In today's modern digital society it is rare to find a business that doesn't accept credit cards. So it is logical to ask if the IRS accepts credit cards for payment of your taxes. And surprisingly, even though you can file your taxes electronically, the IRS doesn't accept credit cards for your payment. But that doesn't mean you can't pay your taxes via credit card.
How to Pay Taxes Via Credit Card
Even though the IRS doesn't accept credit card payments itself, it does list several partner sites that do accept credit cards and will allow you to pay your taxes through their sites via a credit card. It calls these partners "e-pay service providers." You can also pay via direct withdrawal from your bank account if you set up an account with the IRS Electronic Federal Tax Payment System.
Each e-pay service provider charges a different fee. For credit cards the fee is a percentage of the total payment and for debit cards most providers charge a flat dollar fee. So if you are paying a large bill it might cost significantly less to pay by debit card rather than pay the percentage charge associated with a credit card. As of January 2011, fees range between 1.9 percent and 2.35 percent for credit cards, and debit card fees range from $3.89 to $3.95 although one provider is currently charging 1.9 percent for debit cards as well.
Integrated IRS e-file and e-pay Service Providers
The IRS lists three different service providers that allow you to not only pay your taxes via credit card but to also file your taxes electronically. These three companies are Official Payments Corporation, File Your Taxes and RBS WordPay, Inc. Each of these also charge a convenience fee ranging from 2.35 percent of your tax bill to 3.93 percent.
Electronic Tax Preparation Software
Another way to pay your taxes with a credit card is through tax preparation software. Most software allows payment via credit card through their credit card processor and integrates the process into the electronic filing process built into the software. Some tax professionals also offer this service. Generally it is not free and you will be charged a fee for the convenience of paying via credit card.
- tax forms image by Chad McDermott from Fotolia.com