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Preparing taxes is no fun. No fun at all. But paying taxes doesn’t have to be painful. In fact, it can be quite rewarding to pay taxes via credit card. The key is to earn credit card rewards that more than offset tax payment fees. Here’s what you need to know…

Important due dates

Pay taxes via credit card: Key Info

Credit card fee 1.96% to 1.99%

Here is some key information you’ll need to know about paying taxes with credit or debit cards:

The IRS maintains a list of companies that accept credit and debit cards towards tax payments. You can find the current information by clicking here. Currently there are three separate payment processing companies on the list. At the time of this writing, debit card fees range from $2 to $3.95 per transaction and credit card fees range from 1.96% to 1.99%. Alternatively, you can pay taxes via the Plastiq Bill Pay service, but that will cost you more: 2.85%.

Additional Info Direct from the IRS

The IRS page that lists options for paying by credit or debit card also lists the following “Additional Information”:

  • No part of the card service fee goes to IRS.
  • You don’t need to send in a voucher if you pay by card.
  • Card processing fees are tax deductible for business taxes.
  • You must contact the card processor to cancel a card payment.
  • IRS will refund any overpayment unless you owe a debt on your account.
  • Your card statement will list your payment as “United States Treasury Tax Payment” and your fee as “Tax Payment Convenience Fee” or something similar.
  • Federal tax lien releases can take up to 30 days after we receive full payment; liens may remain for other individuals who haven’t fully paid their portion.
  • When you pay while filing your taxes through online software, different card fees apply.

Two payment limit per processor

The IRS maintains a table of frequency limits for paying taxes via credit or debit card (found here). In general, they say you can make up to two payments per tax period per type of tax payment. For example, you can make 2 payments every quarter to your quarterly estimated taxes, and you can make 2 payments every year to your annual taxes. Important: In my experience, these limits are enforced per payment processing company. That means that you can really make up to 6 payments per tax period per type of tax payment (or more if you make Plastiq bill payments as well). An IRS advisor I spoke with several years ago did not think that there would be any problem with making more than 2 payments by using different processors. Since then, I have made more than 2 payments per tax period many times and never had any issues. That is, of course, just my own personal experience. I can’t guarantee that your outcome would be the same.

Twice as many potential payments when filing jointly

If you file jointly with a partner, you can make payments in each person’s name, separately.  These payments will still apply to the one overall tax return, but not always automatically.  According to reader reports, in some cases the IRS matches these payments to the combined return automatically.  In other cases, people have reported the need to call the IRS to ask them to combine the payments.  I recommend calling shortly after filing your annual taxes to ensure that the IRS has correctly applied both sets of payments to the same return.

Obviously if you are filing separately, you can each make your own payments without any issues.

No cash advance fees

I’m often asked whether credit card companies charge cash advance fees when paying taxes by credit card. The answer is no. All three official IRS payment processors agree (via their FAQ pages) that the payment is treated as a purchase not a cash advance. You can find FAQ info herehere, and here.

Unlimited payments via Plastiq

If you’re willing to incur higher fees, you can make an unlimited number of tax payments via the Plastiq bill pay service. Plastiq usually charges 2.85% to pay bills (including taxes) via credit card, but they occasionally offer lower fees via short term promotions. For details, please see: Plastiq Bill Payment Service.

To pay taxes via Plastiq, use Plastiq’s tax payment

Are tax payment fees deductible?

Fees are no longer deductible for personal taxes: Tax preparation fees used to be deductible when itemizing deductions for personal tax returns, but that is no longer the case.

Card processing fees are tax deductible for business taxes: This can substantially reduce your net cost of using payment services.

Tax payment history (how to see your info online)

Once you’ve made payments through online processors, Plastiq, or other means, you may want to see proof that the IRS received the amount you sent. You can view past payments by signing up here:

Reporting estimated payments

Estimated payments should be reported when filing your annual taxes. In my experience, if you make a mistake and forget to report some of these payments, the IRS will catch the error and refund the difference.

How to pay end of year taxes

Tell your tax preparer or tax software that you’ll pay via check. Then, browse to the appropriate tax payment site (e.g.,,, or to pay your taxes. There is no need to mail in the 1040V payment voucher.

What happens if you over-pay your taxes?

Overpayments will be refunded: The IRS will refund any overpayment unless you owe a debt on your account.

Do you need to mail in payment vouchers?

No. No payment voucher required. You don’t need to send in a voucher if you pay by card.

Top reasons to pay federal taxes with a credit card or gift card

1. Profit

A number of credit cards earn cash rewards greater than 1.87%. The best of the best are two cards that earn 3% cashback in your first year of card membership:

  • 3% first year:
    Discover It Miles - Double Miles your first year$50 + First Year Double
    Get $50 after first purchase. All miles earned in first 12 months will be doubled. This makes this a 3% cash back card for the first year. 
    No Annual Fee
    Base: 1.5X
    Earning rate: 1.5 miles per dollar for all spend.

    Noteworthy perks: ⚬ No foreign transaction fees ⚬ Redeem miles for travel or for cash back (1 cent per mile either way)
    Alliant Cash Back Visa Signature CardThis card no longer features a first-year bonus.
    No Annual Fee First Year, Then $99
    Base: 2.5X
    Earning rate: 2.5% cash back everywhere up to $250 back per billing cycle (Note that some purchases, like those from, are not eligible for cash back)

    Noteworthy perks: No foreign transaction fees
    Note: This is based on the first year estimate

Since you’ll earn 3% cash back on both the base tax payment and the processing fees with the above cards, your profit should be approximately 1.186% of your tax payment.


  • $10,000 tax payment + 1.87% fee = $10,187
  • Cash back earned at 3% = $305.61
  • Profit = $305.61 – $187 = $118.61 (1.186% of $10K)

2. Meet minimum spend requirements

If you recently signed up for new credit cards, chances are good that you have to spend thousands of dollars in order to earn the associated signup bonuses. Paying taxes is a cheap and easy way to accomplish that.

Go to our Best Monthly Offers page to view most valuable welcome bonuses.

3. Buy miles cheaply

Several credit cards offer up to 1.5 miles per dollar for spend. In these cases, a 1.87% tax payment fee means that you can essentially buy miles for 1.22 cents per dollar. Even better, some cards earn 2 miles per dollar.  The Amex Blue Business Plus credit card earns 2 Membership Rewards points per dollar on up to $50K spend per year. And the Citi Double Cash card earns 2 cents per dollar uncapped. Those cash rewards can be converted to Citi ThankYou points and then to airline miles. With these 2X everywhere cards you can essentially buy miles for 0.92 cents per dollar.

2X Example:

  • $10,000 tax payment + 1.87% fee = $10,187
  • Miles earned at 2X = 20,374
  • Cost per mile = $187 / 20,374 = 0.92 cents per mile

1.5X Example:

  • $10,000 tax payment + 1.87% fee = $10,187
  • Miles earned at 1.5X = 15,281
  • Cost per mile = $187 / 15,281 = 1.22 cents per mile

Cards that offer 2X airline miles per dollar:

  • Citi Double Cash: Earns 2 cents per dollar, uncapped. Cash rewards can be converted to ThankYou points and when paired with a Citi Premier or Prestige card those points can be transferred to a large selection of airline programs.
Excellent card for cash back. This card has risen to the top for great everyday spending cards because of it's 2% cash back. Instead of cash back, you can also choose to earn double ThankYou points instead.
  • 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 large selection of airline programs or to a few hotel programs.
15,000 Amex Membership Rewards Points after you spend $3,000 in the first 3 months. One of the best Amex business cards with no annual fee. It has transfer partners and offers 2x rewards for all of your spending up to a limit. Earn 2X Membership Rewards points on all eligible purchases, up to $50K spend.

Cards that offer 1.5X airline miles per dollar:

  • Chase Ultimate Rewards. Two no-fee cards in Chase’s lineup earn 1.5 Ultimate Rewards points per dollar for all spend. Pair either one with a premium card (e.g. Sapphire ReserveSapphire PreferredInk Business Preferred, etc.) to transfer points to several airline or hotel programs:
$200 after you spend $500 in the first 3 months. A great cash back or points card with no annual fee and 0% APR intro offer for purchases. Compliments other Chase cards with 1.5% cash back or 1.5x points on all purchases. Current offer earns 5x (or 5%) grocery store purchases (not including Target or Walmart purchases) on up to $12,000 spent in the first year.
75,000 Chase Ultimate Rewards Points after you spend $7,500 in the first 3 months. New incredible offer! A no-brainer, great business card with a great bonus, no annual fee, and 0% offer. Your choice to receive 1.5% cash back or 1.5x points.
  • Amex Membership Rewards. Amex points can be transferred to a large selection of airline programs or to a few hotel programs.
100,000 Amex Membership Rewards Points after you spend $15,000 in the first 3 months. A card with a huge welcome offer and loaded with benefits for frequent travelers.
15,000 Amex Membership Rewards Points after you spend $1,000 in the first 3 months.
  • Capital One Miles. Capital One offers two cards that earn 2X rewards miles everywhere. These “miles” can be transferred to real airline miles, usually at a rate of 2 to 1.5. This means that the following cards are capable of earning 1.5X airline miles everywhere:
60,000 Capital One Miles after you spend $3,000 in the first 3 months. Best "no-thinking" starter card (or compliment to Chase Sapphire Preferred) for those who don't want to think when earning and redeeming miles.
50,000 Capital One Miles after you spend $4,500 in the first 3 months. Another good business card for those who like Capital One. Similar to the Spark Cash, but instead of cash, it allows you to use miles as statement credits for travel purchases.

4. Earn valuable big spend bonuses: elite status, free nights, companion pass, etc.

Many credit cards offer bonuses for meeting high spend thresholds. Here are a few examples:

  • Amex Delta Reserve or Delta Reserve BusinessSpend $30,000, get 15,000 Medallion Qualifying Miles (towards elite status). At $60,000, $90,000, and $120,000 you’ll get another 15,000 Medallion Qualifying Miles.
  • Amex Delta Platinum or Delta Platinum Business: Spend $25,000, get 10,000 Medallion Qualifying Miles (towards elite status). At $50,000 spend, get another 10,000 Medallion Qualifying Miles.
  • Southwest PlusSouthwest Premier, or Southwest Business: With Southwest, when you earn 125,000 points in a calendar year (including points earned from credit card spend) you get a companion pass good for an unlimited number of flights for the rest of that year and all of the next calendar year.
  • Barclaycard JetBlue Plus, or JetBlue Business: Spend $50,000 and get Mosaic status which offers free changes and cancellations; free checked bags; expedited security; early boarding; free drinks; enhanced point earnings; and 15,000 bonus points upon qualifying.

(Note: Some of this content originally appeared on The Frequent Miler and has been posted with permission.)


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