Paying Taxes Late vs. Paying with a Credit Card

Wondering ‘can you pay taxes with a credit card?’ Pondering if it’s a good idea at all? If you’re still totally undecided, then perhaps we can help. Here’s a handy little chart we assembled to weigh the various options when you either pay taxes with a credit card or just pay your taxes late.

Pay Taxes Late	Pay Taxes With a Credit Card
Accrue interest: 5%-10% per year Set up payment plan at own rate No rewards (frequent flyer miles, etc.) Agreement fees (up to $105) Late payment can mean fees from IRS Worries of an audit Automatic deduction If owe over $25,000, setting up a plan may be tough IRS could work with you	Accrue interest: 0% at first with new card, up to 25% later Payments are pre-determined Rewards possible (cash back, merchandise, etc.) Processing fees (2%-3% or flat rate) Late payment can mean instant interest raise or credit problem Ease of mind from not dealing with the IRS Automatic deduction If owe over $25,000, paying all at once may be impossible Credit card company may not be as flexible

As you can see, some of the points are fairly even, though if you pay taxes with a credit card it could be more costly in the long run. A lot of this depends on how much you’re paying to the IRS. The more you owe, the more likely you’re going to have to set up a payment plan.

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