Tax week is here again! And in a last-ditch effort to boost future e-payment numbers, the IRS recently announced that some taxpayers will now be allowed to deduct the convenience fees card companies charge to process electronic tax payments. The IRS has made it easier than ever to pay your tax bill with plastic, and now you might even be able to deduct the fee, so why not go ahead and settle your debt with Uncle Sam by whipping out your favorite credit card? While the ease of paying online is tempting, paying your taxes with plastic is generally a poor decision. Convenience fees average 2.5% ($125 on a $5,000 tax bill), not everyone will qualify for the miscellaneous itemized deduction (Subject to the 2% limit on Form 1040), and you should never pay taxes on a credit card if you plan on carrying a balance to pay the debt over time. Bottom line? There's probably a cheaper way to dig up the money for your tax bill when cashflow is tight. Try a generous family member first, or visit IRS.gov for more information about payment options.
As mentioned by
Advertiser Disclosure: Creditnet.com is an independent, advertising-supported information and comparison service. Creditnet.com receives compensation from some, but not all of its partners whose offers appear on our site. Compensation from our advertising partners may impact how and where products appear on our site. Creditnet.com has not reviewed, nor does it display, all the credit card offers available in the marketplace. We attempt to keep information on this site accurate, but we make no warranty regarding the accuracy of any of our information, including information on specific credit cards, card issuers, credit scores, credit availability, and comparison or savings calculations. When applying for a credit card, you are advised to read the credit card application and related disclosure on the credit issuer's website for details on current terms and conditions.
Editorial Disclosure: Opinions expressed on Creditnet.com are the author’s alone, not those of credit card issuers. Our content is not provided or commissioned by credit card issuers, and it has not been reviewed, approved, or otherwise endorsed by credit card issuers.
Copyright © 2022 - Creditnet.com - All Rights Reserved