According to my pal Ben Franklin, “Nothing is certain except death and taxes.” Did you know you can pay taxes with a credit card? Before I jump in – you will accrue a fee. However, you must consider, is the fee less than the value of the perks you could receive by paying with a credit card. Let’s balance out the costs and benefits:

Why Would you Pay Taxes with a Credit Card?

Reason 1: To earn points.

As of the date I am writing this article (2/17/25), there are two payment processors that the IRS allows you to pay taxes online through. They are Pay1040 and ACI Payments, Inc. Check out the IRS website here.

First things first, using a credit card to pay your taxed requires a processing fee—resulting in your taxes costing more. If you’re earning 1 point per dollar spent on your credit card and your processing fee is 1.87%, it’s likely not worth the trouble. It would only be financially worth the fee (and hassle) if you’re earning 2+ points per dollar, or even better, working towards a valuable welcome offer.

Reason 2: To Earn a Welcome Offer

Even better than earning points for spending, there may be a card that you wouldn’t typically open because you wouldn’t naturally be able to meet the spending requirements to earn a welcome offer. If you couldn’t typically meet an $8,000 or $10,000 minimum spend (example: spend $10,000 in 3 months to earn a welcome offer) on normal expenses, paying your taxes on a credit card may allow you to earn a huge chunk of points! I’ll suggest some great cards with high welcome offers at the end of this article.

Practical Tips for Success

1. Calculate the cost

Each company that you can use to pay with your credit card has fees that you will accrue by using them. They are:

Pay1040 (1.75%, Minimum fee $2.50)

ACI Payments, Inc. (1.85%, Minimum fee $2.50)

Calculate the opportunity cost. If you are paying $10,000 in taxes using Pay1040, you’ll pay $175 in fees. If you were to charge $10,000 to a credit card that earns 1x on each purchase, you’d earn 10,000 points. The cash value of 10,000 points is $100. Of course, you may be able to maximize value by tranferring to travel partners, however, you could probably choose a better card. If you were to charge your taxes to a card that earned 2x per dollar spent such as on the Capital One Venture Rewards Credit Card you’d have 20,000 miles (cash value – $200 in rewards). Is that worth more than a $175 fee – sure! Especially, when you are transferring the points to valuable travel partners.

BUT, if you are working on a minimum spend that will allow you to earn the rewards for meeting spending requirements AND a generous welcome offer, you may earn over $1,000 in free travel. That’s certainly worth a $175 fee!

2. Pay Off Your Credit Card Balance in Full

To ensure that the convenience fee and any potential interest do not erode your rewards, make sure to pay off your credit card balance in-full and on time.

3. Keep Records

Document your tax payment and the convenience fee for future reference and for tracking your rewards accurately. This will help you evaluate the overall benefit and manage your rewards effectively.

Use your points!

If you’re earning points, don’t forget to use them! You can almost always get more value from your points by transferring points to travel partners. The four major banks each have their own travel partners. Here is a link to my free travel partners guide and comparison chart.

In Conclusion:

By strategically paying taxes with a credit card, you can meet minimum spend requirements and earn huge amounts of points. While the convenience fee is a factor to consider, the potential benefits of earning points and unlocking sign-up bonuses can make this a smart move for savvy travelers. If you’re going to pay your taxes (and you are), you might as well get a great trip out of it! I DEFINITELY recommend calculating the fee versus the rewards to ensure that the benefit is worth it! It won’t be for everyone.

Card Recommendations

Here are some suggested cards with higher than usual minimum spend requirements. They might be a perfect fit for the added expense of paying taxes: