Friday, March 03, 2006

Should You Charge Your Tax Bill?

In a nutshell, the answer is no. In 2005 1.5 million taxpayers put their bill on credit. More than double the previous year according to an article in USA Today.

Enhanced rewards from credit card issuers are making the idea even more enticing. Some card issuers are offering double rewards on tax bills paid with their cards. And to use a credit card to pay taxes, you'll have to cough up a fee usually 2.49 percent of federal or state taxes paid to third-party companies that process the transaction. The two companies authorized to accept credit card payments for the IRS are Official Payments and Link2Gov.

It's never a good idea to use a credit card to pay when you can find some other way. Especially considering you'll have to pony up an extra 2.49% just for the convenience.

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