Today I was checking all the letters. It is usual for me to get credit card offers that come in form of balance transfer benefits, sign-on bonus, cards offering hefty bonuses upon meeting minimum spending limit set up credit card This is tax season and I had to pay some extra taxes this year. I was seeing if paying taxes using credit card will help me meet the credit card minimum spending limit for me to earn the sign-on bonus without any delay. I spoke to my tax consultant on this. They are not sure of that. The answer I got from them is that they have not seen anyone paying taxes using credit card as this costs them 3% in fees. If this is 3% in fees, the bonus I'm going to earn will not be a sweet spot. However, I wanted to check IRS website to see if they have tie-up with payment gateways. Interestingly i found the following This is applicable for federal income taxes and you can pay federal taxes using your credit card. If you live in state of NJ the credit card fees is 3% and the taxes can be paid online There are ton lots of benefits that outweigh the fees. I'll discuss that in detail in a separate post. Coming to this post on paying federal income taxes using credit card, the main reason why I applied for this credit card is that I'm planning to make use of portion of my upcoming federal income taxes using this credit card. I've heard from my tax auditing firm saying that I'll have to pay hefty convenience fees while I pay my federal income taxes using credit cards. I've done an analysis myself, found the following chart from IRS official website
| Processor | Debit Card | Credit Card | Digital Wallet |
|---|---|---|---|
| PayUSAtax.com (WorldPay US, Inc.) 844-729-8298 Payment 855-508-0159 Live Operator 844-825-8729 Service International Non Toll-Free 1-615-550-1491 Payment 1-615-942-1141 Live Operator 1-615-550-1492 Service |
$2.55 flat fee        |
1.96% fee,  |
See debit or credit card fees  Includes:    
|
| Pay1040.com (Link2GovCorporation) 888-729-1040 Payment 888-658-5465 Service International Non Toll-Free 1-501-748-8507 Live Operator |
$2.58 flat fee |
1.87% fee, |
See debit or credit card fees |
|
OfficialPayments.com/fed |
$2.00 flat fee |
1.99% fee, |
See debit or credit card fees |
I've done a simple analysis myself and found that Pay1040.com has the lowest and most reasonable convenience fees of 1.87%. I've done some analysis in their website and found that following types of taxes can be paid each year using their service Payment TypeMaximum Number of Payments Personal Form 1040 – Current Tax Return Year2 Per Year Form 1040 – Audit Adjustment/CP2000/CP2501/CP3219A2 Per Year Form 1040 – Prior Tax Return Year2 Per Year Form 1040 – Notice2 Per Year Form 1040 – Installment Agreement2 Per Month Form 1040-X – Amended Return2 Per Year Form 1040 Health Care Payment Amended2 Per Year Form 1040 Health CarePayment Audit Adjustment/CP2000/CP2501/CP3219A2 Per Year Form 1040 Health CareNotice2 Per Year Form 4868 – Automatic Extension of Time to File2 Per Year Form 1040-ES – Estimated Tax2 Per Quarter Form 5329-Retirement Plans2 Per Year Trust Fund Recovery Penalty – Prior Year2 Per Quarter Trust Fund Recovery Penalty – Installment Agreement2 Per Month
Business Form 941 – Current Year 2 Per Quarter Form 941 – Prior Year2 Per Quarter Form 941 – Installment Agreement2 Per Month Form 941 – Amended or Adjusted Return2 Per Quarter Form 940 – Current Year2 Per Year Form 940 – Prior Year2 Per Year Form 940 – Installment Agreement2 Per Month Form 940 – Amended or Adjusted Return2 Per Year Form 943 – Current Year2 Per Year Form 943 – Prior Year2 Per Year Form 943 – Installment Agreement2 Per Month Form 943 – Amended or Adjusted Return2 Per Year Form 944 – Current Year2 Per Year Form 944 – Prior Year2 Per Year Form 944 – Amended or Adjusted Return2 Per Year Form 945 – Current Year2 Per Year Form 945 – Prior Year2 Per Year Form 945 – Installment Agreement2 Per Month Form 945 – Amended or Adjusted Return2 Per Year Form 1041 – Current Year2 Per Year Form 1041 – Prior Year2 Per Year Form 1065 – Current Year2 Per Year Form 1065 – Prior Year2 Per Year As you would have seen personal federal income taxes can be paid using 2 credit cards maximum per year. We can make use of this for two credit cards say for example and meet minimum spend for sign-on bonus,travel rewards credit, mileage points etc in both the credit cards that translate to a value more than the fees I've thought of rental in first place but they charge 2.99% fees. So, utilize this opportunity without any delay. For paying taxes get free money minimum in the form of sign-on bonus, travel statement credit etc I utilized service Pay1040.com that offers lowest service fees of 1.87%. We shared both our credit cards and paid portion of it using two credit cards. this service allows maximum two credit cards for payment of taxes online. Also, you get a receipt immediately upon tax payment. You can try using online payment service for paying federal income tax bills using credit card. this is much cheaper than most rental services that do charge 2.99% on online rental payment. Don't miss this opportunity
