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I read in the newspaper today that the IRS will allow people next year to pay their taxes with a credit card. Right now Visa is the only card company that has not agree too. The taxpayer will pay the 1%-3% transaction cost that the card company adds each time the card is used.

That's all we need now. The feds helping people run up their cards.

-PSU
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I saw this on the news this morning. As I understand it you may use your credit card if filing electronically. The fee charged is based on the amount of taxes owed. Visa is holding out for a flat fee.

I thought the same thing as PSU: that the government is encouraging debt.

Ms Joe
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I don't think the government is encouraging debt so much as coming up with a way to make sure it gets paid on time. In fact, they're pretty slick about it, when you consider that they won't be paying the transaction fee that credit cards charge most merchants. That's right up there with the IRS charging interest for tax due and not paying interest on tax refunds.

Look on the bright side...maybe when people are in the situation where they have to pay taxes on their credit card, they'll realize how deeply in debt they are and try to work toward changing it!

Jen/Amused
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That's all we need now. The feds helping people run up their cards.

PSU

It's all in how you look at it. In the case of Fools they are encourageing frequent flier miles, and rebates. Oops! as I think about this since I have to pay the transaction fee the rebate is a wash. So all a Fool gets out of it ia a more convienent way to pay.

~~paul
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Hey gang,

Look at it this way,

Pay for it with your Discover and get money back
for paying you taxes on time

later

Jeff
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I read in the newspaper today that the IRS will allow people next year to pay their taxes with a credit card. Right now Visa is the only card company that has not agree too. The taxpayer will pay the 1%-3% transaction cost that the card company adds each time the card is used.

That's all we need now. The feds helping people run up their cards.


My state (IN) allowed taxpayers to pay via Discover. It was treated as a cash advance, and was not subject to the cash back bonus. I think there were some other charges in there as well. I didn't pay very close attention to it due to the unfavorable transaction costs.


Mike
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Look on the bright side...maybe when people are in the situation where they have to pay taxes on their credit card, they'll realize how deeply in debt they are and try to work toward changing it!

Jen,

Perhaps you should consider changing your screen name to TMFOptimistic :-)

Mike
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I don't think the government is encouraging debt so much as coming up with a way to make sure it gets paid on time.

Close. The IRS is trying to avoid handling the paper.

Right now, the IRS pays one or more of the lockbox companies to receive payments. [Recall that you send your return to one address if you owe them, a different one if you are due a refund.] If the IRS can debit your credit (or debit) card, they don't have to pay to handle the paper.

Personally, if the IRS can pay my refund with an ACH transaction, why can't I pay my taxes the same way?

Pete
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That's all we need now. The feds helping people run up their cards.

PSU,

I tend to agree with you on this. Actually, I don't understand why they would agree to it, as it would cost the government $ since they would essentially be acting as a merchant, and have to pay a % to the credit card company.

I could see this whole idea as a disaster in the making for a lot of people!

Tony
...but I still am...

Off2Aruba
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On this subject, I wish I could pay my property taxes with my Visa card.

Each year I have to write out a check for over $6,000 to pay my property taxes, and I'd love to be able to get all those miles!

Of course, remember, I don't carry a balance, so this would benefit me. Unless you pay your balance each month in full, I'm against credit cards. ; )

Tony
...but I still am...

Off2Aruba
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<<I tend to agree with you on this. Actually, I don't understand why they would agree to it, as it would
cost the government $ since they would essentially be acting as a merchant, and have to pay a % to
the credit card company.>>

As I recall when this was being booted around the IRS, the arrangement was that the taxpayer would pay the merchant fee. In other words, the taxes would be about 2% more expensive. Don't know if that's in the final regulations.

Crazyfred
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PSUEngineerFool wrote:
<<I read in the newspaper today that the IRS will allow people next year to pay their taxes with a credit card. ... That's all we need now. The feds helping people run up their cards.>>

Wait a minute. This may be a useful tool. Debt to the IRS is worse than a secured mortgage, if you can't afford to pay it. The IRS can take your home, garnish your wages, garnish your spouse's wages, and generally make your life a living hell. A credit card company can really only talk nasty and mess with your credit report.

Of course, you're much better off to arrange to have money to pay your taxes as appropriate. I just wish they'd started this a couple years ago - I pay estimated taxes, and my incoming has been rising for the past couple years, so I'd have gotten a couple hundred dollars in cash-back bonus on my Discover card :-).

Later,
shess
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MsJoeCool wrote:
<<I saw this on the news this morning. As I understand it you may use your credit card if filing electronically. The fee charged is based on the amount of taxes owed. Visa is holding out for a flat fee.>>

Discover is the only card you can use for the direct online method, as Discover doesn't charge a merchant fee (which is why Sam's Club and CostCo and ilk allow it). For the other cards, you're paying a preparation place to do the filing, and they just kick the merchant fee (generally 2-3%) back to you.

The IRS is not allowed, by law, to pay the fee for you.

<<I thought the same thing as PSU: that the government is encouraging debt.>>

No more than home equity interest deductability and 3% down FHA loans.

Later,
shess
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