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Is Paying Your Taxes With a Credit Card Wise?

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    I'll admit, there have been times in the past where I have used a credit card to get me out of a financial pinch. I mean, that's one of the reasons why they are there, emergencies. I came across an article that weighed in on the pros and cons of using a credit card to pay your taxes, and I think it all comes down to your number of options and intent.

    We pretty much all know that the IRS will take your taxes in a number of different ways, checks, electronic transfers, credit, debit, your first born, and blood. All joking aside, we have a number of options, but what if you only have one? See, there lies the predicament. You may be escaping a possible audit, but you're also trading one devil for another if you aren't careful. Paying your taxes with your credit card could really hurt your finances and credit score, especially if the balance sits long enough to accrue interest. According to the article, the average interest rate on a credit card is at 17.6%, which is a record high. Just remember, it isn't free to pay your taxes with a credit card.

    For those who aren't limited to just their credit card, theres an upside to using it. Say you have enough cash to pay it and you have an open card just collecting dust and not rewards. You could use that opportunity to literally reap the rewards that you get on your card by quickly putting the balance on and paying it off.

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    I ran into a bit of a pickle back in 2014 when I filed my taxes for the first time as a private contractor. If one thing is true, it's that the IRS will figure out a way to get their money one way or another. The route I decided to take was enrolling in a payment plan directly with the IRS. They let me choose my monthly payment and the rest is history. Four years later I was no longer indebted to the U.S. Government!