If you had asked me a few years ago if I thought it was worth paying a fee to pay taxes with a credit card, I would have said “Absolutely not.”
But my tune has changed since I discovered credit card points for nearly free travel. Keep reading to see why!
When is it a good idea to pay your taxes with a credit card?
*If you’re working on a minimum spend for a big welcome bonus and you need a big purchase to help you finish.
*You have a card that earns more cash back than what it costs you in fees (like earning 2% back on the Capital One Venture or Capital One Venture X or Capital One Venture X Business)
Of course, only use this strategy if you have the money to pay off these bills in full. Otherwise those points you earn are worth a lot less because now you’re paying interest on those hefty balances.
How to Pay Taxes with a Credit Card
The IRS provides a list of approved companies that allow taxpayers to pay their taxes with credit or debit cards. You can access the most up-to-date details on their official website. Currently, there are two payment processors available. For personal debit card transactions, fees typically range from $2.10 to $2.15, while credit card payments incur fees between 1.75% and 1.85%.
Another option for paying taxes is using the Plastiq Bill Pay service. However, this method comes with a higher fee—2.9% of the transaction amount, plus an additional transaction fee.
Important Note: When paying taxes through the IRS-approved Pay1040 platform, it’s best to use a personal Visa or Mastercard. Using business credit cards or any American Express card (personal or business) may result in significantly higher fees, up to 2.89%. However these convenience fees are tax deductible on business tax payments and on qualified personal tax payments
Tax Payment Due Dates
- January 15, 2025: 4th Quarter 2024 estimated taxes due.
- April 15th, 2025: 1st Quarter 2025 estimated taxes due.
- June 16th, 2025: 2nd Quarter 2025 estimated taxes due.
- September 15th, 2025: 3rd Quarter 2025 estimated taxes due.
- January 15th, 2026: 4th Quarter 2025 estimated taxes due.
Best Credit Cards that Earn 2 points per dollar
Since both credit card payment options charge a fee of at least 1.75%, it’s best to use a card that earns more than that in rewards. But remember, if you are making a payment on a new card and trying to hit a minimum spend, the welcome bonus you’ll earn will result in far greater than 2% back. In that case, it’s ok if the purchase itself earns less than 2 points per dollar since the welcome bonus will net a far greater return.
But if you are using a card you currently have, here are some good options!
Amex Blue Business Plus
Earns 2 Membership Rewards points per dollar on up to $50K spend per calendar year. Points can be transferred to a great selection of airline programs or to a few hotel programs.
Capital One Credit Cards
Each of the following cards earns a flat 2 points per dollar on EVERY purchase making them excellent options for making a tax payment.
The Best Credit Cards for a BIG Tax Payment
There are some excellent welcome offers available on some of my favorite credit cards, but the minimum spend requirements can be hard to achieve under normal circumstances. However, if you find yourself in a situation where you have a big tax payment, this could be a strategic time to open one of these cards!
The Business Platinum Card® from American Express
The Platinum Card® from American Express
American Express® Business Gold Card
Capital One Venture X Business
This card has a $30,000 minimum spend in 3 months but it comes with a hefty welcome bonus of 150,000 miles. Since you earn 2x points on every dollar you spend, you’ll have 210,000 Venture miles once you hit the minimum spend requirement.
Capital One Spark Cash Plus
Chase Ink Business Preferred®
This is basically the business version of my favorite personal travel card, the Chase Sapphire Preferred®. This one has an $8,000 minimum spend in three months with a welcome bonus of 90,000 points. It’s one of the best ways to build up your supply of Chase Ultimate Rewards and it’s easier to qualify for than you may think. Check out this post to learn how you can qualify for a business card.
**Learn more about my Favorite Business Cards here.**
All Around GREAT Cards to Open
The cards mentioned so far are great for earning at least 2 points back per dollar or for BIG tax payments. But there are so many great cards you could open to earn SUPER valuable welcome offers on ANY purchase. Here’s a list of the first 7 cards I think everyone should open. You can’t go wrong with any of them!
In Summary
Using a credit card to pay taxes can be a clever strategy to rack up rewards and hit spending thresholds for lucrative signup bonuses. While it might feel overwhelming initially, knowing the basics and selecting the right card can turn the process into a rewarding opportunity. With tools like instant card numbers, expedited shipping, and strategic card choices, you can make the most of your payment—even if you’re short on time. As tax deadlines draw near, take a moment to explore how paying your taxes with a credit card could bring you closer to your next dream trip!
More on Our Families Free Travels!
Family vacations were a near impossibility for us not that long ago. But about 7 years ago we discovered credit card points and miles and now traveling several times a year is the norm for us! If you want to learn more about how our family travels for next to nothing, I would love for you to check out my Quick Start Guide to Traveling with Points and Miles. It is a hobby that has forever changed our lives and given us the opportunity to see the world!
