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Is it worth paying federal income taxes by credit card, given the service fee? It's 2025, which means most Americans will be gathering their paperwork to file their tax returns over the next few weeks or months. And while many taxpayers will pay electronically via the Electronic Federal Tax Payment System (EFTPS) or by check, for which there is no fee, it can be worth paying the credit card processing fee in some circumstances.
How Much Does It Cost to Pay Taxes by Credit Card?
In 2025, the credit card processing fee via payment processor Pay1040 is expected to be 1.75%, down from the 1.87% charged in 2024. For credit card payments, the IRS uses three third party payment processors; the other two have been PayUSAtax and ACI Payments, although the previously leaked image below only shows Pay1040 and ACI Payments, so there's a question as to whether PayUSAtax will be an option once the IRS Pay by Credit Card page updates.
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Best Credit Cards to Use for Tax Payments
If you have a large tax bill and have a new credit card with significant minimum spend, it can make sense to use that card to pay taxes, since even with the credit card fee payment, you should come out ahead depending on what the signup bonus is. For example, the Chase Ink Business Preferred requires $8000 minimum spend within the first 3 months to earn the signup bonus of 90,000 Ultimate Rewards points. We value each Ultimate Rewards point at about 2 cents per point, yielding a signup bonus value of $1800. Paying <$150 in credit card processing fees to pay $8000 in taxes is well worth it, especially if wanting to earn the signup bonus and redeem the earned Ultimate Rewards points towards award travel sooner, rather than later.
It can also be worth it to use a card that provides a bonus on all spend. For example, our no annual fee AMEX Blue Business Plus card earns 2X Membership Rewards points on all spend (up to $50,000 per calendar year) so this is another great choice. Currently there's an AMEX Offer that provides an additional 3000 Membership Rewards points after spending $11,500 or more within 90 days of adding the offer to your card, so a tax payment of $11,500 would cost $200-$215 in fees ($201.25 if the fee turns out to be 1.75%, or $215 if the fee remains 1.87%) and earn 26,000 Membership Rewards points if the 3000 bonus points AMEX Offer is used. At a 2 cents per AMEX point valuation, 26,000 points equates to $520, which nets over $300 in value after subtracting the credit card transaction fees.
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Something to keep in mind is that, as noted above, these are third party credit card processors, and some users of them have noted delays in having their payments properly recorded by the IRS, with poor customer service when trying to get in touch with these processors. So if going the credit card route, we recommend filing early, taking screen shots of your payment confirmation, and noting down your payment confirmation number to help resolve any potential issues.
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