“Should I Pay My Taxes With a Credit Card?”
Does it make sense to pay taxes with a credit card? Keep reading to find out!
How to Pay Taxes With a Credit Card
You can pay taxes with a credit card, but there is a processing fee of at least 1.75 percent. You can see the credit card processing fees on the IRS website here. When and why would it make sense to pay taxes with a credit card? If you are working on hitting a big minimum spend for a welcome offer! Then the points you earn from the welcome offer will outweigh the convenience fee. Let's run through a couple of examples…
Example One:
Say you have a $30,000 tax bill.
You could open the Capital One Spark Cash Plus with a welcome offer of $2,000 cash back after spending $30,000 in the first 3 months of account opening nd pay your taxes with this card.
The 1.75 percent processing fee for the $30,000 charge would be $525 HOWEVER you would earn $2,000 cash after you hit the minimum spend plus $600 for the 2% cash back for every dollar you spend on the card. ($30,000 x 2% cash back)
After meeting the minimum spend with your tax bill and paying the 1.75 percent convenience fee of $525, you'd earn $2,600 cash back! That sounds like a win to me!
And to make it even better, you can convert this cash back to Venture miles if you have a Venture earning credit card like the Capital One Venture Rewards Credit Card or the Capital One Venture X Rewards Credit Card.
Example Two:
Say you have a $8,000 tax bill.
You could open the Ink Business Preferred® Credit Card that currently has a welcome offer of 90,000 points when you spend $8,000 in the first 3 months of account opening.
After meeting the $8,000 minimum spend with your tax bill and paying the 1.75 percent convenience fee of $140, you would earn 90,000 Chase points!
That's worth at least $1,125 worth of travel so you'd be coming out ahead by paying a $140 convenience fee to hit this minimum spend!
Bottom Line
Always do the math, but using a credit card to pay your taxes can be a great way to hit those higher to hit minimum spends.
For more credit card recommendations and current elevated offers to help you decide what card to get, check out my best offers page -> HERE.
When you apply for a credit card using my affiliate links I earn a commission. I always appreciate it when you support free content by using my affiliate links :)
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