Paying Taxes and Turbo Tax Convenience Fee With a Credit Card — What Is the Turbotax Credit Card Convenience Fee?

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  • You can pay taxes with a credit card through third-party providers or with Turbo Tax — not through the IRS website.
  • Paying taxes with a credit card to earn a big sign-up bonus or reward points only makes sense if the value exceeds the credit card fee you will be charged.
  • This article was reviewed for accuracy and clarity by Paul Rosa, an expert on Personal Finance Insider’s tax review board.
  • See Personal Finance Insider’s picks for the best tax software »

You can pay your taxes with a credit card, but that doesn’t mean it’s always a good idea. 

The IRS allows you to pay with a credit card through third-party partners or when you e-file your taxes through online tax services, like Turbo Tax.

Paying taxes with a credit card isn’t free, but sometimes it could make sense. Here’s how to figure out what’s best for you.

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Can you pay taxes with a credit card?

The short answer is yes, you can pay what you owe in taxes to the IRS with a credit card. You can also use a credit card to pay quarterly estimated tax payments, which are most common for people who are self-employed or who have freelance income.

Some states, cities, and counties allow you to pay income and property taxes with a credit card as well.

Does it cost anything to pay taxes with a credit card?

The IRS works with three payment processors to handle tax payments made via debit or credit card: PayUSAtax, Pay 1040, and ACT (ACI Payments) Payments. There are also options for paying your tax bill with a credit card when you e-file

Debit card payments require a small flat fee, but you can just as easily pay your taxes with a bank account transfer for free. In most cases, that will be the better option. 

For paying your taxes with a credit card through a third-party processor, you’ll pay the following convenience fees:

  • PayUSAtax: 1.85% fee with a $2.69 minimum fee
  • Pay1040: 1.87% fee with a $2.50 minimum fee
  • ACI Payments (formerly OfficialPayments): 1.98% fee with a $2.50 minimum fee

If you pay your taxes with your credit card when you file online through tax software, the fees typically start at 2.49% but could be even higher. 

Paying TurboTax convenience fee with a credit card

You can also pay taxes with a credit card using tax-preparation tools like TurboTax Tax Software. TurboTax charges a credit card convenience fee of 2.49% to pay taxes when you e-file. That’s not worth it in most cases, as the fees you’ll pay will likely outweigh the credit card rewards you’ll earn.

There’s a workaround if you’d rather avoid the 2.49% convenience fee TurboTax charges for credit card payments. When you file your return through TurboTax, choose the “pay by check” option. Then, once you’ve e-filed, go to one of the IRS-approved payment processors and use your credit card to pay with a lower fee (1.85% to 1.98%, depending on the processor).

While this adds an extra step to your tax filing, it’s worth it if you have a large tax bill and you want to pay by credit card with the lowest fees. You can also use this method if you’re preparing a paper return instead of e-filing through TurboTax. In that case, you won’t have the option to pay by credit card through TurboTax; just select “pay by check” and proceed to your preferred IRS-approved payment processor to pay your taxes by credit card.

When not to pay taxes with a credit card

Deciding whether it makes sense to pay an extra fee when filing your taxes depends on your card’s rewards and your ability to pay it off before the next statement due date.

If you can’t pay off your balance in full every month, you should avoid paying your taxes with your credit card. With average credit card interest rates around 20%, it is better to set up a payment plan with the IRS than pay huge interest charges from your credit card (not to mention the convenience fee). Interest rates associated with an IRS payment plan will be around 5% or so.

The first question CPA and author Michele Cagan would ask someone who wants to pay taxes with a credit card is why they want to do that. “Look into a payment plan instead because you’ll probably pay less in interest and fees,” she says. Cagan also notes that even with IRS penalties for not paying your taxes on time in full, “it still comes out to less than letting the balance ride on a credit card.”

If one of your credit cards is offering an introductory 0% APR, it might be tempting to use one of these offers to spread out tax payments without incurring big interest charges.”If you know you could pay it within three months but you can’t pay it now,” Cagan says, paying with a zero-interest credit card might give you a net savings. “The credit card fee is based on the amount of your tax bill, so you have to weigh the amount of the fee against everything else,” she adds.

But be very careful if you pay with a zero-interest card. You’ll still need to make at least the minimum payment each month, and if you don’t pay off the balance before the promotional period ends, you’ll end up with high-interest debt. This payment strategy makes the most sense if you know you have a bonus or other chunk of money coming that’s too late for your tax deadline but will allow you to clear the balance before the card charges you interest.

If you have a large tax bill, paying by credit card could also impact your credit score, because your credit utilization ratio is a big factor that determines your score. Credit utilization rate is the percentage of your available revolving credit (such as credit cards) that you are currently using. For example, if you have $10,000 worth of credit across all your credit cards and your balance is $2,000, your credit utilization rate is 20%. To preserve your credit score, it’s a good idea to keep your credit utilization rate under 30%. If you need to get a mortgage or car loan in the near future, an IRS payment plan might be a better option than paying by credit card.

When to pay taxes with a credit card

If you do pay your balance off in full and on time every month, you could be a good candidate to pay your taxes with a credit card — but only if the rewards are bigger than the fee. 

Another reason it might make sense to pay your taxes with a credit card is if you need to spend a certain amount of money to unlock a rewards credit card welcome bonus. But this only makes sense if the rewards are worth more than the cost of the credit card fee. “If you will pay the credit card off before you incur any interest,” says Cagan.

With the right rewards credit card, you could come out ahead, or at least break even. For example, if you have a cash-back credit card that gives 2% back on all purchases, that will cover the fees charged by the IRS processors (though not the fees through tax software like TurboTax), as long as you pay off the balance before interest accrues. You won’t come out ahead in this situation, but it could help you out if you don’t have cash on hand when your taxes are due but will have the money soon after.

You could also benefit from paying your taxes on a credit card if you’re in a bonus rewards period for a new card. For example, suppose you have a card that will give you a $200 bonus for spending $500. If your tax bill is about $500, you’ll pay about $10 in processing fees, leaving a net reward of $190. Likewise, if your payment will give you enough points to redeem for a flight or hotel worth more than the IRS credit card fee, you could come out ahead. But do the math carefully first, to ensure the rewards are greater than the fees you’ll incur. 

Just make sure you’re also practicing good financial discipline, like paying your balances off in full each month, making payments on time, and not spending more than you can afford to pay back. Basically, treat your credit card like a debit card.

When in doubt, pay your taxes the free way — by using a direct bank account transfer.

Alternatively, if you’re using your taxes to hit the minimum spending requirement to earn a credit card sign-up bonus, you might end up getting a value that far exceeds the tax-processing fee you paid. But if you don’t earn rewards or their value is less than 1.85%, you should only use a card if it will get you over the hurdle for a bonus. Otherwise, you will spend more than you get back in rewards!

There’s just one other circumstance where it might make sense to pay your taxes with a credit card: If you don’t have the money to pay and the IRS won’t set up a payment plan for you. According to Cagan, that could happen if you haven’t filed all your back taxes. Even in that case, making some payment with cash (not credit) is worth it. “Any amount you pay is less that you’re going to have interest on,” she says.

How to pay taxes with a credit card

Paying your taxes with a credit card is easy and only takes a few minutes. Head to or directly to your preferred payment service (listed above).

When you get there, you’ll need to enter your tax ID (Social Security number or Employer ID Number) as well as your credit card number, billing information, and a few other details.

After you pay, make sure to print out a copy of your receipt or save it as a PDF and keep it with your tax return. The IRS recommends holding onto copies for at least three years — the typical length of time the IRS would look back if you happen to get audited. If you find yourself in a situation where you’ve overpaid, you can always get excess payments back with a refund.

The financial takeaway

If you don’t have enough cash to pay your taxes in full, set up a payment plan with the IRS instead of using a credit card. You’ll pay three to four times more interest to your credit card company than you would to the IRS.

It only makes sense to pay by credit card if you earn enough rewards from your card to outweigh a processing fee 1.85% or more and you have the cash to pay off your balance before you incur any interest.

The bottom line is, you’re probably better off paying the IRS by check or bank transfer (both free) than a credit card in almost every circumstance.

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