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This is miles information, not tax advice. Consult a tax professional before paying your taxes with a credit card.

We’re right around the corner from April, which means Uncle Sam is going to come knocking soon enough. Paying taxes is a significant expense, so you should consider your payment options before mindlessly writing a check. Get something back for carrying out your civic duties.


The following payment processing companies are officially recognized by the IRS:

The above table is from, follow the link for more complete details. Looks like comes in as the winner with the lowest transaction fee of 1.87% for credit cards.

Transactions processed by these companies are classified as purchases, not cash advances. Each of the companies’ websites state it clearly in their FAQ:

Is It a Good Deal to Pay 1.87%?

On the right cards, yes. For instance, the Arrival Plus earns 2 miles per dollar on all purchases, which are worth 1 cent each toward travel. Because of the other intricacies of the card, you get at least 2.1% back on purchases toward travel, meaning you’d turn a small profit on paying taxes with your credit card.

And, you can do much better.

Often the effective rebate on meeting a minimum spending requirement is 20% or more, meaning that if you use paying taxes to open more cards and meet more minimum spending requirements, the 1.87% fee can be a drop in the bucket compared to the rewards you’ll earn.

Meeting Minimum Spends for Sign Up Bonuses

For those of you who aren’t normally big spenders, paying your taxes on freshly opened credit cards is an opportunity to meet spending requirements that earn large sign up bonuses and collect stockpiles of miles and points. This could be especially useful if you have a big redemption in mind coming up for a trip this summer and need to collect fast.

Check out the most lucrative sign up bonuses available right now in Top 10 Personal Travel Credit Cards that you could take advantage of with your increased spending power this time of year.

Credit card links have been removed from posts and added to the menu bar at the top of every page of MileValue under the heading Travel Credit Cards.

Not planning on opening a new card anytime soon?

Otherwise, if you already have one these credit cards open that earns transferrable points, consider putting your taxes on it:

  • Starwood Preferred Guest Personal or Business Card by American Express
  • Chase Sapphire Preferred, Ink Business Preferred
  • Citi Prestige® Card, Citi ThankYou® Premier Card, or Citi ThankYou Preferred
  • Premier Rewards Gold or Premier Rewards Gold Business, Gold or Business Gold Rewards, Green or Business Green, Everyday or Everyday Preferred, or The Platinum and Business Platinum cards by American Express

These are cards that earn a type of transferrable point (either Starpoint, Ultimate Reward, ThankYou Point, or Membership Reward) I value at more than 1.87 cents. Why 1.87 cents? 1.87% is the lowest processing fee consistently available, and as all these cards earn one point per dollar spent, it wouldn’t be worth it otherwise. The transferrable points earned would be a nice way to top off another account if you’re shy a few thousand miles for an award you’ve been eyeing.

The other solid option if you don’t want to open any new cards for sign up bonuses are cash back cards if you already have them:

  • Barclaycard Arrival Plus™ World Elite MasterCard® – earns 2.1% back on all purchases toward any travel expense (including any flight on any airline with no blackouts). 2.10% > 1.87% processing fee, so you come out on top.
  • Discover it® Miles Card – earns 1.5% back on all purchases and Discover doubles that at the end of the first year of card membership (hence this only applies if you opened the card this year), meaning you get 3% back. 3% > 1.87% processing fee, so you definitely come out on top.

Are The Fees for Paying My Taxes on a Credit Card Deductible?

For personal taxes, maybe, and for business taxes, yes. Here is the fine print that applies to making payments through any of the companies listed in the table at the top of this post, taken from

  • The fee is deductible for personal tax types as a miscellaneous itemized deduction. However, only those miscellaneous expenses that exceed 2 percent of the adjusted gross income can be deducted. For more information, refer to Publication 529, Miscellaneous Deductions.
  • For business tax types, the fee is a deductible business expense.

Keep An Eye Out For A Promotion From Plastiq

Sometimes Plastiq offers discounted fees (for example, 1.75%) for paying your taxes with a specific kind of credit card. I believe are sent out to people with accounts. I have received email notifications about the promos in the past. Register now and see if you get the same email this year–a 1.75% processing fee is the lowest I’ve seen:Screen Shot 2016-05-02 at 7.08.14 PM

The asterisk after MasterCard signifies that you can’t pay all types of taxes, only these kinds:

Screen Shot 2016-05-02 at 7.09.40 PM

Bottom Line

You can pay your federal taxes via three different online payment processing companies, all officially recognized by the IRS that process the transactions as purchases and not cash advances. The lowest processing fee is offered by at 1.87%. This opens up opportunities for you to maximize your mile and points earning strategy.

Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.

Just getting started in the world of points and miles? The Chase Sapphire Preferred is the best card for you to start with.

With a bonus of 60,000 points after $4,000 spend in the first 3 months, 5x points on travel booked through the Chase Travel Portal and 3x points on restaurants, streaming services, and online groceries (excluding Target, Walmart, and wholesale clubs), this card truly cannot be beat for getting started!

Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are the author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

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