Pay your taxes with a credit card
By Jeremy M. Simon | Published: April 20, 2007
Editor's note: This 2007 story has become outdated. See updated story on paying taxes with credit cards.
Want to pay your taxes with a credit card? Official Payments -- the payment services partner of the IRS, 26 state governments, the District of Columbia, and more than 2,000 local and municipal government agencies -- makes it easy.Visa, MasterCard, American Express andDiscover credit cards are all accepted.
Using the Official Payments website, taxpayers can also make payments debit cards and electronic checks.
Consumers can pay utilities, education providers and other payment collecting groups in every U.S. state with Official Payments' quick, easy and secure six-step payment process.
Consumers first choose to direct payments to the federal, state and local level. Official Payments is set up so federal payments are for all personal and business taxes due to the IRS. State payments are for all personal, business and other taxes and fees due to a state collecting authority. Local payments are for all local taxes, citations, court fees, utility bills, education costs, parks and recreation fees, permitting and licensing fees and other collection types.
The rest of the process is equally straightforward. Next, you will enter the amount of the payment for the organization you selected previously. Then, Official Payments will calculate and show you the convenience fee based on the information you provided (outlined in greater detail below), as well as their terms and conditions, which you can choose to "accept" in order to continue.
Next, you provide details about yourself and the method of payment, be it credit card, debit card or your checking account. You are then presented with your details for a final confirmation. After you confirm, Official Payments supplies you with a digital receipt.
Official Payments is authorized by its partners to charge the convenience fee to cover the processing costs of your transaction. This fee is collected directly by Official Payments, with government partners or other organizations not benefiting from it in any way.
The convenience fee for federal income tax payment is 2.49 percent of the total payment amount, including penalties or interest. For local payments like property taxes, real estate taxes, utility payments, etc., the convenience fee can vary, although you will be made aware of the fee before paying. Official Payments provides a fee calculator on its website to calculate the convenience fee for your payment.
There are a number of benefits to using Official Payments. Due to its partnerships with many large credit card issuers, Official Payments can offer a number of rewards (listed in the special offers area of its website) for online payments.
Additionally, the convenience of paying online means you can pay from anywhere a phone or Internet connection is available, while eliminating concerns of a payment getting lost in the mail or arriving late. Finally, paying by credit card lets you manage your cash flow more effectively.
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