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Paying USA income, property or other taxes with a credit card

Old Mar 18, 2016, 8:54 am
FlyerTalk Forums Expert How-Tos and Guides
Last edit by: Boraxo
There are three services to pay your U.S. federal taxes: IRS Pay Your Taxes by Debit or Credit Card or Digital Wallet

pay1040.com 1.87% fee on credit (lowered from 1.99% on 01/02/2023). $2.50 flat fee on debit.
payUSAtax.com - 1.82% fee on credit (rate updated 01/03/2024 from 1.85%). $2.20 flat fee on debit.
See this thread about payUSAtax customer service. Many people have reported that they never respond to support requests.
ACI Payments, Inc - 1.98% fee on credit. $2.20 flat fee on debit.

Many states also permit online tax payment; check with your state or this list from MasterCard.

The IRS has a system to view payments, and it's good practice to confirm all payments within a short time frame, so that any rare lost payment issue can be disputed.
Be mindful of time zones if paying on the due date as pay1040.com uses CDT timestamp and payusatax.com uses EDT timestamp.

In general, you're allowed 2 payments per processor above per type of tax (annual and quarterlies being 2 different types, for example). They're not billed as cash advance fees. If 6 payments is not enough to pay your bill you can use a service such as plastiq (2.25% fee). If making multiple payments, it is advised you join here to track your payments link , you will be required to give your banking information and will receive a pin via snail mail
(Confirmed 4/2018 in post #429)

Fees are tax-deductible for C-Corps but not individuals (2018 tax reform eliminated "miscellaneous itemized deductions"). The majority of people will not be able to deduct that expense, check with your accountant.

When making multiple payments at or near your credit limit multiple times, allow yourself 3-5 days between payments for the charge to show up on your card and your bank payment to clear. If you wait until April 15th to make payments, you will only be able to clear the first payment.

Best Credit Cards to use/buy cheap points:
- Any credit card to hit minimum spend and achieve signup bonus or spend thresholds.
- BOA Premium Rewards 2.62% Cashback (Card holder needs to be a Preferred Rewards Platinum Honors member)
- Chase INK Premier 2.5% Cashback on purchases over $5k (Points are not transferable to airline or hotel programs)
- Capital One Venture X 2X Cap One Miles/Points (now transfer to most airline partners at 1:1)
- Amex Blue Business Plus 2X Membership Rewards (capped at $50,000 spend per calendar year)
- Chase United Business Club Card, 1.5X United Miles
- BOA Virgin Atlantic World Elite 1.5X Virgin Atlantic Points
- Chase Freedom Unlimited, 1.5X Ultimate Rewards, paired with a premium card (Sapphire Preferred, Sapphire Reserve, INK Preferred, INK Plus)
- Chase INK Unlimited, 1.5X Ultimate Rewards, paired with a premium card (Sapphire Preferred, Sapphire Reserve, INK Preferred, INK Plus)
- Amex Everyday Preferred 1.5X Membership Rewards, (need to make 30 transactions in a month for 50% bonus)
- Amex Business Platinum 1.5X Membership Rewards on purchases over $5K

Big Spend Bonuses:
- Amex Delta Reserve, spend $60k get 30k bonus miles and 30k MQM
- Citi Hilton HHonors Reserve, spend $10k get free weekend night, $40k, Platinum Status
- Chase Southwest, spend $135k get Companion Pass (WN points are redeemed at $.011, @ 1.87% fee, you're essentially buying the companion pass for $847)
- Chase Ritz Carlton Reserve, spend $10k get Gold Status spend $75k get Platinum Status
- Chase World of Hyatt, spend $15k get one free night

Cash Back cards:
Elan Fidelity 2%
Citi Double Cash 2%

Earn Status/Elite qualifying points:
- American, Delta, Alaska, Hyatt

Pre-Funding allowed:
Amex Charge Cards

Pre-Funding not-allowed:
Chase

Quarterly tax due dates: the 15th of April, June, September, January


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Paying USA income, property or other taxes with a credit card

Old Apr 15, 2013, 7:50 am
  #181  
 
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Trying to make an estimated tax payment at Pay1040.com. Got this message:


Thanks for using Pay1040.com.

We are unable to process your request at this time. Please try again later.


First BB, now Link2Gov? Just because it's April 15?

UPDATE: Tried it again 10 minutes later and it was processed - ST debit card - $2.99 flat fee.

Last edited by DCBob; Apr 15, 2013 at 8:00 am
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Old Apr 15, 2013, 2:08 pm
  #182  
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Yet another reason not to use turbotax online version - reliability. At least you can work offline if you use the CD or download onto your PC. Of course, problems can sometimes be avoided by not waiting until the last minute to file

http://www.washingtonpost.com/busine...057_story.html
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Old Apr 15, 2013, 8:37 pm
  #183  
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Originally Posted by lkar
IRS web site is pretty accurate. The only wrinkle is that the two web sites run by link2gov seem to be a bit more stringent (for me at least) in what cards they recognize as debit.

http://www.irs.gov/uac/Pay-Taxes-by-...-or-Debit-Card
Great link, thanks. And to answer my question more directly, the current winner for credit card payments is https://fed.choicepay.com at 1.88%

Originally Posted by dhuey
I'm going to quote this in full because I think it is an excellent summation of what to consider when deciding whether to pay taxes via credit/debit card. #3 (min. spend) applies to me, so I went ahead and charged a bunch of taxes today.

Thanks, redtop43, for spending the time to help other FTers with this.
To which I add my prior note:

(8) If you can't afford to pay your taxes but want to charge rather than rack up penalties or interest. Depending on the timing of the charge and statement, you can get almost 2-month grace period before interest begins to accrue. And you can then extend that longer by doing a 0% balance transfer to another card. Obviously this will cost more than paying the tax due with cash or perhaps paying the lower IRS penalty+interest on an installment plan, but at least you get miles and don't have to worry about US government breathing down your neck.
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Old Apr 19, 2013, 1:18 pm
  #184  
 
Join Date: Feb 2013
Posts: 212
Someone here asked me to report back as to whether the paper BB checks were received properly. I sent 3 - one to the IRS to pay taxes, one to my state to pay taxes, and one to the IRS for 2013 estimated taxes. This morning I had an email from BB that the estimated tax check was processed.
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Old Apr 19, 2013, 10:07 pm
  #185  
 
Join Date: Feb 1999
Location: Denver CO
Posts: 3,682
Originally Posted by TWA44
I am quite new here but I would like to comment that moving my question which was quite specific to paying the IRS with a paper bluebird check (Post 165 here) from the thread I started (which I believe had the title "Using BB checks I have in hand to pay IRS") to this thread makes it much less accessible.

As people may be rushing to pay taxes, having to read through a twelve page thread entitled "Paying USA income, property or other taxes with CC. [2013]" to find info on paying taxes with a paper BB check is not very direct or intuitive. Anyone trying to check this kind of info will not necessarily look here. Luckily, Groobie posted an answer to my question before it was moved so I had the info I needed easily. Thanks again, Groobie.

If I am speaking out of turn, I apologize, but I do think that someone coming to FT to answer this question would not know to search this thread, because its title does not make the reader think the answer would be here. As a newbie, I surely did not think the info I sought would be here.

Thank you.
I empathize with you. Last month I too had a high-level, technical question buried when it was moved into the back of another thread.

Years ago, back when we wrote FT posts with quill pens, there was zero tolerance for questioning moderator actions. A post like yours would have been removed quickly and a warning issued. It was "Our mods, right or wrong". Now it's different, and I think also the mods have a tougher job. FT is filled with new members (that's good) but a significant number of them are focused mostly on the next hot deal (not so good). Attention spans are down, the pace is more frenetic.

This and some other threads are lucky to have good mods like mia. Even so, I don't agree on every action taken.

if you see something you strongly disagree with, you can hit the red triangle warning sign in a post to alert a moderator. This will let you explain your views and perhaps change the outcome.
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Old Apr 19, 2013, 10:14 pm
  #186  
 
Join Date: Feb 2013
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Thanks, Mountain Trader, for your kind answer. I will keep it in mind as I continue to learn my way around FT. I recently learned a little more about the wikis FT hopes to have up and working - they are up on a few threads and I believe only mods and perhaps selected others have access for now - and they may be a great solution to this problem as well as the more general one of finding info in a long thread. FT really is an interesting community!
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Old Apr 20, 2013, 1:13 pm
  #187  
mia
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Originally Posted by TWA44
...Luckily, Groobie posted an answer to my question before it was moved so I had the info I needed easily.
It is not a coincidence that your thread was not merged until after the question had been answered.

Bear in mind that many members subscribe to threads discussing topics in which they are interested. When a new post is added to that thread all of the subscribers are notified, and this increases the probability of receiving a quick and accurate answer.
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Old Apr 20, 2013, 1:17 pm
  #188  
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Moderator action

When it first became possible to pay US income taxes by credit card many issuers offered bonus points as an incentive, and this topic was appropriate for MilesBuzz!. Now, this has become a routine process and the discussions focus on strategies to lower the transaction fees. Therefore, the thread has been transferred to Credit Card Programs, but a long term pointer remains in MilesBuzz!.
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Old Apr 20, 2013, 1:34 pm
  #189  
 
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Originally Posted by mia
It is not a coincidence that your thread was not merged until after the question had been answered.
Thank you, mia.
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Old Apr 23, 2013, 10:48 am
  #190  
 
Join Date: Feb 2013
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One more data point: The IRS cashed my BB paper check to pay my 2012 tax owed. I learned about it today:
"Your Bluebird check was paid on 4/23/2013."
I mailed it (certified) on 4/12.

Of the four checks I mailed on 4/12, only one has not yet been paid.
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Old Apr 30, 2013, 2:55 pm
  #191  
 
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Originally Posted by DCBob
The IRS doesn't even know the credit card number. It gets paid electronically by the 3rd party payment processor, so ALL IRS refunds are by check or direct deposit to a bank account. ... Note that there is nothing to stop you from overpaying your estimated tax - you will get the excess money back when you file your tax return.
If you file a 1040 and then overpay the amount due, will the difference be refunded in the amount of time it would take for a regular refund? Or is this a special case that takes longer? (For the times I overpay I'd rather use an estimated payment but couldn't do that this year.)
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Old Jun 6, 2013, 6:34 am
  #192  
 
Join Date: Dec 2003
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Has anyone used Value Payment Systems to pay state estimated taxes with a Citi AAdvantage card? I'd like to make sure it gets booked as a sale rather than a cash advance.

Seems an easy way to meet minimum spend for a bonus. They charge 2.25% rather than the 2.49% charged by other processors.

Another processor explicitly says "Will I be charged a cash advance fee? No. Your tax payment will be treated like a retail purchase and not a cash advance." Value's FAQ is not as clear.

EDIT, in an email response Value Payment Systems confirmed they treat a payment like a retail purchase, not a cash advance.

Last edited by richarddd; Jun 10, 2013 at 7:39 pm
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Old Jun 6, 2013, 4:26 pm
  #193  
 
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CapitalOne Venture

I'm very new to the credit card/rewards game (just got my capitalone venture card today). My question is I have installment payments that are do to the IRS and I was wondering if I could use the venture card on the payusatax.com website which has a visa rate of 1.89% and make a profit off the 2 points per one dollar spent. I did the math and would make a slight profit and this will help me get to my initial spend bonus faster along with being more convenient. I understand the site accepts visa, but when I called capitalone today and asked her about things like paying my tax bill or student loans with a credit card she indicated it may be processed as a cash advance depending on the way the card was put through. This would result in significant costs for me. Has anyone been using their venture for irs bills via payusatax.com and did they receive their rewards points for the charge?

Thanks!
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Old Jun 24, 2013, 10:54 am
  #194  
 
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Does anybody have any experience using a Barclay's card to pay your taxes in order to get points or meet a min. spend?
Did you get your points after paying taxes on the card?
Thanks,
Bostonbali
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Old Sep 18, 2013, 5:14 pm
  #195  
 
Join Date: Mar 2013
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Which blogger just did a series on paying taxes with the credit card?

I spent 20 minutes looking for the blog that just did a 5-6 part series on paying taxes with your credit card, debit card, etc... and for the life of me I can't find it. Anyone help please? advTHANKSance
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