Credit Cards Can Help Last Minute Tax Filers!
What’s a taxpayer to do who has yet to pay Uncle Sam before Tuesday night’s tax filing deadline?
If you ask Link2Gov and Official Payments, the two vendors authorized by the IRS to accept credit card payments, just charge it to plastic.
You may earn points, miles or money back for every tax dollar you pay,” Official Payments boasts in one of its advertising spots. “You may even gain the flexibility to pay over time.”
Last year, 2 million taxpayers paid taxes with credit cards, up 36 percent from 2005, according to the IRS. The trend bodes well for electronic payment services companies such as Nashville-based Link2Gov, which collects a “convenience fee” equal to 2.49 percent of the taxes you pay — roughly $31 on its average tax transaction of $1,250.
Before you reach for your wallet, you may want to consider how quickly you’ll be able to repay that debt, and calculate the cost of potential interest payments compared with other options such as setting up an installment payment plan with the Internal Revenue Service.
This can be convenient if you’re going to pay off the full credit card balance in 30 days. If you’re not, you need to look at the interest rate on the credit card. That can be much more expensive.
Have Fun filing your taxes!