Paying Taxes with Credit? Is It a Good Idea.
The article “Should I Pay My Taxes With Plastic?” posted on Smartmoney.com gives us a bit of insight into the issues with paying your taxes with your credit card. While you may dread the idea of owing the IRS money and find that charging you taxes to the plastic is convenient you may be overlooking the overall cost of extra charges. The “convenience fee” charge may not be overwhelming when you owe a small amount but it can get hefty when paying larger bills.
Also, by paying with a credit card you may be overlooking options to pay your debt that will charge you less interest over the long run. There is the possibility that you may qualify to set up an installment-payment plan with the IRS directly. While the interest rate the IRS charges is subject to change there is a good chance it is cheaper than the interest rate that you will get from your credit card company.
Keep in mind if your tax debt is extreme, delinquent and/or you are facing IRS collection actions make sure you contact a reliable tax attorney to find out the best options available for your situation. To read the SmartMoney article about paying your taxes with your credit card see http://www.smartmoney.com/taxes/income/tax-tips-should-i-pay-my-taxes-with-plastic/