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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 Sep 18, 2013, 7:11 pm
  #196  
 
Join Date: Nov 2011
Posts: 6,390
frequent miler?
yerffej201 is offline  
Old Sep 18, 2013, 8:38 pm
  #197  
 
Join Date: Mar 2013
Location: Jackson, WY
Posts: 543
That was it thanks!

That blog is good but tough on an iPad.
Mbcijim10 is offline  
Old Sep 18, 2013, 8:42 pm
  #198  
 
Join Date: Apr 2001
Location: Austin
Programs: AA P4L, WN, BA, DL, UA, HHonors, IHG
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Linky

http://boardingarea.com/frequentmile...s-debit-cards/
Middle_Seat is offline  
Old Jan 3, 2014, 8:18 pm
  #199  
 
Join Date: Dec 2011
Programs: United, Delta
Posts: 55
I just qualified for the Citi Platinum Select AA Advantage MasterCard. I need a minimum spend of $3,000 within 90 days to earn my 50,000 miles sign up bonus. I live in Thailand and mostly operate on a cash basis, so this year will be my first ever US estimated income tax payment by credit card. I normally abhor fees, but the sign up bonus is too attractive to forego

Sawasdee Pii Mai! (You guessed it, Happy New Years...)
BillyBaht is offline  
Old Jan 31, 2014, 2:01 pm
  #200  
 
Join Date: Nov 2009
Posts: 523
Paying estimated tax by Citi executive card count cash advance?

I have to pay my estimated tax and thinking to pay with citi executive credit card to meet minimum spending in one shot. This will cost me around $190. Which is around $80 more compare to GC/BB route. But it will save me lots of trip to grocery store to boy GC and WM to load in BB.

Would citi consider tax payment as cash advance? Hope they don't, but can anyone please confirm?

Thanks.
mak101 is offline  
Old Jan 31, 2014, 2:05 pm
  #201  
 
Join Date: Oct 2013
Posts: 1,322
Several years ago, I used a Citi Dividend card to make large ES payments, and they were not treated as cash advances.
tuphat is offline  
Old Jan 31, 2014, 2:06 pm
  #202  
 
Join Date: Feb 2004
Programs: AA 'kettle', Marriott Gold, ICH Gld, Hertz 5*
Posts: 5,258
1040ES paid by CC is a purchase and generally (always IME and I've been self-employed for 28 years) garners a convenience fee to the intermediary (Official Payments IME) and shows up on the statement as a purchase. I've paid such taxes with a myriad of credit cards over the years, both vanity and not, and they have always showed up as purchases and 'counted' towards promos, spend, etc. I did similar last year with the AA Citi Visa and got the 50K miles per the promo. YMMV.
camachinist is offline  
Old Jan 31, 2014, 2:42 pm
  #203  
 
Join Date: Nov 2009
Posts: 523
Thanks. I will pay it by Citi CC.
mak101 is offline  
Old Jan 31, 2014, 10:06 pm
  #204  
 
Join Date: Mar 2013
Posts: 11
Overpaying taxes to meet minimal spend

I've been reading the FAQ on payusatax and it says:
34.What if I accidentally paid more than I owe?
In most instances, the IRS will refund an overpayment once the return is received and processed. An overpayment may be used to settle or offset an existing debt on the taxpayer's account.

What do you guys think about quickly meeting min spends by making tax payments to the IRS and then getting cash refunds? Any chance the IRS may hold the money?
vlru is offline  
Old Jan 31, 2014, 10:44 pm
  #205  
 
Join Date: Jul 2012
Programs: Delta Gold, Alaska Gold 75K, LATAM Black
Posts: 3,393
Overpaying taxes to meet minimal spend

Never play money games with the IRS

Imho
Mauibaby2008 is offline  
Old Feb 1, 2014, 5:40 am
  #206  
 
Join Date: Nov 2013
Programs: UA 1K, Marriott Gold, Hilton Gold
Posts: 223
I used other Citi cards to pay estimated taxes, and they always were coded as purchase.
mdpdjx is offline  
Old Feb 1, 2014, 9:19 am
  #207  
 
Join Date: May 2010
Location: SoCal
Programs: SPG PLAT, AA Plat (2MM), BA, UA/CO
Posts: 443
Originally Posted by vlru
What do you guys think about quickly meeting min spends by making tax payments to the IRS and then getting cash refunds? Any chance the IRS may hold the money?
Even if the chances are small, I can't imagine having to deal with the IRS to get it back. I have a feeling that they hire and take advice from the folks who run Netspend...
xlax is offline  
Old Feb 1, 2014, 9:19 am
  #208  
 
Join Date: Mar 2013
Posts: 274
Just lower your cash advance limit to $0. If it goes through, no cash advance. If it doesn't, no cash advance.
TKKY is offline  
Old Feb 1, 2014, 9:39 am
  #209  
 
Join Date: Mar 2007
Location: S Cal
Programs: AA Lifetime Plat, United Silver, Marriott Plat, IHG Plat
Posts: 1,142
Originally Posted by vlru
What do you guys think about quickly meeting min spends by making tax payments to the IRS and then getting cash refunds? Any chance the IRS may hold the money?
I think a strategy such as this works best if you pay quarterly estimated tax, particularly in a low interest rate environment such as we have now. And it's best to apply it early in the year. For example, let's say you overpay your final 2013 estimate in early 2014. You know that your first 2014 estimate will come due on April 15, 2014. If you have overpaid taxes for 2013, rather than request a refund on your 2013 tax return, you can just apply the overpayment to your first 2014 estimate.

Yes, you are losing the interest you might earn on those funds for the first few months of 2014 if those funds had been deposited in an interest-earning account. But with interest rates this low, that interest that you are losing amounts to peanuts. And that interest is taxable peanuts - if you are in a high enough tax bracket, you are actually only losing a portion of those peanuts. (Of course, if you had other and better uses for the funds, you sacrifice the opportunity to apply those funds elsewhere.)
GetawaysRus is offline  
Old Feb 1, 2014, 10:39 am
  #210  
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Join Date: Jul 2006
Location: Upper Sternistan
Posts: 10,160
Applying an overpayment just moves MS forward.

In my mind, it's fine to overpay quarterly estimates a bit and then get a refund when you file the return. I even did back before MS just to steer clear of penalties (by check!).
josephstern is offline  

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