use a rewards card. By using a rewards card, you’ll be able to offset either some or all of the convenience fee charged by the credit card service provider. In fact, you might be able to get more back in rewards than you put out in the convenience fee depending on which reward credit card you use.

To apply for a rewards credit card, visit this rewards credit cards website.