Taxes and your credit are intertwined.  That may be news to some, but it’s true.  From, here are a few ways that taxes, your credit and your credit score go hand in hand.

1.    Pay your taxes late and that could damage your credit score.  So, does the IRS report to credit reporting bureaus?  No, but if you don’t pay your taxes, the IRS could file a lien against you.  These liens are a matter of public record, and as such, these reports go directly to the  big 3 credit reporting agencies.

2.    The price for paying your taxes with a credit card.  Many people like to pay bills with their credit cards in order to get miles or points of some kind.  Be aware that the IRS will charge a processing fee ranging from 1.89% to 2.49% of the amount of the charge.  Do the math.  The processing fee might end up being more than the value of points or miles that you accrue from the charge. You might be better off paying for the prize outright.

3.    Those same credit card “gifts” might be taxable.  It works like this.  Rewards that are earned through purchases are not taxable, but rewards that are not tied to purchases (bonus mile sot sign up for instance) are taxable.

4.    Forgiven debt is taxable.  If a credit card company negotiated with you and “wrote off” some of your debt, than that amount is taxable.

The lesson here, beyond that fact that the IRS is everywhere, is that you need to be aware of the choices you make regarding your finances and their consequences.  You don’t want to be surprised.