IRS Provides Credit/Debit Option for Tax Payment

(EstateNewsWire.com, April 11, 2013 ) Kelowna, Canada -- Whether one chooses to electronically file taxes, or if one chooses to go the old-fashion route and paper file them, the IRS will now allow one to use a debit or credit card. However, experts advise that if one has the cash in hand, then it would be wise to use that to pay what is owed rather than a debit card.

Paying taxes with a card through the IRS providers like Official Payments Corporation, Choice Pay, and Pay 1040 is certainly a viable option for some. When one chooses the option one will also have to pay a debit fee, however, which is an additional $3, as well as an additional 2.35% or more on the total debited. If one instead authorize the IRS to debt the total owed directly from savings, the number falls to zero, making the later option the better when one has the available funds.

For those who do not have the cash up-front and available, the choice is clearly different. Through those aforementioned providers, one can charge taxes owed to a credit card. The benefit is of course that it is a safe and secure convenience. One will even earn rewards like travel miles or cash back, depending on the card.

Still, using the option has its toll. Paying through the credit card comes with hefty fees, and if the amount owed exceeds $3,000, the convenience fee for charging your federal tax comes out to $70. Charging $10,000 includes a fee that would constitute nearly $235. Any amount over $40,000 would mean paying almost an extra $1,000 in fees.

For those who owe taxes and are short on the cash, experts advise that creating a payment plan with the IRS is a better option. When all is said and done, making partial payments and creating such a payment plan brings less headache and hardship, unless one simply has to use a card of some type.

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