Can Taxes Be Paid With a Credit Card?

Can Taxes Be Paid With a Credit Card?

Besides death, paying taxes is listed as one of life’s two inevitabilities. To help make it easy and convenient to pay your dues, Uncle Sam has provided a variety of payment options. You don’t have to deposit a check at a specific bank branch, and yes, you can even use your credit card.

This option, you will be happy to hear, is available for the payment of virtually any kind of federal tax. Depending on the state you reside or do business in, you can even pay some state taxes using this method. However, you should be aware that this convenience doesn’t come for free.

Some kinds of tax cannot be paid via credit card. For certain kinds of taxes, there is a limit to the number of times you can use the credit card option in a year.

Types of Taxes You Can Pay With Your Credit Card

Property taxes

Whether or not you will be able to pay property tax using your credit card will depend on where the property is located. 

While some counties and cities will allow you to use this method, others don’t. Some of those who accept credit card payments provide an online portal to facilitate this.

State Taxes

Some states allow residents to pay both their business taxes and personal income taxes via credit card. The IRS has authorized three payment processors for credit card tax deposits; ACI Payments, Inc, Pay1040, and payUSAtax. 

Each of these has different payment processing fees and accepts different types of payment methods. All of them accept American Express, Visa, and MasterCard payments, but Pay1040 doesn’t accept PayPal.

The credit card option for paying employers’ federal taxes is unavailable for business owners. You have only one option for depositing this and other payroll-related taxes (including Medicare and social security); electronic funds transfer (EFTPS).


Paying your taxes online with your credit card gives you the luxury of being able to complete the transaction from the comfort of your office or home. You don’t have to make a trip to your bank branch. And you will also get instant confirmation if your payment was successful.

Avoid Fees 

Using your credit card for your taxes can potentially help you avoid incurring penalties for late payment of your tax. If you’re a business owner facing a tight deadline with your cash held up in delayed customer payments, you can take advantage of your credit card limit and then square off your books when the checks finally come through.

Cash Back Returns  

Besides the convenience, the prospect of earning cashback rewards should entice you to try settling with Uncle Sam via credit card. You can get up to two percent of what you paid in tax back by using this method. However, this benefit may not amount to much in light of the processing fee. You may want to consider alternatives such as a payday loan from an online lender.

This is why you need to look keenly at the processing fee different merchants charge. If your chosen vendor charges 1.87 percent and your cash back rewards are pegged at two percent, you will have gained a 0.13 percent advantage from using your credit card. Small annual tax payments may feel like minute gains, but for a business paying thousands of dollars in accrued tax, that small benefit can add up to a tidy sum.

A Welcoming Bonus

Another way you can benefit from using your credit card is by using your tax payment to trigger a welcome bonus. Many providers offer a welcome bonus for customers taking up new credit cards. But to trigger this bonus, you have to meet a minimum spending threshold.

If your purchases haven’t reached that magic number, you can make a tax payment to get there. Considering your tax transaction’s processing fee, you still need to do the math to see if this benefit is worth pursuing.

Introductory Rate

Taking advantage of the zero percent introductory APR offered by many suppliers is another good reason to consider going the credit card route for your taxes. Being a new credit cardholder, you can take advantage of the 15-month APR period to settle your taxes without fearing interest. But as you do so, you still need to consider the credit card processing charges.

Cost Of The Benefits

While paying your taxes using a credit card is very much possible and offers a number of benefits, there is also a cost element attached to it. You need to consider the impact these accruing fees will have on your budget and on your margins if you’re a business owner.

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About Dequiana Jackson

Dequiana Jackson, Founder of Inspired Marketing, Inc., helps overachieving women entrepreneurs conquer limiting beliefs and create marketing plans that grow their businesses. This includes one-on-one marketing plan development, digital product creation, web design and content marketing. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog,

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