Paying Taxes by Credit Card to IRS

Is it possible to pay your taxes due to the IRS with a credit card?

You can generally pay income taxes due and estimated tax payments with a credit card. Individuals can make these payments 24 hours a day, seven days a week, using certain types of credit cards.

It does not matter if you e-file your tax return or mail a tax return to pay by credit card. Taxpayers must use a third party. There are several third party companies, Official Payments Corporation and Link2Gov Corporation that are authorized by the IRS.

 

Paying Taxes by Credit Card to IRS

These are authorized service providers for purposes of accepting credit card charges from both electronic and paper tax filers. However, remember that these payment providers might charge an additional fee which is usually a percentage of the tax paid by credit card.

 

Using Credit Card to Pay Taxes

You can use American Express, Discover Card, MasterCard, or VISA to pay taxes. A taxpayer may even be able to earn credit card points on the purchases.  Often, even partial payments may be made, although there is a limit of two payments per type of tax (or per quarter for estimated tax). Even if you file your taxes early, you can still wait until April to make the credit card charge which could help save you money in an interest expense.

Taxpayers also have the option of making credit card payments for the balance due on Form 1040, 1040A, or 1040EZ through tax software such at TurboTax and H and R Block.It is important to remember that if you do not pay the full amount by credit card, you may be liable for penalties and interest

 

You can e-file (or mail a paper return) and pay the following types of taxes by credit card over the phone or by using the Internet:

  • Current and past due Form 1040 series balance due
  • Form 4868 (automatic extension)
  • Form 1040-ES (estimated tax), and
  • Form 1040 advanced payment of a determined deficiency.

For credit card payment of any projected balance due on an automatic extension to file, service providers can be used to pay any taxes due.

 

Form 1040-ES or Form 4868

If you use the credit card method to pay your estimated taxes or any projected balance due on the automatic extension to file your return, you have the added advantage of not being required to file a paper Form 1040-ES or Form 4868. (Taxpayers can no longer file automatic extensions by phone.)

For any credit card payments, the authorization date of the credit card charge is considered the payment date for purposes of determining whether the payment was timely. Credit card payments cannot be cancelled once they are paid to the IRS. 

One advantage of using the credit card method, aside from the obvious one of being able to delay paying your tax liability, is that if you participate in any credit card incentive program, such as airline mileage, you will earn points by charging your taxes. A disadvantage is the convenience fee charged by service providers.

This nondeductible fee is in addition to any interest your credit card issuer will charge. Taxpayers are informed of the convenience fee amount before the payment is authorized.