| It's that time of year again. Business owners hunt for | | | | is 1% of your due balance and $10 on a $1,000 balance. |
| receipts, students fill out financial aid forms and | | | | Another option is to pay via credit card. By using your |
| consumers run for the border. Tax season has | | | | card, you buy yourself more time to pay off your |
| become the woe of the middle class and savior of | | | | taxes. But before you whip out the plastic, consider the |
| low-income college students. When you roll out that | | | | consequences of using your card for taxes. The |
| Rolodex or download that software, remember that | | | | advantages of using a credit card is the prolonging of |
| you have plenty of options. Accountants, deductibles, | | | | your payment and the reward points you could |
| even your payment methods are a matter of choice. | | | | acquire. Be sure to check the restrictions on what |
| Just remember that each choice holds a risk. | | | | counts for reward points. Some credit card companies |
| There are several alternatives when it comes to | | | | do not deem paying a tax bill worthy of reward points. |
| paying your taxes. You can pay, on time, via check. | | | | A major disadvantage of charging your income taxes |
| Don't have the money? You can negotiate a payment | | | | on your card is that it will be subject to interest. This |
| plan. The IRS tax payment plan charges monthly | | | | interest is typically much higher than the 1% - 10% you |
| interest and a one-time fee of up to $105. You can | | | | would owe the IRS if you paid late. The IRS also |
| lessen the fee if you have low income or set up a | | | | charges a convenience fee for using a credit card. |
| direct debit payment. To set up a monthly payment, file | | | | This fee varies and is dependent upon the service |
| a Form 9465. Unlike most normal lenders, there is a | | | | provider. It can vary from $1 - $3.95. |
| time limit. If you work out a payment plan with the IRS, | | | | Know that if you use your credit card to pay your |
| you are expected to pay the balance, in full, within | | | | income taxes, your card issuer may consider you as a |
| three years. | | | | risk. Many companies would take a consumer paying |
| If, for whatever reason, you can not pay your taxes | | | | his or her taxes as a sign that the person is financially |
| on time, you may qualify for an extension. If you can | | | | struggling. As a result, your interest rates will go up. Not |
| prove to the IRS that you can pay your taxes by a | | | | only will you be paying interest on your taxes, you will |
| certain time they can give you an extension from 30 | | | | pay a much higher interest than originally intended. If |
| to 120 days. If you do not qualify for an extension, | | | | you can't pay your bills and file for bankruptcy, you can |
| there is always the option to pay late. The monthly fee | | | | not bankrupt your tax debt. |