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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 Feb 1, 2014, 10:56 am
  #211  
 
Join Date: Apr 2005
Location: NYC
Posts: 1,756
So when can you start paying estimate for 2013?
yoyo is offline  
Old Feb 1, 2014, 11:36 am
  #212  
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Join Date: Jul 2006
Location: Upper Sternistan
Posts: 10,170
Originally Posted by yoyo
So when can you start paying estimate for 2013?
That ship has sailed. The final quarterly estimate was due 1/15/14.
josephstern is online now  
Old Feb 1, 2014, 11:50 am
  #213  
 
Join Date: Apr 2005
Location: NYC
Posts: 1,756
Originally Posted by josephstern
That ship has sailed. The final quarterly estimate was due 1/15/14.
Sorry. I meant 2014 estimate.
yoyo is offline  
Old Feb 1, 2014, 12:32 pm
  #214  
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Join Date: Jul 2006
Location: Upper Sternistan
Posts: 10,170
Originally Posted by yoyo
Sorry. I meant 2014 estimate.
First one is due 4/15/14, but I'm fairly sure you can pay anytime between now and then.
josephstern is online now  
Old Feb 1, 2014, 2:36 pm
  #215  
 
Join Date: Mar 2007
Location: S Cal
Programs: AA Lifetime Plat, United Silver, Marriott Plat, IHG Plat
Posts: 1,142
Originally Posted by yoyo
Sorry. I meant 2014 estimate.
From PayUSATax.com:

You cannot pay Form 1040 Estimated Taxes now. You can make a payment from March 1st onwards.


Same at OfficialPayments.com and Pay1040.com
GetawaysRus is offline  
Old Mar 1, 2014, 3:10 pm
  #216  
 
Join Date: Jun 2010
Posts: 400
Multiple payments to irs

Is there a way to avoid the two payments per provider per quarter limit?
Roka is offline  
Old Mar 1, 2014, 5:59 pm
  #217  
 
Join Date: Mar 2007
Location: S Cal
Programs: AA Lifetime Plat, United Silver, Marriott Plat, IHG Plat
Posts: 1,142
Originally Posted by Roka
Is there a way to avoid the two payments per provider per quarter limit?
http://boardingarea.com/frequentmile...-paying-taxes/

That's an older post by Frequent Miler, so the techniques for earning 5x that he discusses are now kaput, but if you read down you will find the following:

Another option was presented to me by Official Payment Corporation. They told me the following in writing (email writing, that is):

If you need to make more than two payments for each quarter, please contact Official Payments customer service at (800) 487-4567 and an associate will be able to assist with processing additional payments.

I called their phone number to confirm this. Could I really make more than two 1040-ES payments per quarter by doing so over the phone? “Yes, no problem,” I was told. Interesting. Official Payment Corporation charges 46 cents more than payUSAtax per debit transaction ($3.95 vs. $3.49), but offers a way to make as many payments as you’d like.


FM is discussing using VISA debit cards to make estimated tax payments. VISA debit cards are still around (such as the OneVanilla VISA gift card), usually in denominations up to $500. But I have no idea if Official Payments would accept multiple payments using larger denomination instruments than a $500 VISA debit card.

By the way, today is March 1, so it is now possible to make 2014 Estimated Tax payments online.
GetawaysRus is offline  
Old Mar 2, 2014, 9:54 am
  #218  
 
Join Date: Aug 2012
Location: SEA
Programs: Bonvoy Gold
Posts: 1,956
Originally Posted by josephstern
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!).
I did this by accident a few quarters ago, and it turned into a hassle. There are so much more efficient ways of MS-ing that I'd be reluctant to intentionally use this method for MS, minimum spend, or otherwise.
EkekoBWI is offline  
Old Mar 2, 2014, 11:06 am
  #219  
 
Join Date: May 2010
Location: SoCal
Programs: SPG PLAT, AA Plat (2MM), BA, UA/CO
Posts: 443
Am I overlooking options?

Here's what I see as available and why it doesn't work for me. I'd appreciate hearing, here or by PM, any options I'm overlooking or misunderstandings I have. TIA.

CC - too expensive.
ST - shut me down.
BofA Alaska - no credit for taxes.
UFB - 1500 daily max, so a little expensive for 750 AA points.
VISA GCs - 500 limit makes this a hassle, assuming it's scalable by phoning

xlax
xlax is offline  
Old Mar 2, 2014, 11:09 am
  #220  
 
Join Date: May 2010
Location: SoCal
Programs: SPG PLAT, AA Plat (2MM), BA, UA/CO
Posts: 443
Originally Posted by xlax
Here's what I see as available and why it doesn't work for me. I'd appreciate hearing, here or by PM, any options I'm overlooking or misunderstandings I have. TIA.

CC - too expensive.
ST - shut me down.
BofA Alaska - no credit for taxes.
UFB - 1500 daily max, so a little expensive for 750 AA points.
VISA GCs - 500 limit makes this a hassle, assuming it's scalable by phoning

xlax
Forgot one - BB/serve (and their ugly non-AmEx stepsisters)
xlax is offline  
Old Mar 2, 2014, 9:26 pm
  #221  
 
Join Date: Nov 2007
Location: PHX
Posts: 4,792
My vaniila debit used to be a good option. I was able to use it to turn vrs into tax payments every quarter, and while others got shut down left and right, I seemed to be fine using it only for tax payments. I was able to do more than 2 per quarter calling payusatax. But, alas, something has changed at my vanilla debit and I got shut down this month for not very much activity at all.

I think at this point the best option is gift cards, but again I can see where those with large bills would be unhappy about multiple $500 phone calls.
lkar is offline  
Old Mar 4, 2014, 5:41 am
  #222  
 
Join Date: Mar 2013
Location: Jackson, WY
Posts: 543
http://boardingarea.com/frequentmile...-credit-cards/

I find this post useful this time of year.
Mbcijim10 is offline  
Old Mar 8, 2014, 2:06 pm
  #223  
 
Join Date: Jun 2010
Posts: 400
I tried calling Official Payments to make more than two payments in same quarter, but was told no. Anyone have recent success?
Roka is offline  
Old Mar 10, 2014, 9:44 am
  #224  
 
Join Date: Aug 2011
Posts: 94
When filing your taxes in turbotax do you just choose pay by mail and then once you are done go to a website like paytaxusa and then use a debit like the Myvanilla which is loaded with enough VR's to cover your tax bill?

Last edited by dr0832; Mar 10, 2014 at 10:01 am
dr0832 is offline  
Old Mar 26, 2014, 9:58 am
  #225  
 
Join Date: Feb 2014
Programs: UA Plat, SPG Gold, Marriott Gold
Posts: 677
Should I use a CC to pay my taxes, and if so, which one?

I am getting ready to do my tax return and I anticipate a fairly significant liability ($20K - $30K). I am considering using my Chase SWA card, or possibly my Chase UA card, to pay this balance. I have a few questions that I am hoping y'all can answer for me:

Assuming a $30K liability, does anyone know the fee that I will need to pay when using a credit card?

If I use my SWA card, will the spend count toward CP eligibility (I have the personal Premier card)?

Alternatively, if I use the UA card I will get 45,000 miles (I have the Club card which gives me 1.5 miles per dollar spent). Will this be a better option?

I also have the SPG Amex, Amex Platinum, FIA Amex (2% CB), Discover, and Chase Freedom cards. Should I consider using one of these instead?

My initial thought is to use the SWA card and also shift most of my other spending to that card to try for CP eligibility. It would be tight, but I think I could get there without actually flying on WN at all this year. This will only work if all CC spending qualifies for CP eligibility. I believe it does, but please correct me if I am wrong.
Soccerdad1995 is offline  

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