Credit cards can be a convenient way to pay taxes while potentially earning some rewards along the way. Paying taxes with a credit card could also give you some breathing room if you don’t have the funds to pay your taxes by the due date.
Still, there’s one major hurdle you can’t avoid when paying taxes with a credit card — processing fees. Here are some of your best options for using a credit card to pay taxes while mitigating the downsides.
Top credit cards for paying taxes
Best for intro APR
Wells Fargo Active Cash® Card
Bankrate score
4.3
Bankrate review
Bankrate review
19.24%, 24.24%, or 29.24% Variable APR
Best for earning a sign-up bonus
Chase Sapphire Preferred® Card
Bankrate score
4.3
Bankrate review
Bankrate review
19.99% – 28.24% Variable
Best for travel
Capital One Venture X Rewards Credit Card
Bankrate score
4.9
Bankrate review
Bankrate review
19.99% – 29.24% (Variable)
Best for first-year value
Bankrate score
3.9
Bankrate review
Bankrate review
18.24% – 27.24% Variable APR
Best for business taxes
Bankrate score
4.3
Bankrate review
Bankrate review
17.49% – 27.49% Variable
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Comparing the best credit cards for paying taxes
Depending on your overall financial needs, here are some of our top choices for paying taxes with a credit card.
| Card Name | Best for | Highlights | Annual fee | Recommended credit score |
|---|---|---|---|---|
| Wells Fargo Active Cash® Card | Intro APR |
|
$0 | 670 – 850 |
| Chase Sapphire Preferred® Card | Sign-up bonus |
|
$95 | 670 – 850 |
| Capital One Venture X Rewards Credit Card | Travel |
|
$395 (See rates and Fees) | 740 – 850 |
| Discover it® Miles | First-year value |
|
$0 | 670 – 850 |
| The American Express Blue Business Cash™ Card | Business taxes |
|
No annual fee | Good to Excellent |
How to choose the best credit cards for paying taxes
The best credit card for paying taxes depends on what card benefits you want in return for opening the account. You can often stack various incentives to provide a great initial value, or you might choose a card that offers more benefits over the long-term. Here are some of the primary considerations when choosing to pay your taxes with a credit card.
Rewards
You can earn rewards on your tax bill spending, but it will likely not count towards the bonus categories on any card — meaning it may only earn 1 percent. If earning rewards is your primary focus, you’ll want to choose a card with a high rate on categories you regularly spend in or on all purchases, like one of our best flat-rate cash back cards.
You should also be aware that the rewards you earn are likely worth less than the fees you’ll owe for using a credit card on a tax payment. For example, if you must pay 3 percent in processing fees but only earn 2 percent cash back on the purchase, you’re losing out on that transaction. This is why you want a card that rewards you in many categories. Rewards shouldn’t be the primary consideration for paying a tax bill but rather part of a larger goal of earning a sign-up bonus, maximizing rewards or utilizing an intro APR offer.
Potential for a sign-up bonus
If your tax bill is high enough, it can help earn a credit card’s welcome bonus. Some of the best credit card offers come with sign-up bonuses that provide a significant return on required spending. Your tax bill could knock the whole amount required out in one purchase, providing you with a quick return.
If you want to apply for a new credit card for your tax spending, consider the size of your bill and the minimum spending requirement for the welcome offer. You can factor the value of the welcome offer and the return from any rewards earned against whatever you might pay in fees.
Make sure to start your taxes early to take advance of a sign-up bonus. While many cards process applications quickly, it can still take a few days and you may have to wait until you have the physical card before you can use it.
Intro APR offers
One approach to tackling a substantial tax bill is to find a card with an intro APR offer. This can give you space to pay down a tax bill that you may not be able to immediately afford. Just remember that 0 percent APR offers have an ending date, so you could wind up paying off your debt at your card’s regular variable rate if you can’t pay off the bill by the end of the introductory period.
If you can find a card with a solid intro APR offer on purchases and a welcome bonus, you’ll get the best of both worlds. You’ll earn rewards on paying the bill, earn a significant return via the welcome offer, and have time to pay the bill as needed.
Keep in mind that this will only work for one ot two years, depending on when you apply for a card. Make sure you have another solution in mind after the APR offer ends.
Split payment
Another benefit to paying taxes with a credit card is you can split your tax bill across different cards. If your bill is high enough, this lets you earn or work toward multiple welcome offers. Stacking that with the rewards earned on those cards can result in a substantial return.
Just know that there are payment frequency limits for each processor and payment type. Typically, you are permitted two payments with each processor, but there is some variation.
Drawbacks when paying taxes with credit cards
While paying your taxes with credit cards can have some benefits, there can be significant drawbacks, such as processing fees and potential interest charges.
Processing fees
If you use a credit card for convenience, you’ll have to pay processing fees, which can add up and quickly erase any value earned from the card. The following chart shows your options for paying federal taxes with a credit card to the Internal Revenue Service (IRS), plus the fees each company charges:
While credit card surcharges for state taxes vary, you’ll pay between 1.82 percent and 1.98 percent to pay your federal tax bill with a credit card. Whichever payment processor and credit card you choose, you’ll want to ensure that you earn back more in value than you pay in fees. Bankrate’s points and miles valuations can help you discern the actual value of your earnings and subtract what you’ll owe in processing fees.
Impact on your credit score
A large purchase, such as a tax payment, can impact your credit score, often by increasing your credit utilization ratio. Even if you can pay off your balance promptly, your score may temporarily drop for a brief period.
If you carry a balance, you can pay significant interest charges, making your tax bill considerably more expensive. If your tax bill is higher than you can afford, you’ll want to plan wisely to pay off your credit card debt so you don’t end up paying tons of additional interest on top of your hefty tax bill.
Bankrate insight
If you can’t pay your tax bill in full, consider one of the IRS’s payment plans. You can apply for a short- or long-term payment plan, depending on your eligibility and pay your owed taxes in monthly installments. In certain cases, it may be better than using a credit card.
What’s next?
Enter some basic information into CardMatch™, Bankrate’s prequalification tool, to find a card that best suits your needs. For more insight, our Spender Type Tool can point you in the right direction.
The bottom line
Paying your taxes with a credit card can be rewarding, but you should make sure the card offers plenty of perks and benefits outside of your tax purchases as well. Since you won’t earn boosted rewards on a tax payment, you’ll want to consider whether earning a sign-up bonus or having an intro APR offer to spread out your payments is something important to your payment needs.
Frequently asked questions
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No, paying taxes with your credit card is treated like a retail purchase and will not be processed as a cash advance.
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The IRS uses third-party payment processors for debit and credit card payments. They state, “This method is safe and secure, and your information is used only to process your payment.” Payments can be made online or over the phone.
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No. You can pay your taxes later. However, the IRS deadline is April 15. After the deadline, you’ll be subject to other fees. If you anticipate a high tax bill, filing earlier may be better than filing later so you can properly plan for the payment.
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