This story is part of Taxes 2023, CNET’s coverage of the best tax software, tax tips and everything else you need to file your return and track your refund.
If you owe the IRS money this tax season, you could use the right credit card to make your tax payment. Though paying your taxes with a credit card may not be the best choice for all scenarios, especially if you’re in the red or don’t expect to be able to pay off your balance soon, there are circumstances that can make it lucrative.
If you’re facing a lot of debt already or your credit is not in good standing, working out a payment plan with the IRS might be a better, lower-interest option. Even the best credit cards for bad credit don’t have the perks to make this maneuver worthwhile. But if you have good credit, you can use a card that earns you some combination of rewards, a welcome bonus and interest-free financing to make the transaction advantageous.
Keep in mind that the IRS and state websites typically charge nearly 2% to process credit card transactions, while online tax software services may charge as high as 2.49%. So you’ll want the right mix of credit card benefits -- plus no annual fee -- to neutralize processing fees and reap the benefits.
Here’s what you need to know if you’re considering using a credit card this tax season.
How do you pay taxes with a credit card?
You can make your payment directly on the IRS website, with your choice of three different third-party payment processors for a credit or debit card. Each processor charges about 2%, but it can be more expensive if you use a credit card to file your taxes using an online software service like TurboTax or H&R Block.
The fees are broken down in this chart on the IRS website. You can pay directly by selecting a “make a payment” under the payment processor of your choosing from this page.
Read more
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- 2023 Tax Season: When Is the Filing Deadline? When Do I Get My Refund?
You can also pay by calling the payment processors directly using the numbers listed on the IRS site. The same fees will apply.
The IRS says your transaction is safe and secure, and your information will be used solely to make your payment. And it notes that the agency doesn’t see any part of the card service fee, which you can deduct for business taxes. If you’re worried about security, though, using a virtual credit card can offer additional privacy.
There are some limits on the number of credit card payments you can make with the IRS per year -- you’re limited to two in most cases, and you can use two different credit cards for each payment if you want. If you own a business or are self-employed, you can also use your credit card to make estimated tax payments throughout the year.
The benefits of paying taxes with a credit card
If you’re going to pay your taxes with a credit card, you can rack up some bonus rewards points or get cash back. Maybe you’ve recently opened up a card with a signup bonus or welcome offer that requires you to put a certain amount on your card within a specific time frame. Or maybe you have a card that offers benefits once you reach a particular spending threshold, like the X1 Card. Charging your taxes could help you get there.
In general, you’ll want to make sure your credit card’s rewards return rate percentage exceeds the payment processor fee percentage. For example, if you’re paying with a credit card using Pay1040, the fee is 1.87%. It’s only worth charging your taxes if you’re using a card with a reward rate that’s at least 2%.
For some, the primary benefit of using a credit card to pay your taxes will be the extra few weeks you’ll have to scrape together a payment. But be careful. Note your statement close date and how long you’ll have to pay the balance off in full -- because there are some major risks in using a credit card to pay your taxes.
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Best credit cards for paying your taxes
If you do decide to pay your taxes with a credit card, below are our picks and partner offers for the cards with the best combinations of rewards rates, welcome bonuses and introductory 0% APR offers to mitigate the burden of putting your taxes on a credit card.
The 2% flat cash-rewards rate essentially negates the IRS processor fees, and if you put at least $500 worth of taxes on this card within the first three months of account opening, you’ll earn the $200 cash rewards welcome bonus.
See our full review of the Wells Fargo Active Cash Card for more details.
- Intro Balance Transfer APR
- 0% intro APR for 15 months from account opening on qualifying balance transfers
- Intro Purchase APR
- 0% intro APR for 15 months from account opening
- Regular APR
- 20.24%, 25.24%, or 29.99% Variable APR
- Balance Transfer Fee
- up to 5%, min: $5
The 2% flat cash-rewards rate essentially negates the IRS processor fees, and if you put at least $500 worth of taxes on this card within the first three months of account opening, you’ll earn the $200 cash rewards welcome bonus.
See our full review of the Wells Fargo Active Cash Card for more details.
- Intro Balance Transfer APR
- 0% intro APR for 15 months from account opening on qualifying balance transfers
- Intro Purchase APR
- 0% intro APR for 15 months from account opening
- Regular APR
- 20.24%, 25.24%, or 29.99% Variable APR
- Balance Transfer Fee
- up to 5%, min: $5
The Discover it® Cash Back* offers the Unlimited Cashback Match™ as a welcome bonus, meaning in addition to the 1% you earn when you make a transaction with this card, Discover will match your total cash back at the end of your first year. This nets you a total of 2% to cover the processor fees -- and then you can also take advantage of the 0% introductory APR on purchases for 15 months (17.24% to 28.24% variable APR thereafter).
See our full review of the Discover it Cash Back for more details.
- Intro Balance Transfer APR
- 0% for 15 months
- Intro Purchase APR
- 0% for 15 months
- Regular APR
- 17.24% – 28.24% Variable APR
- Balance Transfer Fee
- 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
The Discover it® Cash Back* offers the Unlimited Cashback Match™ as a welcome bonus, meaning in addition to the 1% you earn when you make a transaction with this card, Discover will match your total cash back at the end of your first year. This nets you a total of 2% to cover the processor fees -- and then you can also take advantage of the 0% introductory APR on purchases for 15 months (17.24% to 28.24% variable APR thereafter).
See our full review of the Discover it Cash Back for more details.
- Intro Balance Transfer APR
- 0% for 15 months
- Intro Purchase APR
- 0% for 15 months
- Regular APR
- 17.24% – 28.24% Variable APR
- Balance Transfer Fee
- 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
BankAmericard® credit card
The BankAmericard® credit card is a great choice if you’re looking for a card with a long 0% introductory APR for purchases and balance transfers. Cardholders will get 18 billing cycles to pay off new purchases or a transferred balance before the standard APR of 16.24% to 26.24% variable applies. Balance transfers must be completed within 60 days of opening the account.
While the card offers no rewards, which means you’ll have no buffer between you and any processing fees, it will give you one of the longest time periods on the market to pay off your taxes.
- Intro Balance Transfer APR
- 0% Intro APR for 18 billing cycles for any BTs made in the first 60 days. A 3% fee applies.
- Intro Purchase APR
- 0% Intro APR for 18 billing cycles for purchases
- Regular APR
- 16.24% – 26.24% Variable APR on purchases and balance transfers
- Balance Transfer Fee
- 3% of the amount of each transaction
The BankAmericard® credit card is a great choice if you’re looking for a card with a long 0% introductory APR for purchases and balance transfers. Cardholders will get 18 billing cycles to pay off new purchases or a transferred balance before the standard APR of 16.24% to 26.24% variable applies. Balance transfers must be completed within 60 days of opening the account.
While the card offers no rewards, which means you’ll have no buffer between you and any processing fees, it will give you one of the longest time periods on the market to pay off your taxes.
- Intro Balance Transfer APR
- 0% Intro APR for 18 billing cycles for any BTs made in the first 60 days. A 3% fee applies.
- Intro Purchase APR
- 0% Intro APR for 18 billing cycles for purchases
- Regular APR
- 16.24% – 26.24% Variable APR on purchases and balance transfers
- Balance Transfer Fee
- 3% of the amount of each transaction
The Citi Double Cash® Card is another option that gives you the opportunity to earn enough cash-back rewards to meet or exceed the processor fees. You earn 1% when you make the transaction, and another 1% when you make the corresponding payments.
See our full review of the Citi Double Cash Card for more details.
- Intro Balance Transfer APR
- 0% intro for 18 months on Balance Transfers
- Intro Purchase APR
- N/A
- Regular APR
- 19.24% – 29.24% (Variable)
- Balance Transfer Fee
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.
The Citi Double Cash® Card is another option that gives you the opportunity to earn enough cash-back rewards to meet or exceed the processor fees. You earn 1% when you make the transaction, and another 1% when you make the corresponding payments.
See our full review of the Citi Double Cash Card for more details.
- Intro Balance Transfer APR
- 0% intro for 18 months on Balance Transfers
- Intro Purchase APR
- N/A
- Regular APR
- 19.24% – 29.24% (Variable)
- Balance Transfer Fee
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. A balance transfer fee of 5% of each transfer ($5 minimum) applies if completed after 4 months of account opening.
*All information about the Discover it Cash Back and the BankAmericard has been collected independently by CNET and has not been reviewed by the issuer.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.
