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CardRatings.com Launches 2021 Guide to Credit Cards and Taxes
Experts weigh in on the pros and cons of paying tax bills with a credit card, and more, in this new guide FOSTER CITY, Calif., Feb. 25, 2021 /PRNewswire/ --
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[{"type":"text","content":"Experts weigh in on the pros and cons of paying tax bills with a credit card, and more, in this new guide\n\n\nFOSTER CITY, Calif., Feb. 25, 2021 /PRNewswire/ -- As millions of Americans embark on the dreaded annual task of filing taxes, CardRatings.com introduces a new guide to help navigate issues surrounding credit cards and the IRS. The leader in online credit card ratings answers tricky questions that include, \"Are my credit card rewards taxable?\" and \"Is it advisable to pay taxes with a credit card?\" \n\n \n \n \n \n \n \n\n \nFind the new resource here: 2021 Guide to Credit Cards and Taxes \nAre credit card rewards taxable?\nSometimes credit card rewards have to be reported to the IRS; other times, it is not necessary. Typically, the IRS views credit cards as rebates and most rewards are not taxable, according to experts. \nOne example of a taxable credit card reward is when money wasn't spent to earn that reward. For instance, some introductory offers for new credit cards don't require any spending to reap the reward. \nIs it a great idea to pay taxes with a credit card?\nThis can be confusing for both tax filers and tax accountants. There are pros and cons to paying taxes with a credit card. \nOne of the attractive \"pros\" to paying taxes with a credit card is the ability to earn rewards, but credit industry specialists usually advise against using credit cards to pay taxes just to earn some every day rewards; that's because the fees that accompany the tax payment will offset the minimal rewards that could be earned.\n\"Paying taxes with a credit card will incur a transaction fee and in 2021 that fee ranges from 1.96%-1.99% of the amount paid, depending on the service that is used,\" stresses Brooklyn Lowery, CardRatings' senior managing editor and credit card expert. \"Paying that fee to earn just 1% back likely isn't wise, but paying the bill and earning a good-sized signup bonus that will be worth more than the fee when redeeming the rewards is perhaps worth considering.\"\nHere are the best credit cards to pay taxes and the reasons why they're the best choices: \nChase Sapphire Preferred Credit Card: The cardholder must spend $4,000 in three months to earn the signup bonus, and that bonus could be worth a great deal thanks to all the Chase Ultimate Rewards travel partners. Discover It Cash Back: Discover matche...