Desperate times call for desperate measures, and while you really shouldn’t put yourself into further debt by paying your taxes with credit cards – if you don’t have much choice you can pay your taxes with credit cards. You can use any valid credit card or debit card that has enough room on the available balance and make your payment via the internet or by phone.
Fees for Paying Taxes with Credit Cards
Since paying your taxes by credit card is “convenient”, you can expect to pay a convenience fee for doing so, unless you meet the following conditions as revised by the IRS on April 7th, 2009 that enables you to deduct the fees for paying taxes by credit cards:
- You must itemize your tax return and claim the fee as a miscellaneous deduction in the “job expenses and certain miscellaneous deductions” portion of Schedule A.
- You can deduct the amount that exceeds 2% of adjusted gross income. If your adjusted gross income is $42,000 then your miscellaneous items must add up to more than $840 – and you can deduct the amount that exceeds it – if you have $870 in miscellaneous expenses, you can deduct $50 on Schedule A.
If you don’t meet this criteria, you’ll pay a fee that is an average of 2.5% of your total amount owed in exchange for the convenience of paying with credit card. The IRS does not save your credit card information. If you owe money to your state and/or local government, most of the time you will be able to make those payments via credit card as well – but there are likely to be additional convenience fees for each transaction.
Where to Make Your Tax Payment with Credit Card
If you need to pay your taxes on credit card, here is a list provided by the IRS for where you can do that: http://www.irs.gov/efile/article/0,,id=101316,00.html