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Property tax vs Income tax: how do they differ? Paying property taxes differs from paying other taxes, such as federal or state income taxes, in a few important ways. Here’s a breakdown of the key differences in terms of payment process, deadlines, and methods.
Payment Process
Income Taxes
Federal and state income taxes are typically paid to the IRS and state revenue departments, and the process for filing and paying is standardized nationwide. Payments can be made through the IRS's online system or by using IRS-approved third-party payment processors.
Property Taxes
Property taxes are managed and collected at the local level, usually by county or municipal tax authorities. The specific payment process can vary depending on where you live.
Many local tax offices provide online portals for payments, but others may require payments through specific third-party payment processors or even only accept checks by mail or in-person payments.
It’s essential to check with your local tax authority’s website for the correct method of payment.
Payment Deadlines
Income Taxes
The deadline for federal income tax payments is typically April 15 each year (or the next business day if April 15 falls on a weekend or holiday), with extensions available until October.
For quarterly estimated taxes, the due dates are generally in April, June, September, and January of the following year. State income tax deadlines generally align with the federal schedule, though there may be slight variations.
Property Taxes
Property tax deadlines vary significantly by locality.
Many areas have semi-annual or quarterly due dates, with the most common schedule being payments due in two installments—one in spring and another in fall. Some areas also offer monthly or quarterly installment plans.
It’s crucial to check your local tax office’s website for the exact due dates to avoid late fees or penalties.
Paying Your Taxes with a Credit Card
Income Taxes
You can pay federal income taxes with a credit card through one of the IRS-approved payment processors: PayUSAtax, ACI Payments, Inc., and Pay1040.
All three payment processors charge a percentage-based fee on the payment amount for credit card transactions. For example, PayUSAtax charges 1.82%, while ACI Payments, Inc. charges 1.98%.
Property Taxes
Some counties and municipalities may not accept credit cards for property tax payments. Among those that do, however, the fees will vary by locality and payment processor but are usually percentage-based as well, often ranging from 1.8% to 2.5%.
Some localities may also work with specific third-party vendors that set their own rates. Paying by debit card can reduce fees to a flat rate, typically around $2–$4 per transaction.
Tip: Using the payment service Kasheesh can let you pay your taxes with a credit card while avoiding the higher credit card fees.
Also consider:
Payment Plans
Income Taxes
The IRS offers installment agreements for taxpayers who can’t pay their balance in full. These agreements allow taxpayers to make monthly payments over time and can be set up directly through the IRS for a small fee, plus interest on the unpaid balance.
Property Taxes
Many counties offer property tax installment plans, allowing homeowners to pay smaller amounts each month rather than paying in large semi-annual installments. These plans vary significantly between localities, so if you need an installment option, contact your local tax office or check their website for details.
Using Kasheesh For More Flexible Tax Payments
If you want to use a credit card to pay either federal taxes or property taxes, Kasheesh can help streamline the process and reduce the associated fees.
Kasheesh provides a clever way to avoid the high credit card fees by generating a virtual Mastercard debit card, which allows you to link any of your credit cards as the funding source.
This means that when you make a tax payment, the processor treats it as a debit card transaction, applying the lower debit card fee, while Kasheesh seamlessly charges your credit card in the background.
Another key advantage of Kasheesh is its flexibility to split a tax payment across multiple cards—whether credit, debit, or even prepaid gift cards—and allocate specific amounts to each. Kasheesh merges these cards into a single digital Mastercard debit “super card” to simplify the process.
By letting you split payments across multiple cards, Kasheesh enables you to:
- Use credit cards strategically to maximize rewards and hit multiple spending requirements for bonuses on several cards
- Manage large tax payments by spreading them across multiple payment methods.
- Use a mix of debit and credit cards for ultimate flexibility.
- Avoid the higher credit card fees, since payments through Kasheesh register as a debit card transaction.
It’s also worth noting that Kasheesh typically charges a 2% processing fee. However, you can avoid this fee by making tax payments during one of their regular promotional periods.
Kasheesh runs “no fee” or “reduced fee” promotions for a couple of weeks each month (check the blog for updates), which is a great opportunity to make your income or property tax payments while avoiding credit card fees.
Conclusion
Property taxes require navigating local tax offices and payment processors, with varied due dates and payment methods. Knowing these differences helps you manage both your income and property tax obligations smoothly, ensuring you stay on top of your finances.
Both federal and property taxes can often be paid with a credit card, but the process, fees, and deadlines differ. Using Kasheesh can help you avoid the credit card fee while paying both income and property taxes with one or multiple credit cards.
Not using Kasheesh yet? Split your taxes across multiple credit cards:
Also consider:
- How to Pay Federal Taxes with a Credit Card
- Best Way to Pay Taxes With a Credit Card
- Can’t Pay Your Taxes? Here’s What To Do
