Paying Your Taxes By Credit or Debit Card

March 19th, 2014 at 3:00 PM

No matter how you file your income tax return-by mailing a paper copy or electronically-you can pay your taxes using a major credit card or debit card online. Individuals can make these payments 24 hours a day, seven days a week, using certain cards, as long as they follow the proper procedure.

There are a few key advantages here:

1. one is to be able to delay paying your tax liability and avoiding any penalties if you do not have the current funds
2. and, you can participate in any credit card incentive programs, i.e., rewards & airline mileage

The disadvantage is the convenience fee charged by the service provider. This is a non-deductible fee and, then there is the possible interest charge. Taxpayers are informed of the non-deductible fee before the payment is authorized.

Two Companies, Official Payments Corporation and Link2Gov Corporation are authorized service providers for the purposes of accepting credit card, debit card, and BillMeLater payments from both electronic and paper filers. These companies have their own fee schedules and provide internet payment services. You can also use companies to charge taxes to American Express, Discover Card, MasterCard, or VISA, or BillMeLater account or pay using a debit card. If you file early, you can still wait until April 15th to make the online payment.

You can use these methods to pay any tax due on Form 1040, 1040A, or 1040EZ; individual estimated taxes; installment payments; and payments with extension of time to file.

Please be aware that some States accept credit card payments for State Income Taxes.

One additional note, before using any of these programs,make sure you do your research on the fees.