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wc2072
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Registered: ‎03-24-2009
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Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??

I have really made alot of financial mistakes this year.  I find I owe the IRS $17000 on April 15.  I do have a couple of credit cards I can use to pay this, but I am wondering if the installment plan with the IRS would be a better option.  Would someone please discuss the options and hidden costs I may need to be aware of in making this decision?   Anyone with previous experience?
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Creditaddict
Posts: 22,093
Registered: ‎10-23-2007
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Re: Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??

I thought credit card payments come with 3% transaction fee.

What's the installment plan option and fees? 

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haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
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Re: Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??

Sorry to hear about your horrible surprise! :smileysad:

Just in terms of FICO scores, unless you have an insanely high total CL --like $300K+ --popping $17K onto your CC's is going to kill your scores.

I'd check into an installment loan or something.

Plus as Creditaddict mentioned, the service charge for the CC will make it even worse.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
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Pappy214
Posts: 794
Registered: ‎08-05-2008
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Re: Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??

Not just kill your scores but I read recently that using CC's to pay taxes is a big no-no with some CCC's, and can cause an AA.

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Creditaddict
Posts: 22,093
Registered: ‎10-23-2007
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Re: Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??


haulingthescoreup wrote:
Sorry to hear about your horrible surprise! :smileysad:

Just in terms of FICO scores, unless you have an insanely high total CL --like $300K+ --popping $17K onto your CC's is going to kill your scores.

I'd check into an installment loan or something.

Plus as Creditaddict mentioned, the service charge for the CC will make it even worse.


Granted you will loose points, I think many on here get a little dramatic with exactly how bad it will get by slapping on the debt. how far you fall really depends where you start and rather even a 50 point decrease will cross you into a lower level of credit, like falling below 720 or below 680. but if your in 800's it's really not going to matter to fall 50 points in the big picture is it?

 

Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:
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Creditaddict
Posts: 22,093
Registered: ‎10-23-2007
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Re: Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??


Pappy214 wrote:

Not just kill your scores but I read recently that using CC's to pay taxes is a big no-no with some CCC's, and can cause an AA.


I think amex loves you to use there card but only if you pay it off the next month. I pay some of my employee taxes with them.

 

Fico Scores: EQ- 626 Overstck., TU 696 Walmart, EX 695 Chase (11-05-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
Lowest Limit: Target $200
66 Cards and Counting :smileytongue:
Member
wc2072
Posts: 8
Registered: ‎03-24-2009
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Re: Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??

My current score is 750.  I have no idea what an "AA" is.  Wonder what the IRS installment plan does to your score  vs. a higher credit card debt?
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haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
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Re: Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??


Creditaddict wrote:

haulingthescoreup wrote:
Sorry to hear about your horrible surprise! :smileysad:

Just in terms of FICO scores, unless you have an insanely high total CL --like $300K+ --popping $17K onto your CC's is going to kill your scores.

I'd check into an installment loan or something.

Plus as Creditaddict mentioned, the service charge for the CC will make it even worse.


Granted you will loose points, I think many on here get a little dramatic with exactly how bad it will get by slapping on the debt. how far you fall really depends where you start and rather even a 50 point decrease will cross you into a lower level of credit, like falling below 720 or below 680. but if your in 800's it's really not going to matter to fall 50 points in the big picture is it?

 



I can promise that if your scores are in the 800's and your util suddenly jumps, you'll lose a lot more than 50 points! :smileyvery-happy: Don't forget how touchy scores in that range are. I hope to discover this for myself one day...

Nevertheless, a loan for $17K is much more stable on your reports, and much, much, much less terrifying to other banks/ CCC's than suddenly having this pop up on your reports. In this day and age, that is the last thing that I would want to do to my credit.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
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contractor
Posts: 697
Registered: ‎03-09-2008
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Re: Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??

The IRS payment plan is CR neutral as long as you fulfill your obligation. They do however have several fees and interest charges which might add up to a lot more that an installment loan at your CU or Bank (if you can get one nowadays).

 

I would suggest calling the IRS and asking them what the total fees will be. I don't know that they can tell you because their system is mysterious but it doesn't hurt to ask. I pay them what they tell me to pay them and don't understand where they get their numbers. I find this preferable to the Federal Penal System but not by much. Luckily, my goal is in sight, will be glad to end our relationship.

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haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
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Re: Paying taxes by 4/15/09 - credit card or IRS installment plan (OPA)??


contractor wrote:

... I find this preferable to the Federal Penal System but not by much. Luckily, my goal is in sight, will be glad to end our relationship.



ROFLMBO :smileyvery-happy:

We love ya, contractor, hang in there!!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007

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