It's important to pay your taxes to avoid interest and
penalties. But using a credit card can be costly as well. What's
the best move for cash-strapped taxpayers this month?
In the following video, Dan Caplinger, The Motley Fool's
director of investment planning, runs through the pros and cons
of using a credit card. Dan notes that not paying the IRS incurs
underpayment interest of 3% annually plus a 1/2% monthly
failure-to-pay penalty. Yet Dan also notes that credit card
payment fees range from 1.87% to 2.35% upfront, not including the
interest charges you might have to pay on your card. As a result,
Dan concludes that in some cases, not paying might actually cost
less than using a credit card, but you have to be careful in
navigating the IRS's ability to collect taxes.
Take advantage of this little-known
Recent tax increases have affected nearly every American
taxpayer. But with the right planning, you can take steps to
take control of your taxes and potentially even lower your tax
bill. In our brand-new special report "
The IRS Is Daring You to Make This Investment
The IRS Is Daring You to Make This Investment Now!," you'll
learn about the simple strategy to take advantage of a
little-known IRS rule. Don't miss out on advice that could
help you cut taxes for decades to come.
Click here to learn more.
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