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Paying income taxes with credit is pricey

Experts say using credit will add a fee to your income tax payment. (AP)

WASHINGTON – Though the federal government allows filers to pay their income taxes with a credit card, financial experts say it is not the cheapest option.

A fee of roughly 2 percent to 2 1/2 percent can be applied to the transaction, according to Smartmoney.com.

On a $5,000 tax bill, the merchant fee a consumer is charged can add up to $118.

The convenience fee in lieu of the fee businesses typically pay credit card companies. In the case of taxes, four vendors handle the credit card transactions for the Internal Revenue Service and split the fees with credit card companies.

For consumers in the D.C. metro area who value an easy process over a few bucks, they live in the right place. Income taxes owed to D.C can be paid with credit. Maryland and Virginia also let you pay your state taxes by credit card.

WTOP’s Veronica Robinson contributed to this report. Follow WTOP on Twitter.

(Copyright 2012 by WTOP. All Rights Reserved.)


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