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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 19, 2014, 10:46 am
  #241  
 
Join Date: Aug 2012
Location: SEA
Programs: Bonvoy Gold
Posts: 1,956
Lots of good information here, but mixed in with outdated information. Compiling my notes to make a wiki. Will post by next week.
EkekoBWI is offline  
Old Apr 22, 2014, 9:27 pm
  #242  
 
Join Date: Mar 2007
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March 1, 2014 was the opening date to make 1st quarter 2014 estimated tax payments online.

We are now past April 15, so I recently tried making a 2nd quarter 2014 Federal estimated tax payment. PayUSAtax.com and Pay1040.com both refused to accept any further payments.

Does anyone know when it will be possible to make a 2nd quarter estimated tax payment online? 3rd quarter? 4th quarter? There's likely some opening date when these websites will start to accept payments for each subsequent quarter.
GetawaysRus is offline  
Old Apr 24, 2014, 6:17 am
  #243  
 
Join Date: Oct 2010
Location: Feeder Band Land (South FL)
Programs: seeking best cc sign-up & spend bonus offers
Posts: 873
Anyone overestimating their taxes via cc?
Besides being sure not to underestimate & get penalized,
is it strategy for getting more miles-points in exchange
for losing some interest on savings...?
Does IRS penalize for "extreme" overestimating? Thanks!
TravelPhotographer is offline  
Old Apr 24, 2014, 6:31 am
  #244  
 
Join Date: Aug 2012
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Originally Posted by TravelPhotographer
Anyone overestimating their taxes via cc?
Not a wise strategy to intentionally overpay, but you'll get your money back (eventually), IME.
EkekoBWI is offline  
Old Apr 24, 2014, 11:17 am
  #245  
 
Join Date: Mar 2003
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Originally Posted by EkekoBWI
Not a wise strategy to intentionally overpay, but you'll get your money back (eventually), IME.
Well Fidelity AmEx pays 2% cashback, payusatax charges 1.87%....
ironmanjt is offline  
Old May 1, 2014, 9:52 am
  #246  
 
Join Date: Mar 2007
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Originally Posted by GetawaysRus
March 1, 2014 was the opening date to make 1st quarter 2014 estimated tax payments online.

Does anyone know when it will be possible to make a 2nd quarter estimated tax payment online? 3rd quarter? 4th quarter? There's likely some opening date when these websites will start to accept payments for each subsequent quarter.
I phoned today to inquire. PayUSAtax.com told me that second quarter Federal estimates can be paid beginning May 15. The window for 2nd quarter estimates is May 15 - July 15.
GetawaysRus is offline  
Old May 1, 2014, 4:45 pm
  #247  
 
Join Date: Nov 2009
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Originally Posted by GetawaysRus
I phoned today to inquire. PayUSAtax.com told me that second quarter Federal estimates can be paid beginning May 15. The window for 2nd quarter estimates is May 15 - July 15.
Can a person pay more than required? I'm trying to figure out how to meet minimum spend for two new Chase cards, before I apply for them.

Thanks.
siankaan1 is offline  
Old Aug 6, 2014, 12:57 am
  #248  
 
Join Date: Aug 2010
Posts: 633
Has anyone experienced being able to call in to do more than 2 CC payments? I have heard of people doing this for debit but not for CC.

I need to pay about $20K est taxes and want to use Amex GCs. So, with three processors x2 each I guess I could get close to $18K.

Why are people saying Debit is much cheaper when doing the Debit Gift Card route. Aren't you paying about 1% in fees at the store to buy the GCs? Then $3.95 proc fee per card puts you at about 1.8% which puts you close to the CC charge. I guess a lower proc fee of $2.49 if you can do many multiplies could get you to a 1.5% rate.

My plan is to buy Amex GC's at 3% through portal using 2% CC. So this gives me about 3% return on paying my taxes. Then I pay off the CC bill using Bill Pay at KM using my ST Debit card which gives another 1% in Delta miles. So I get 4% this way. I had been using my ST Debit card directly to pay taxes, which of course would be just one $3.95 fee. But the Amex GC route gives me these same ST miles plus the 3%.

The following is more of a discussion for people who do MS, and whether it is worth it to pay the taxes with AGC vs just paying the taxes with ST and using these AGCs to pay off your CC bill through VGC conversion and then to BP or MO.

Instead of paying taxes with the AGC I buy, I could just convert them to VGCs and use those to BP my CC bill. I already do a lot of that. So the limit here is that I already do a lot of face time at WM. I would say I am already maxed out on my visits there doing normal MS. I can do BP VGC to CC at KM as well, but they can only do one card at a time per pmnt, so that is a single $500 VGC or a $2K ST Debit card payment. If I have a $20K pmnt to make to CC, 10 ST pmnts at $2K each is plausable in a couple of visits, versus 40 VGC pmnts which would take forever and get a few cashiers upset. I guess another way to look at it is with 10 ST pmnts, that leaves me with 30 addl pmnts in comparison that I could make for MS spending, which at $15K * 4% is an extra $600 for the same # of pmnts.

Now I need to wrap my head around my AA Exec cards I just received, if it makes any difference to buy VGC's with these to meet minimum spend and BP, or simply use them to pay my taxes. Say I have $20K on them I need to spend. I can either buy VGC with them to then BP back at WM and use the AGC to pay taxes, or reverse it and pay taxes with the AA Exec and use the AGC to buy VGC. I guess it works out to be the same, and therefore the simplest way is to pay taxes with the AA Exec cards.

Last edited by FlyingBoat; Aug 6, 2014 at 1:07 am
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Old Aug 6, 2014, 5:29 am
  #249  
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Have you done KM recently? Stopped working for me.
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Old Aug 6, 2014, 6:55 am
  #250  
 
Join Date: Aug 2010
Posts: 633
Yes, I just did this Monday. When you say stopped working, what do you mean? That you could do no BP with a DC, not use ST card, not get ST miles, or can't use Debit Gift Cards?
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Old Aug 6, 2014, 8:01 am
  #251  
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KM had very few billers left in the system. No Amex except Macys.

I'll try again next week.
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Old Aug 6, 2014, 9:34 am
  #252  
 
Join Date: Aug 2010
Posts: 633
Originally Posted by josephstern
KM had very few billers left in the system. No Amex except Macys.

I'll try again next week.
I just make the payment there to either VISA or MasterCard as the biller, not the individual bank.
FlyingBoat is offline  
Old Aug 7, 2014, 1:37 pm
  #253  
 
Join Date: Mar 2013
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KM? I haven't been on here as much lately and the acronyms are losing me... Thanks in Advance!
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Old Aug 7, 2014, 6:18 pm
  #254  
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Originally Posted by Mbcijim10
KM? I haven't been on here as much lately and the acronyms are losing me... Thanks in Advance!
The K is for "K" and the M is for "Mart."

Nothing like WM, but in a pinch, it can help out a bit.
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Old Sep 10, 2014, 5:14 pm
  #255  
 
Join Date: Jan 2004
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I have to pay estimated taxes as well and was trying to figure out a way I could get points from it. When I look at Official Payments, there is a 2.35% fee for using a CC.

Is there any better deal out there or better way to do this? At that rate I would end up paying more on the fee then probably what the points are worth. My debit card doesn't earn points, so no real reason to use that...

EDIT: I found this site from the IRS showing that some companies only charge a 1.87% fee, but this is still too high. I need less than 1%

Also, I can't really do this effectively by purchasing debit gift cards as I owe about $20k
omegadeal is offline  

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