As millions of Americans prepare their federal tax returns for 2025, many are considering various payment options, including credit cards. The IRS allows taxpayers to pay by credit or debit card through two authorized external services, Pay1040.com and ACI Payments, Inc., each with different transaction fees. Pay1040.com charges a 1.75% fee for credit cards (minimum $2.50), $2.15 for personal debit cards, and 2.89% for commercial cards (minimum $2.50).
They accept Visa, Mastercard, Discover, and American Express. ACI Payments, Inc. charges a minimum of $2.50 for credit cards, $2.10 for personal debit cards, and 2.95% for corporate cards (debit or credit).
They also accept Visa, Mastercard, Discover, and American Express. Payments can be made online or by telephone, and digital wallets like Click to Pay can be used to complete the transaction.
Considering credit card payment fees
However, federal payroll taxes cannot be paid by card, and payments of $100,000 or more may require additional steps or special conditions. While paying taxes by credit card may offer extra time before the payment is due and potential incentives, financial experts warn against this practice. The additional fees and high-interest charges can add up quickly, making it a costly mistake.
For example, paying a $1,000 tax bill with a credit card would result in about $20 in fees, money that could have been saved. With the average credit card interest rate currently just over 20%, the expenses can increase significantly if the balance is not paid off quickly. The IRS offers payment plans with lower interest rates compared to most credit cards for those who need more time to pay their taxes.
Experts also suggest that the rewards earned from credit card payments are often not worth the extra costs associated with IRS surcharges. Taxpayers should carefully review the terms of their credit card agreements and consider all available options before deciding to pay their taxes with a credit card. Careful financial planning can help prevent unnecessary expenses in the future.
