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Here's What Happens When You Pay Your Taxes With a Credit Card

By Christy Bieber – Apr 13, 2019 at 6:15PM

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Thinking about paying your taxes with a credit card? Here's how the process works.

When you owe money to the Internal Revenue Service (IRS), you have a few options for making your tax payment. You can use IRS Direct Pay to have your payment withdrawn from your bank account for free; you can send in a check to the IRS; or you could pay with a debit card or a credit card. If you pay with a debit card or credit card, you'll need to use one of three approved payment processing services and pay either a flat fee (using a debit card) or a percentage of the transaction amount (using a credit card). 

I'd always sent in a check to the IRS in prior years, but for my 2018 tax payment I decided to pay via credit card. If you're considering also paying with a card, here's how the process works. 

A woman paying taxes with a credit card

Image Source: Getty Images

Paying your taxes with a credit card

To start the process of paying taxes with a credit card, choose from one of three payment processors:

Each of these payment processors allows payments online or via phone. I chose because the fee was the lowest. Still, 1.87% is a big amount that can substantially add to your tax bill -- so it's usually best to avoid charging your taxes unless you have a credit card that gives you enough cash back or rewards to cover it. In my case, I have a card that gives 2.62% cash back, so it was worth paying the fee because I earned 0.75% cash back after the fee was paid. 

When you've selected your payment processing service, next you'll choose the type of tax payment you want to make. You have many options, including paying both business and personal taxes. For example, you can make payments due based on your Form 1040, or on amended returns, or if you're making a payment along with a request for an automatic tax extension. You can even make a payment for more obscure tax situations, such as when you owe a trust recovery penalty. It's important to select the right type of payment so the IRS can process it properly.  

In my case, I had to make two separate payments: one for the taxes I owed for 2018 and another for estimated taxes for 2019. This meant I had to process two transactions. The good thing is that going through the process is easy.

The steps to paying with your card

Once you've chosen the correct form, you'll need to go through a few more steps to process your payment. This includes:

  • Choosing what year you're submitting the payment for.
  • Inputting the exact payment amount (you'll need to know how much you owe so you can pay the correct balance).
  • Specifying whether you're filing taxes from within or outside the U.S.
  • Inputting personal information including Social Security number, date of birth, and address. If you file a joint return, you will have to input both your own information and your spouse's info. In my case, my husband was the primary taxpayer, so I had to put in his Social Security number and other details in along with mine. 
  • Inputting your credit card information.

The transaction processes quickly, and the money is automatically sent to the IRS. You will receive a receipt from the payment processor you used. I saved mine as a PDF with my tax forms to prove that I'd made my payment on time. Remember, this is just for the payment -- you still have to file all required tax forms separately with the IRS. 

Confirming your payment

Once I'd submitted my tax forms, I wanted to make sure that everything processed properly. has a simple web form you can fill out to confirm the IRS has correctly applied payments made through the processor's service. I had to input my husband's Social Security number, the last four digits of our credit card number, and the amount of our payment to receive confirmation.

You can also sign into your IRS account, or create an account if you don't already have one. It takes about 10 to 15 minutes to create an account, and you'll need to confirm your identity by providing a credit card number or a number from another account, such as your mortgage or student loan. 

When I signed into my IRS account just five days after using to process my payment, the IRS was already showing that both payments had been received and correctly applied for my 2018 tax bill and my 2019 estimates. 

Should you pay your taxes with a credit card?

There are really only a few reasons why you may want to pay taxes with your credit card.

One reason is to earn rewards, which was my motivation. But for many people, this doesn't make a lot of sense because the fees are so high. You need a really good cash-back rewards card, and you need to owe a lot of money in order for this to be worthwhile. 

Another reason to pay with a card is if you don't have the money to pay off your tax bill when it's due. But the interest cost and fees of paying with a card may be higher than the interest and late payment penalty charged by the IRS, so be sure to do the math. If you have a card that gives generous rewards or cash back to offset the processing fee and it has a 0% promotional rate, paying with your card makes mathematical sense. Otherwise, you should look into IRS payment plans to see if they're more affordable. 

You shouldn't pay with a card just for convenience because there's no reason to incur a fee of 1.87% or more when you could have money directly debited from your bank account for free. 

Now you know the process of paying taxes with a credit card

If it does make sense to pay your taxes with a credit card, now you know the basic process. To pay your taxes with your card, simply choose the most affordable third-party payment processor, input your tax information, and confirm a few days later that your payment has been properly received.

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