If you are wondering about “does IRS accept credit
card in paying the tax”, then the answer is yes. IRS tax payment credit card can be a good option if you are on
your last day and still scrambling.
A few
important notes on this regard
The Taxpayer
Relief Act (1997) doesn’t allow the IRS to pay transaction fees on credit
cards. This is why the IRS tries a third party collaboration system that
includes WorldPay US, Link2Gov and Official Payments. All the taxpayers are
eligible to pay their taxes through MasterCard, Visa, Discover and American
Express. Convenience Fee ranges from 1.87 to 2.25 percent on the payments made through
credit card. The system of the credit card to make tax payment makes it hazard
free for the taxpayers, but the charges made by third parties are quite high
and its hurt the balance.
If
someone was considering paying tax through credit card and hoping for a reward
by that, must have noticed that it is not possible. The biggest reason of this
impossibility is the charge made by the third party assigned to take tax payment. The reward would be quite less than the amount of charge made by third
party and thus, it’s not a beneficial option.
Another
important factor one must understand that the paying through credit card also
ropes in the factor of interest. If you were paying a high amount then it would
make a bad impact on the Credit Ratio / Utilization Ratio. This would go on to
lower your score and this will also impact on the interest rates by making it
higher. The whole process of paying tax through credit card do have some
hazards regarded it.
Opting for the best option
The best
option according to specialists is to save money from the start of the year so
that at the end moment you don’t have to panic. Still, if such situation
occurs, one can look for other options too. A personal loan with lesser
interest can be a good option compared to IRS tax payment credit card. Thus, it is vital that taxpayers
think before paying their tax through credit card.
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