For taxpayers that owe Uncle Sam money this tax season, the bite can now be softened a bit, knowing that your payment is getting you one step closer to that Hawaiian vacation you've always dreamed of.
Official Payments Corporation has signed agreements with the IRS and this week announced agreements with a number of states to accept payment for federal and state taxes via American Express, Discover or Mastercard. Official Payments Corporation charges a convenience fee of 2.5 percent of your total tax bill for the service.
If your personal credit card plan provides for frequent flyer miles with charges you make, charging your tax payment may add to the total miles you can earn. Keep in mind that any interest charged by your credit card company on taxes that you place on your credit card account will be in addition to the 2.5 percent fee charged by Official Payments Corporation.
Some tax preparers are recommending the credit card option to their clients. "If I'm paying $10,000 on my credit card for income taxes, it's going to cost me $250. If that $10,000 pushes me to where I can now afford a trip to Hawaii, that's a great investment," says Doug Stives, CPA and tax partner at Wiss & Company, a national accounting firm.
The company's web site indicates relationships with the following governmental entities:
|Internal Revenue Service||Balance-due personal federal income tax|
Estimated and extension tax
|State of Alabama||Balance-due personal state income taxEstimated and delinquent tax|
|State of Arkansas||Balance-due personal state income taxEstimated and extension taxSales and use tax|
|State of California||Balance-due personal state income tax (FTB)Past due, estimated, and extension tax (FTB)Sales and use tax (BOE)Benefit overpayment (EDD)|
|State of Connecticut||Balance-due personal state income tax|
|District of Columbia||Balance-due personal state income taxDelinquent tax|
|State of Illinois||Balance-due personal state income taxEstimated, extension, and delinquent taxBusiness license fees|
|State of Iowa||Delinquent tax and fee payments|
|State of Kansas||Balance-due personal state income taxRetailers' sales tax|
|State of Maryland||Balance-due personal state income taxDelinquent tax|
|State of Minnesota||Balance-due personal state income taxEstimated and delinquent tax|
|State of New Jersey||Balance-due personal state income taxEstimated and extension taxesDeficiency paymentsFiduciary taxBusiness sales and use taxGross withholding tax|
Unemployment and disability contributions
|State of New York||Balance-due personal state income taxEstimated and extension tax|
|State of Ohio||Balance-due personal state income taxEstimated and extension tax|
|State of Oklahoma||Balance-due personal state income tax|
|State of Virginia||Balance-due personal state income tax|
|State of Washington||Business sales and use tax|
|State of West Virginia||Coming soon:|
Various Taxes & Fees
|State of Wisconsin||Coming soon:|
Various Taxes & Fees
|200+ Counties and Municipalities||Property tax|
|400+ Counties and Municipalities||Traffic violations, parking citations, and other fees|