Maximize Your Rewards: Pay Federal Taxes with Credit Card

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Paying your federal taxes is never a fun experience, but what if you could earn some rewards while doing it? By paying your taxes with a credit card, you can earn points, miles, or cashback that add up to substantial rewards. In this article, we will discuss how you can maximize the rewards by using credit card payments for federal taxes.

Benefits of Paying Federal Taxes with Credit Cards

Earn Rewards Points

When you pay your federal tax bill with a reward-earning credit card, you can earn valuable points that can be redeemed for free travel, hotel stays, electronics, and other items.

Meet Minimum Spend Requirements

If you’re trying to meet the minimum spend requirement on a new credit card application to receive its sign-up bonus offer; tax payments are an excellent way to reach those goals quickly.

Delayed Payment Schedule

By choosing an extended payment plan option when making IRS payments through approved partners like Plastiq or PayUSAtax, you’ll have extra time to pay off the balance without incurring high-interest rates usually associated with carrying balances on consumer cards.

Save Money on Interest Rates

Another benefit of using credit cards which offers 0 % introductory APRs promotion for balance transfers and purchases allows taxpayers who must carry a balance over several months due to cash flow concerns avoid interest costs altogether.

Risks of Paying Federal Taxes With Credit Cards

Before deciding whether paying your taxes with a credit card is right for you, it’s important also to consider potential drawbacks:

Processing Fees

There may be processing fees from third-party services that accept tax payments via credit cards. These fees can start at either $2.20 or 1.85% of your overall bill, whichever is higher. For instance, if you have a $5,000 tax bill, you might end up paying around $93.50 in processing fees.

High-Interest Rates

It’s essential only to use this method if able to fully pay off the debt before any promotional zero rate periods expire since interest rates charged might rise steeply once they end and increase overall costs substantially.

Penalties for Late Payment

Paying the IRS late may still result in penalties and interest charges regardless of how you pay them, including with a credit card.

Boosting Your Benefits with Your Tax Bill

Paying your taxes with a credit card can give you outsize benefits in several ways.

Charge Taxes to Help Earn a Big Introductory Offer

Many rewards credit cards offer sign-up or welcome bonuses, where you can collect a giant stash of rewards for spending a certain amount within a relatively short period of time. The biggest bonuses are often tied to bigger spending requirements. You might find a card offering 100,000 points, but it’ll also require you to spend $10,000 within a few months. That might not be realistic for your normal spending, but could be attainable in the month you’re paying taxes.

Hit Spending Thresholds on Existing Cards for More Rewards

Earning 2% cash back when you’re paying a 1.85% credit card processing fee isn’t exactly going to make you rich. But here’s a potentially lucrative option: Use this chunk of spending as a way to claim other benefits. For instance, if you owe $15,000 in taxes and would owe $280.50 in Pay1040 fees, but if you charge it to the right Hilton credit card, you could walk away with a free night certificate and redeem it for a room at Hawaii’s opulent Grand Wailea Resort, which otherwise typically costs between $1,200 and $2,000 per night.


Paying your federal taxes with credit cards is one way to earn rewards points while fulfilling your tax obligations. There are benefits and risks associated with this method, so it’s crucial to weigh the pros and cons carefully before deciding whether it makes sense for you.

By following some strategies like choosing Partners that offer promotional rates or aiming to meet minimal spend thresholds can increase the value of using this payment method even further!


Q: Can I pay my federal taxes online using a credit card? A: Yes, it is possible to pay your federal taxes online using a credit card. You can use the IRS’s official payment processor at to make a payment with your credit or debit card. However, note that you will incur an additional fee of around 1.87% to 3.93% for this service.

Q: What rewards or benefits can I earn by paying my federal taxes with a credit card? A: By using your rewards-earning credit card to pay your federal taxes, you can potentially earn points, miles, or cash back on every dollar spent on the tax bill payment (minus any processing fees). Depending on the reward rates offered by your particular credits cards, this could amount to significant savings.

Q: Are there any downsides to paying my federal taxes with a credit card? A: While charging your tax bill to your credit card may help maximize rewards earned from meeting minimum spend requirements and earning welcome bonuses on new cards, the convenience fee charged typically means that it’s not worth doing so unless there’s an advantageous opportunity such as sign-up bonus etc. The extra fees associated with paying via service providers like Paypal, Billdesk through which payments are processed for Credit Card Tax Payments aside from those charged directly by IRS add cost over owed tax. Credit Card Interest Rates are also high compared to other interest rates potential users should keep in mind before making any decision.