If you've been thinking about paying the IRS the thousands of dollars of income tax you owe by credit card, I would stop that sort of thinking right now! The federal government prepares for the possibility that you may not have the money that is owed to them, so they allow taxpayers to file an extension to pay the debt.
If you file an extension, you'll still have to pay interest on the amount you owe.
But the rate is considerably lower than charging the debt on your credit card.
The Internal Revenue Service within the last few years have become very accommodating when it comes to working with taxpayers.
If the amount you owe is really large, they encourage tax payments by installment plans.
Credit card debt has been an ongoing problem for millions of taxpayers.
The one thing you don't want to do is to add more debt, especially placing the IRS as an additional debtor.
Most credit cards carry a horrendous interest rate anywhere from twelve to twenty-one percent.
If you owe taxes you know you can't pay, there is the temptation to place it on your credit card.
Again, don't!You have a higher interest rate on your credit card, if you apply the lump sum you owe, you'll be financing the debt at a higher interest rate than what you would have had to pay by working with the IRS.
Bottom line, you will end up paying much more in the long run for your taxes by placing what you owe on your credit card.
The IRS will work with you, if you'll just stop putting it off and pick up the phone to discuss your situation.
Try to work with the extensions and lower interest rates they offer.
This avenue is a better alternative than either going into default on unpaid taxes or piling more debt on an already nearly maxed out credit card.