The end of tax season is quickly approaching, which means if you’re expecting a hefty tax bill, you likely haven’t filed yet.
While you have a couple options to foot the bill, you may be surprised to learn that paying the IRS with a credit card could be your best bet. Don’t believe us? Here are two perks of paying your IRS bill with a credit card.
Steering clear of IRS fees
While taxpayers who can’t pay their full balance of taxes owed do have the option to set up a payment plan with the IRS, they may not know that they’ll have to pay some fees to get the plan squared away (if they need more time than the 120-day short term agreement). After you agree on a payment plan, the IRS charges $52 for direct debit agreements or $120 for agreements not including direct debiting. In addition, you’ll be charged 3% interest on the balance due until you pay it off.
On the other hand, if you pay the balance in full with a credit card, you’ll have to pay a one-time processing fee — the cheapest one is 1.87% — however, you can avoid paying any interest on your taxes if you use a credit card with a long-term 0% intro APR (assuming you pay the balance off before the standard APR kicks in). Not sure which cards offer longer term intro periods? Here are some of the top-rated options.
This slideshow was taken with approval from a blog post on NextAdvisor.com. NextAdvisor.com is an independent source for comparing Internet services. Their mission is to help people save money and make optimal buying decisions by presenting them with useful comparisons and reviews of service providers.