Paying taxes is never a fun task, but it does not have to be a missed opportunity. Did you know that paying your taxes with a credit card can help you earn valuable rewards like points, miles, or cash back? Whether you are trying to meet a big sign-up bonus or simply want to earn extra rewards on a necessary expense, this strategy could be a game-changer for your financial and travel goals.

In this guide, we will explore how to pay your taxes with a credit card, including the steps involved, the potential fees, and strategies to ensure it is worth your while. By the end, you will know how to turn your tax payment into a smart way to maximize rewards — without overspending or creating financial stress.

How To Pay Your Taxes: Your Options Explained

When it comes to paying your taxes, the IRS gives you several options to choose from. Each method has its pros and cons, depending on your priorities — whether that is convenience, cost, or maximizing rewards. 

Here is a high-level look at the different ways you can pay your taxes:

• Credit Card: Paying your taxes with a credit card is a great option if you are looking to earn rewards points, miles, or cash back on the payment. You can use this method through IRS-approved payment processors, but keep in mind that there will be a processing fee (typically 1.85% to 2.49% of your payment).
• Debit Card: If you want a low-cost option, paying with a debit card is a solid choice. The processing fee for debit card payments is much lower than for credit cards—usually a flat fee of $2 to $3 per transaction.
• Direct Pay From A Bank Account: For those looking to avoid fees entirely, using the IRS Direct Pay system is a fee-free way to pay your taxes directly from your checking or savings account.
• Electronic Funds Withdrawal: If you are e-filing your tax return, you can set up an electronic funds withdrawal directly through the tax filing software. Like IRS Direct Pay, this method is free of processing fees and simplifies the payment process when filing your taxes.
• Mailing A Physical Check Or Money Order: Prefer to stick with tradition? You can always mail a check or money order to the IRS. This method does not involve processing fees, but it takes longer and requires a bit more effort.

Best Credit Cards To Pay Your Tax Bill

Choosing the right credit card to pay your taxes can significantly enhance the value you get from the transaction. While co-branded airline and hotel cards are great for achieving elite status or earning specific travel perks, flexible rewards cards can offer even broader benefits. These cards allow you to redeem points or miles for travel, statement credits, or even cash, making them a versatile option for tax payments.

Here are some of the best credit cards to consider when paying your tax bill:

Personal Credit Cards

• Capital One Venture Rewards Credit Card (2x Earning)
• Capital One Venture X Credit Card (2x Earning)

Business Credit Cards

• American Express Blue Business® Plus Credit Card (2x Earning Up To $50,000)
• Capital One Spark Miles For Business (2x Earning)
• Capital One Venture X Business (2x Earning)

How To Pay Your Taxes With A Credit Card

Paying your taxes with a credit card can be a smart way to earn rewards, meet spending requirements for a sign-up bonus, or maximize the benefits of the rewards program from a given credit card. However, it is important to factor in the processing fees charged by IRS-approved payment processors.

The IRS partners with two third-party processors for credit card payments: ACI Payments and Pay1040.

Note: payUSAtax is no longer processing federal tax payments on behalf of the IRS.

ACI Payments

ACI Payments is one of the most frequently used processors for paying taxes by credit card, offering competitive rates and a straightforward process.

• Fee Percentage: 1.85% of your payment
• Minimum Fee: $2.50

Here is what the processing fee looks like for different tax payment amounts:

• $1,000 Payment: $18.50
• $5,000 Payment: $92.50
• $10,000 Payment: $185.00

Pay1040

Pay1040 offers the lowest fee percentage of the IRS-approved payment processors, making it a great option for cost-conscious taxpayers who want to minimize fees.

• Fee Percentage: 1.75% of your payment
• Minimum Fee: $2.50

Here is what the processing fee looks like for different tax payment amounts:

• $1,000 Payment: $17.50
• $5,000 Payment: $87.50
• $10,000 Payment: $175.00

Note: Pay1040 shows a 1.75% processing fee on the IRS.gov website, but it appears this processing fee only applies to consumer Visa and Mastercard payment. If you use either a business credit card or an American Express credit card, the fee increases to 2.89%.

Why Use A Credit Card To Pay Your Taxes

Paying taxes with a credit card is not the right choice for everyone, but for savvy credit card users, it can offer several valuable benefits. Here are the top reasons to consider this strategy:

Earning A Large Welcome Bonus

If you have recently opened a new rewards credit card, paying taxes could help you reach the spending requirement needed to unlock a welcome bonus. Many credit cards offer bonuses worth hundreds of dollars — or even tens of thousands of points or miles — if you spend a certain amount within the first few months of account opening.

For example, if your card requires $8,000 in spending to earn a 175,000-point welcome bonus, using your card to pay a $6,000 tax bill is an easy way to hit most of that target. The value of the bonus can often outweigh the processing fee, making this a smart move for maximizing rewards.

Here is the math using a new Capital One Venture Rewards Credit Card: 

Annual Credit Card Fee: $95.00

Tax Payment Fee (on $5,000.00): $87.50

Welcome Bonus: 75,000 points (~$1,500.00 average value)

Category Spend: 10,000 points (~$200.00 average value)

Total Value: $1,500.00 + $200.00 – $95.00 – $87.50 = $1,517.50

Meeting A Spend Threshold For Additional Benefits

Some credit cards come with annual spending thresholds that unlock extra perks, such as a free hotel night certificate, bonus points, or travel credits. Using your tax payment to hit these spending milestones can be a clever way to get more value out of your card.

For example, if your hotel-branded card offers a free night certificate after spending a certain amount in a calendar year, paying your taxes with the card could bring you closer to achieving that goal — while also earning rewards on the payment itself.

Here are a few hotel credit cards which offer Free Night Awards after hitting a specific spend threshold: 

• Hilton Honors American Express Surpass® Card: Spend $15,000 and receive a Free Night Award
• Marriott Bonvoy Bountiful® Credit Card: Spend $15,000 and receive a Free Night Award (up to 50,000 points)
• Marriott Bonvoy Bevy™ American Express® Card: Spend $15,000 and receive a Free Night Award (up to 50,000 points)
• World of Hyatt Credit Card: Spend $15,000 and receive a Category 1-4 Free Night Award

Related: The Best Credit Cards With A Hotel Free Night Award

Earning Elite Status With Airlines Or Hotels

Certain credit cards allow you to earn airline or hotel elite status based on your spending. If you are close to qualifying for status, using your credit card for a tax payment can push you over the finish line.

For instance, co-branded airline cards like those from Delta or American Airlines may offer Medallion Qualification Dollars (MQDs) or Loyalty Points as part of their elite status programs. Similarly, some hotel credit cards allow spending to count toward qualifying nights. Paying a large tax bill can help you achieve these benefits sooner, unlocking perks like complimentary upgrades, free breakfast, or priority boarding.

Here are a few airlines and hotel credit cards which can give your annual status a boost from spending: 

• Citi® / AAdvantage® Platinum Select® World Elite Mastercard®: Earn 1 Loyalty Point per $1 in credit card spend
• Citi® / AAdvantage Business™ World Elite Mastercard®: Earn 1 Loyalty Point per $1 in credit card spend
• Delta SkyMiles® Reserve American Express Card: Earn $1 Medallion® Qualification Dollar per $10 in credit card spend
• Delta SkyMiles® Reserve Business Card: Earn $1 Medallion® Qualification Dollar per $10 in credit card spend
• United Club℠ Infinite Card: Earn 25 PQP (up to 10,000 per year) per $500 credit card spend
• United℠ Business Card: Earn 25 PQP (up to 1,000 per year) per $500 credit card spend
• World of Hyatt Credit Card: Earn 2 Elite Qualifying Nights per $5,000 credit card spend
• World of Hyatt Business Credit Card: Earn 5 Elite Qualifying Nights per $10,000 credit card spend

Buying Extra Time To Pay Your Taxes

If you are not ready to pay your full tax bill immediately, using a credit card with a 0% intro APR offer can give you some breathing room. Many credit cards offer 0% APR on purchases for an introductory period (typically 12–18 months), allowing you to spread out your tax payment without incurring interest charges.

This approach can provide a valuable buffer while still letting you take advantage of the rewards or benefits your credit card offers. However, it is crucial to pay off the balance before the promotional period ends to avoid high interest rates.

Final Thoughts

Paying taxes with a credit card can be a smart strategy to unlock rewards, meet spending thresholds, or gain financial flexibility. However, it is important to approach it carefully to ensure the benefits outweigh the costs.

Always weigh the value of the rewards you will earn against the processing fees you will pay. If the rewards — whether they are points, miles, or perks — offer greater value than the fees, the transaction is likely worth it. Additionally, be sure to pay off your balance in full to avoid interest charges, which can quickly erase any rewards you earn.

When done thoughtfully, paying your taxes with a credit card can turn a necessary expense into an opportunity to achieve your financial or travel goals. Plan ahead, do the math, and make your tax payment work for you. With the right card and strategy, your tax bill could help fund your next adventure!