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You Can Pay Your Taxes With a Credit Card -- But Should You?

I used a credit card to cover my tax bill in 2022, but it's not a smart move for everyone.

  • CNET'S PICK
    CNET Rating CNET rates credit cards by comparing their offers to those of their categorical competitors. Each card is individually evaluated through a formula which reflects the standards and expectations of the contemporary market. Credit card issuers have no say or influence in our ratings. How we rate credit cards
    9.5/10
    Annual Fee $0
    Rewards Rate
    2% Earn unlimited 2% cash rewards on purchases
    Intro offer available Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months. Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
    Apply Now with Wells Fargo
  • CNET Rating CNET rates credit cards by comparing their offers to those of their categorical competitors. Each card is individually evaluated through a formula which reflects the standards and expectations of the contemporary market. Credit card issuers have no say or influence in our ratings. How we rate credit cards
    7.5/10
    Annual Fee $0
    Rewards Rate
    1% - 5% Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate.; Plus, earn unlimited 1% cash back on all other purchases - automatically.
    Intro offer available Intro Offer: Unlimited Cashback Match - only from Discover. Discover will automatically match all the cash back you've earned at the end of your first year! There's no minimum spending or maximum rewards. You could turn $150 cash back into $300.
  • CNET Rating CNET rates credit cards by comparing their offers to those of their categorical competitors. Each card is individually evaluated through a formula which reflects the standards and expectations of the contemporary market. Credit card issuers have no say or influence in our ratings. How we rate credit cards
    8/10
    Annual Fee $0
    Rewards Rate
    1% - 5% Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time.; Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24.
    Intro offer available Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
    Apply Now with Citi

This story is part of Taxes 2024, CNET’s coverage of the best tax software, tax tips and everything else you need to file your return and track your refund.

While refunds may be the star of tax season, for some this time of year means a large bill to the IRS. If you’re a freelancer -- like I was -- you might be facing a payment of thousands of dollars. 

If you already have the money saved, the best move is to pay off your bill in full to avoid any additional interest or penalties. But if you need more time to get current, a credit card could help you spread the payment across a number of months -- but there are caveats to consider.

What to know before using a credit card to pay your taxes

If you’re facing other debt or working to repair your credit, you should consider an IRS payment plan before turning to a credit card.

Even the best credit cards for bad credit don’t offer enough perks to make charging your tax bill worthwhile. However, if you have good credit, you can use a card that earns you some combination of rewards, a welcome bonus and introductory interest-free financing to make the transaction advantageous. That’s exactly what I did when I was faced with this dilemma two years back.

But you’ll need to do some math to make sure your credit card won’t cost you more. The IRS and state websites typically charge credit card processing fees of up to 2%, while online tax software services may charge you as much as 2.49%. So you’ll want the right mix of credit card benefits -- plus no annual fee -- to neutralize processing fees and come out on top.

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  “make a payment” under the payment processor of your choosing.

IRS payment processors and their respective processing fees.
Screenshot by Evan Zimmer/CNET; IRS

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

I used the Wells Fargo Active Cash® Card to pay my taxes, which earns 2% cash rewards. Its rewards rate was high enough to cover the fee charged by the payment processor, and its 0% introductory purchase APR offer let me spread the payment across 15 months from account opening (before the standard variable APR of 20.24%, 25.24% or 29.99% applied).

While the rewards were nice (I didn’t take home too much after the fee was covered), the true draw for me was being able to take my time with the payment without worrying about interest and earning the card’s welcome offer, which essentially knocked $200 off my tax bill. The Active Cash offers $200 in cash rewards after spending $500 in purchases within the first three months -- a threshold easily reached by my taxes.

Even if you have the money to pay off your tax bill, you might consider paying with a credit card if your tax bill is large enough to help you earn a welcome bonus or some extra rewards. Just be sure your credit card’s rewards rate exceeds the payment processor fee. 

For example, if you’re paying with a credit card using Pay1040, the fee is 1.87%. It’s worth charging your taxes only if you’re using a card with a reward rate that earns at least 2%. And if the card doesn’t come with an introductory purchase APR offer, make sure you can pay off the balance in full before interest begins accruing. Otherwise, you’ll be better off signing up for an IRS payment plan.

But be careful -- even if your card gives you more time to pay down your purchase. If you don’t pay off the balance within the given introductory APR time frame, the balance will accrue interest at the card’s variable rate. And with average credit card interest rates hovering above 20% APR, you could end up with an even more expensive payment than you started with.

Tips for using a credit card to pay off your taxes

Here’s what to keep in mind if you use a card to pay your taxes, particularly one with an introductory purchase APR:

  • Figure out how much you’ll need to pay monthly. The key to successfully using an intro APR comes down to getting the balance to zero before the promotional period ends. To do that, you’ll have to calculate how much you’ll need to pay monthly. Divide your card balance by the number of months in the introductory offer and you’ll have your answer.
  • Don’t use the card for any new purchases. It’s hard enough to pay down a large balance in time before it starts accruing interest. If you’re adding new purchases on top of what you owe, it’ll take even longer.
  • Don’t get enticed into overspending. If your tax bill isn’t enough to earn the card’s welcome bonus, don’t tack on new purchases to earn it. Focus instead on paying down the balance. Once your taxes are paid off, if there’s still time, you can focus on trying to earn the bonus through normal spending habits. Be intentional – you’re trying to use the credit card to improve your finances. Any overspending or any interest charges will set you back rather than put you ahead.

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.

CNET’S PICK
9.5/10
CNET Rating CNET rates credit cards by comparing their offers to those of their categorical competitors. Each card is individually evaluated through a formula which reflects the standards and expectations of the contemporary market. Credit card issuers have no say or influence in our ratings. How we rate credit cards
Apply Now
with Wells Fargo
Intro Offer
$200 cash rewards Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months. Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
Annual Fee
$0
Rewards Rate
2% Earn unlimited 2% cash rewards on purchases
Rec. Credit Recommended Credit: A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
670 – 850 Good – Excellent
APR
20.24%, 25.24%, or 29.99% Variable APR

I applied for the Active Cash to pay off my tax bill for a few reasons. One, I could get an additional 15 months from account opening to pay off my taxes before the standard 20.24%, 25.24% or 29.99% variable APR applied. Two, its 2% cash-rewards rate was high enough so that the rewards could be used to cover any processing fees. Three, I could earn the card’s welcome offer in one fell swoop and use it to cover a small portion of my tax bill. And finally, I’d have one of the best flat-rate rewards cards to continue to use once my balance had been paid off.

Thinking long-term is essential, too. Once your taxes are paid off, you’ll want a card you can continue to use and benefit from. For me, that made the Wells Fargo Active Cash an easy pick.

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
2%
Earn unlimited 2% cash rewards on purchases

I applied for the Active Cash to pay off my tax bill for a few reasons. One, I could get an additional 15 months from account opening to pay off my taxes before the standard 20.24%, 25.24% or 29.99% variable APR applied. Two, its 2% cash-rewards rate was high enough so that the rewards could be used to cover any processing fees. Three, I could earn the card’s welcome offer in one fell swoop and use it to cover a small portion of my tax bill. And finally, I’d have one of the best flat-rate rewards cards to continue to use once my balance had been paid off.

Thinking long-term is essential, too. Once your taxes are paid off, you’ll want a card you can continue to use and benefit from. For me, that made the Wells Fargo Active Cash an easy pick.

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
2%
Earn unlimited 2% cash rewards on purchases
7.5/10
CNET Rating CNET rates credit cards by comparing their offers to those of their categorical competitors. Each card is individually evaluated through a formula which reflects the standards and expectations of the contemporary market. Credit card issuers have no say or influence in our ratings. How we rate credit cards
Intro Offer
Cashback Match™ Intro Offer: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
Annual Fee
$0
Rewards Rate
1% – 5% Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate.; Plus, earn unlimited 1% cash back on all other purchases – automatically.
Rec. Credit Recommended Credit: A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
670 – 850 Good – Excellent
APR
17.24% – 28.24% Variable APR

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)*
5%
Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate.
1%
Plus, earn unlimited 1% cash back on all other purchases – automatically.

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)*
5%
Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate.
1%
Plus, earn unlimited 1% cash back on all other purchases – automatically.
A long introductory APR with no annual fee

BankAmericard® credit card

8.75/10
CNET Rating CNET rates credit cards by comparing their offers to those of their categorical competitors. Each card is individually evaluated through a formula which reflects the standards and expectations of the contemporary market. Credit card issuers have no say or influence in our ratings. How we rate credit cards
BankAmericard® credit card
Annual Fee
$0
Rewards Rate
N/A This card doesn’t offer cash back, miles, or points
Rec. Credit Recommended Credit: A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
670 – 850 Good – Excellent
APR
16.24% – 26.24% Variable APR on purchases and balance transfers

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 fee of 3% for 60 days from account opening, then 4% will apply.
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% for 60 days from account opening, then 4%
N/A

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 fee of 3% for 60 days from account opening, then 4% will apply.
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% for 60 days from account opening, then 4%
N/A
8/10
CNET Rating CNET rates credit cards by comparing their offers to those of their categorical competitors. Each card is individually evaluated through a formula which reflects the standards and expectations of the contemporary market. Credit card issuers have no say or influence in our ratings. How we rate credit cards
Apply Now
with Citi
Intro Offer
$200 cash back Earn $200 cash back after you spend $1,500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® Points, which can be redeemed for $200 cash back.
Annual Fee
$0
Rewards Rate
1% – 5% Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time.; Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24.
Rec. Credit Recommended Credit: A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
580 – 850 Fair – Excellent
APR
19.24% – 29.24% (Variable)

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.
5%
Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24.
1%
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time.

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.
5%
Plus, for a limited time, earn 5% total cash back on hotel, car rentals and attractions booked on the Citi Travel℠ portal through 12/31/24.
1%
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases. To earn cash back, pay at least the minimum due on time.

*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.

Evan Zimmer has been writing about finance for years. After graduating with a journalism degree from SUNY Oswego, he wrote credit card content for Credit Card Insider (now Money Tips) before moving to ZDNET Finance to cover credit card, banking and blockchain news. He currently works with CNET Money to bring readers the most accurate and up-to-date financial information. Otherwise, you can find him reading, rock climbing, snowboarding and enjoying the outdoors.