Taxpayers who use a credit card to pay taxes are charged a convenience fee of 2.35% of the tax bill. This is because the IRS, by law, cannot pay credit card merchant fees to a taxpayer's credit card company. Thus, third-party creditors are required to handle the transaction, and they charge a fee for this service. State income taxes are often processed in a similar manner. Some state and local governments accept credit cards for property taxes, income taxes, and court fees and fines.
Taxpayers will be informed of the amount of the convenience fee before payment to a third-party vendor is authorized. They must also agree to the terms and conditions of the payment including acceptance of the convenience fee. In addition to the convenience fee charged by the third-party provider, taxpayers will owe interest on their credit card if they don't pay the credit card bill in full the following month. When they receive their billing statement, the taxes paid will show on their billing statement as "United States Treasury Payment" and the convenience fee as "Tax Payment Convenience Fee" (or something similar to this).
Third-party creditors also accept debit cards or eChecks that charge a flat fee, often ranging between $3.00 and $4.00. If you choose this method, make sure you have sufficient funds in your checking account to avoid overdraft fees.
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