When tax season rolls around and you’re short on cash, it can be tempting to pull out the credit card to pay your balance. The same goes for whether you’re looking at this year’s bill or planning ahead with your quarterly estimated payments. Either way, the IRS does allow you to pay with credit cards—but before you do, it’s worth weighing the cost of that convenience.
How the IRS Handles Credit Card Payments
The IRS partners with authorized payment processors to accept credit card transactions. That means you can use major cards like Visa, Mastercard, Discover, or American Express to pay what you owe. But there’s a catch. Unlike retailers who absorb transaction fees as a cost of doing business, the IRS passes those fees on to you.
These fees—called convenience fees—typically range from 1.75% to 1.85% of the total amount you’re charging, with minimums around $2.50. That means a $1,000 tax payment could cost you roughly $17.50 in additional fees. That translates to more money if your total tax bill ends up being higher.
On top of that, if you don’t pay off your credit card balance right away, interest will start to accumulate. With credit card APRs hovering around 20% or more, that tax payment can quickly become a much larger expense.
Pros and Cons of Paying Taxes with a Credit Card
As with any decision, there are pros and cons to paying with a credit card. Weighing your options and being aware of the differences can help you make the right call.
The Upside:
Using a credit card can be a quick solution, especially if you’re close to a payment deadline and need more time to come up with the funds. It can also help if you’re trying to hit a minimum spend for a credit card bonus or rack up points or miles on a rewards card.
The Downside:
Between convenience fees and high credit card interest rates, this method often ends up being one of the most expensive ways to pay your taxes—especially if you don’t pay your card off right away. Plus, the IRS limits credit card payments to two per year per tax form, so it’s not an ideal recurring solution.
Other Alternatives to Consider
If you’re unable to pay your tax bill in full, consider these lower-cost options:
1. IRS Payment Plan:
The IRS offers installment agreements that allow you to pay your balance over time. While there is a setup fee and some interest, it’s typically much lower than what a credit card company would charge. That way, you can save if you won’t be able to pay your credit card bill for your transaction cycle.
2. Plan Ahead for Next Year:
Use this year as a learning opportunity. Adjust your withholdings or make estimated tax payments to avoid the same catch next year. Setting aside a manageable amount throughout the year is easier than scrambling to cover a large balance in April.
Let NSO & Company Help You Make the Right Move
Using a credit card to pay your taxes might feel like a quick fix, but it’s not always the best financial choice. At NSO & Company, we help you assess your options, create payment strategies, and plan ahead so you’re not caught off guard next year. Whether you’re looking to avoid penalties or minimize unnecessary fees, we’ll help you stay in control of your finances—tax season and beyond.
Frequently Asked Questions
Our clients appreciate our fair, transparent pricing — no surprise fees, no confusing invoices. Individual tax returns start at $750, and business returns start at $1,500. If you’d like to talk through your specific situation before committing, a one-hour consultation with a CPA and tax preparer is $250.
Every client’s needs are different, so these starting rates can vary based on the complexity of your return or the scope of services you need. Visit our pricing page for more detail.
If you need accounting, bookkeeping, or tax services, contact us today — we’d love to learn more about your situation and provide pricing tailored to your needs.
We work with a wide variety of individual and business clients across central Indiana. Our clients range from entrepreneurs and small business owners to business professionals, retired individuals, families, and business corporations of all sizes.
Whether you’re just starting a business, managing personal and family finances, planning for retirement, or running an established company, we tailor our accounting, tax, and advisory services to fit where you are and where you’re headed. No two clients are exactly alike, and neither is our approach — we take the time to understand your specific situation so we can offer advice that actually applies to you.
NSO and Company is located in Fishers, Indiana, just off I-69 near the intersection of Lantern Road and 96th Street — an easy, convenient drive from anywhere in the Indianapolis area. Our office is at 8950 Fitness Lane, Suite 100, Fishers, IN 46037.
We’re open Monday through Friday, 8 am – 4 pm, and welcome walk-ins as well as scheduled appointments. If you’d like to speak with someone directly, call us at 317-588-3131.
NSO and Company combines years of experience with personalized service to help individuals and businesses prepare their taxes accurately and on time. We take the time to understand your situation, answer your questions, and look for opportunities to help you maximize your tax savings, while staying compliant and making the process as smooth as possible. Our clients also value our fair pricing and the confidence that comes from working with a trusted local firm.
