Tuesday, April 19, 2016

IRS will Accept Your Credit Card, but is it the Best Way!

If you are wondering about “does IRS accept credit card in paying the tax”, then the answer is yes. IRS tax payment credit card can be a good option if you are on your last day and still scrambling.

IRS tax payment credit card
A few important notes on this regard

The Taxpayer Relief Act (1997) doesn’t allow the IRS to pay transaction fees on credit cards. This is why the IRS tries a third party collaboration system that includes WorldPay US, Link2Gov and Official Payments. All the taxpayers are eligible to pay their taxes through MasterCard, Visa, Discover and American Express. Convenience Fee ranges from 1.87 to 2.25 percent on the payments made through credit card. The system of the credit card to make tax payment makes it hazard free for the taxpayers, but the charges made by third parties are quite high and its hurt the balance.

If someone was considering paying tax through credit card and hoping for a reward by that, must have noticed that it is not possible. The biggest reason of this impossibility is the charge made by the third party assigned to take tax payment. The reward would be quite less than the amount of charge made by third party and thus, it’s not a beneficial option.

Another important factor one must understand that the paying through credit card also ropes in the factor of interest. If you were paying a high amount then it would make a bad impact on the Credit Ratio / Utilization Ratio. This would go on to lower your score and this will also impact on the interest rates by making it higher. The whole process of paying tax through credit card do have some hazards regarded it.

Opting for the best option

The best option according to specialists is to save money from the start of the year so that at the end moment you don’t have to panic. Still, if such situation occurs, one can look for other options too. A personal loan with lesser interest can be a good option compared to IRS tax payment credit card. Thus, it is vital that taxpayers think before paying their tax through credit card. 


Related Post