Point Me To First Class 6. Paying Your Taxes by Credit Card (Part 1)
Apr 10, 2023
Tax payments as a major points-earning opportunity for high earners and business owners. How to pay federal and state taxes by card and the online processors involved. Typical processing fees and how they scale with payment size. A simple three-step math framework and real examples showing break-even cents-per-point. Why higher earn rates and certain redemptions can justify the fees.
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How To Pay Federal Taxes By Credit Card
- Do pay federal taxes by credit card through the IRS pay page using the debit or credit card option to earn points on the charge.
- Follow the online prompts, enter identifying info and card details, and save screenshots of the confirmation for your records.
Credit Card Tax Payments Always Have A Percentage Fee
- Insight: All IRS card payments incur a processing fee typically between 1.85% and 1.98% regardless of processor choice.
- Example: A $10,000 tax charge at 1.85% adds $185, raising the total to $10,185.
Calculate Fee Versus Points Value Before Paying Taxes
- Do the math before using a card: calculate the processing fee, points you'll earn (including fee amount), and the cents-per-point needed to break even.
- Use those three numbers to objectively decide if paying taxes by card makes sense.