I just did some math on this scenario because I was curious since I under estimated my quarterly taxes for 09 and still have some time to make more on my 4th QTR payment. I used my SPG card as the card to use and the redemption of transferring miles to AA. And assuming you, meaning me, are not a status member with AA, and upgrades are removed from the equations.

Let's say you owed $160,000 in taxes. With the 5k bonus on 20k transfers (transferring several times) from 160,000 points, you'd have 200,000 AA miles.

I just did a redemption flight check for 2 people from ORD>LAS>ORD and a normal rate check for the same flight. It was $3086 for first/biz class and $1662 for economy non restricted. And points wise unless I'm figuring it incorrectly, those are 80k SPG for the econ flight and 160k SPG for the first/biz flight. The redemption ratios for the SPG points come out to be 2.07% for the economy unrestricted and then 1.93% for the first/biz tickets.

So if the official payments site charges 2.35%, and if you are able to deduct all of that as a business expense, let's say at 35%, that takes the convenience charge of the official payments site to 1.53%.

And if the airline miles are "tax free" under Announcement 2002–18 (which reminds me the spg could be better than the plum if the rebate increases your tax liability), then you have come out ahead - 1.93%/2.07% - fee 1.53% = 0.40/0.54%. And do that a few years or also use your spg for more miles and you'd also be on your way towards lifetime gold (or platinum^)!

Did I figure that out correctly? I guess then a question would be whether you would actually spend that same amount of money on the flights.

Now I gotta figure out if it's worth it and also double check with my accountant to make sure it's not gonna come back to bite me