Federal Tax Question

[nessness]

How much is in your efund currently? Since it sounds like you have a lot of debt and are working to pay it off, I would avoid adding to it if at all possible.

ETA: I think I misread, and you meant that you have $1300 in your efund. In that case, I would do the 3% interest option. 3% interest on $1k isn't enough to justify the risk of putting it on a 0% card, not paying it off on time, and having to pay back interest.

ETA#2: Apparently I suck at reading today, and missed the $120 setup fee. The 0% card is definitely a better choice over that, but you will need to be diligent about paying it off before the 0% expires.

[Deleted]

Are you certain you could/would pay off the credit card? Is $1300 a large chunk of you efund?

If taking it out of savings will greatly reduce your efund I would do the credit card but only if you are certain you could pay it off. If you have a nice cushion in you efund I would be inclined to just pay it off.

[niq]

With the $120 setup fee, your effective interest rate on a payment plan would be more like 15%, right? The CC seems like the winner if you think you can pay it off by February. I would figure out the monthly payment you need on that card and start paying it off right away.

[my3bears]

I vote 0% CC but ONLY if you are diligent about paying off a chunk every month and paying it off entirely by the deadline.

Edit: since technically you could cover it in your e-fund, I would definitely do the CC option. Pay off as much as you can until the 0% expires and whatever chunk is left then take it from the e-fund if necessary.

[magdala]

Aug 22, 2014 12:01:03 GMT -5 my3bears said:

I would definitely do the CC option. Pay off as much as you can until the 0% expires and whatever chunk is left then take it from the e-fund if necessary.

Me too

[msmerymac]

Are you currently employed? How much are you putting in savings each month vs. using to pay off debt?

[dragonfly08]

Aug 22, 2014 12:12:01 GMT -5 magdala said:

Aug 22, 2014 12:01:03 GMT -5 my3bears said:

I would definitely do the CC option. Pay off as much as you can until the 0% expires and whatever chunk is left then take it from the e-fund if necessary.

Me too

Yep.  This is where I'd be, if paying outright would deplete your e-fund too much.  I definitely wouldn't take an option where I had to pay a set up fee and/or interest if I had a fee-free alternative like this.  Just be diligent about making payments, and don't forget to cover the balance if necessary before the 0% expires.

[jwright]

Be careful!

If you pay with a credit card there's at least a 2% fee depending on how you pay. www.irs.gov/uac/Pay-Taxes-by-Credit-or-Debit-Card

Also, you are going to have late payment penalties to deal with. The extension is an extension of time to file not time to pay.

If you run the numbers, the credit card and payment plan will probably cost you the same 3% interest on $880 (with the option to make payments faster and save) vs 2.25% on the full amount?

[mrsfarmer]

As PP said, check how much you actually owe now. This was not an extension to pay.

[v]

There is a fee to pay with a credit card though, right? 3% or something? If so, that should factor into the analysis I think?