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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 Jan 15, 2013, 12:43 am
  #16  
 
Join Date: Jun 2010
Posts: 292
Second successful California state income tax payment with JCB Marukai Premium card

Four days ago, I successfully made another online payment of California estimated income tax with my JCB Marukai card, this time for a larger amount. Nobody has contacted me to tell me that the payment has failed, and the online record of the paymetn still. This supports my hypothesis that officialpayment's problem with JCB Federal Income tax payment getting reversed does not apply to California state income tax payments.
skynerd is offline  
Old Jan 15, 2013, 2:12 am
  #17  
 
Join Date: Jun 2010
Posts: 292
Better rates introduced in IRS web page update

The Internal Revenue Service web page for credit card payments was apparently revamped on January 8th, and includes some fee improvements. Here are the changes that I see, most substantial first:

1. payusatax now accepts American Express at its regular 1.89% fee, a substantial 0.4% reduction from the previous cheapest AmEx rate of 2.29% that was previously offered by payusatax's sister business valuetaxpayment. To confirm this, I just made an AmEx payment on payusatax for 1.89%. ValueTaxPayment is no longer listed on the IRS page.

2. Flat fees for debit card processing have dropped. Link2gov's two sites, businesstaxpayment and pay1040, set the record low at $2.99. I tried entering a Vanilla Visa gift card number, and was offered this debit card rate. I wonder if their phone support will allow payers to exceed the two payment limit.

3. Officialpayments' sister site choicepay has dropped its debit card fee to $3.48. If choicepay will follow officialpayments' policy of allowing payers to go over the two payment limit through the phone support line and charging debit card rates for Vanilla Visa, then this would be a savings of $.50 per card over the previously officialpayment debit card rate, which is the correct comparison, since I have I have only very rarely been able to reach a live representative at valuetaxpayment or payusatax (previously the cheapest debit processors, then at $3.49). Unfortunately, choicepay.com/fed currently redirects me to fed.choicepay.com, which says "directory listing denied", which does not bode well.

4. choicepay.com/fed, assuming they get their web site running, will have the new record for cheapest non-AmEx credit card processing at 1.88%, versus payusatax's infinitesimally more expensive previous record low of 1.89%.

Since it seems that each of the payment sites has changed a bit, I will probably retry my JCB card on each. I am especially interested to see the results with choicepay.

Also, I tried my American Express for Target card again on a few of these processors, and, as before, none of them offered me the debit card rate for it.

Last edited by skynerd; Jan 15, 2013 at 2:14 am Reason: "that debit card rate" --> "the debit card rate"
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Old Jan 15, 2013, 5:41 am
  #18  
akp
 
Join Date: Jun 2011
Location: Flyover Territory
Programs: Hilton Diamond
Posts: 687
Thanks for posting

Originally Posted by skynerd

1. payusatax now accepts American Express at its regular 1.89% fee, a substantial 0.4% reduction from the previous cheapest AmEx rate of 2.29% that was previously offered by payusatax's sister business valuetaxpayment.
Great information, skynerd. Thanks for posting.

Anita
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Old Jan 15, 2013, 8:04 am
  #19  
mia
Flyertalk Posting Legend Moderator: Credit Card Programs, American Express, Capital One, Chase, Citi, Diners Club, Signatures.
Original Poster
 
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: AA & Marriott Perpetual Platinum; DL & HH Gold
Posts: 49,058
Moderator action

Thread has been split from prior year discussions. See post #1.

Last edited by mia; Jan 15, 2013 at 8:14 am
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Old Jan 15, 2013, 8:45 am
  #20  
 
Join Date: Nov 2012
Posts: 657
paypal

paypal business debit should work, for low debit fee, load with paypal cash cards at ceeveeess
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Old Jan 15, 2013, 12:43 pm
  #21  
 
Join Date: Aug 2010
Posts: 327
What do people select? 1040-ES or 1040 (advanced payment) or it would not matter at all?
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Old Jan 15, 2013, 12:49 pm
  #22  
 
Join Date: Jul 2012
Location: LAX
Posts: 383
I don't own property and thus don't pay property taxes but I want to ask this simple question as I try to put more recurring bills on my card like my monthly rent, which isn't payable by credit card:

Can't I use checks that my cc company sends me to make payments that can not be otherwise paid with a credit card or incur a fee for doing so? I've never used these checks before but I understand that they can really be used for anything, just like a regular check.
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Old Jan 15, 2013, 12:57 pm
  #23  
 
Join Date: Aug 2010
Posts: 327
Originally Posted by pkoo
I don't own property and thus don't pay property taxes but I want to ask this simple question as I try to put more recurring bills on my card like my monthly rent, which isn't payable by credit card:

Can't I use checks that my cc company sends me to make payments that can not be otherwise paid with a credit card or incur a fee for doing so? I've never used these checks before but I understand that they can really be used for anything, just like a regular check.
As far as I know, most of those checks are BT checks and incur BT fee + interest (unless they are 0% interest checks) ! Also, you don't earn points/miles on them.
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Old Jan 15, 2013, 1:00 pm
  #24  
mia
Flyertalk Posting Legend Moderator: Credit Card Programs, American Express, Capital One, Chase, Citi, Diners Club, Signatures.
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Location: Miami, Mpls & London
Programs: AA & Marriott Perpetual Platinum; DL & HH Gold
Posts: 49,058
Originally Posted by pkoo
Can't I use checks that my cc company sends me to make payments that can not be otherwise paid with a credit card
Yes, but if you use the checks provided with a credit card these payments are processed as a cash advance. There are exceptions, but typically this means:

  • Cash advance fee 3%
  • Interest from date of transaction
  • No rewards
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Old Jan 15, 2013, 10:02 pm
  #25  
 
Join Date: Aug 2011
Location: Southern California (LAX)
Programs: Marriott Gold, Identity Platnium (Cosmopolitan), Palladium Card, Hilton Diamond
Posts: 177
I have never paid the tax with a credit or debit card, but if the tax due is low, it would be actually profitable & practical (time efficient) in certain cases if the tax is paid via debit card, right?

Case #1:
A) Buy $500 debit (gift) card from a office supply place with a Chase Ink card.
Total fee = $4.99 (estimated)
B) Pay via businesstaxpayment.com which has debit card fee of $2.99
Result: (4.99+2.99)/$500 = 1.596% ; & get 5% back which is ~2525 UR points ~$25

Only thing is, I don't know if all gift card purchases are classified as credit card, or if there are debit card options as well.

Is there a specific post on flyertalk that looks at all these options?
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Old Jan 15, 2013, 11:14 pm
  #26  
 
Join Date: Nov 2012
Posts: 657
Originally Posted by CreditRocks
I have never paid the tax with a credit or debit card, but if the tax due is low, it would be actually profitable & practical (time efficient) in certain cases if the tax is paid via debit card, right?

Case #1:
A) Buy $500 debit (gift) card from a office supply place with a Chase Ink card.
Total fee = $4.99 (estimated)
B) Pay via businesstaxpayment.com which has debit card fee of $2.99
Result: (4.99+2.99)/$500 = 1.596% ; & get 5% back which is ~2525 UR points ~$25

Only thing is, I don't know if all gift card purchases are classified as credit card, or if there are debit card options as well.

Is there a specific post on flyertalk that looks at all these options?

I think vanilla visa is classified as debit card, not available at my local office depot anymore.
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Old Jan 15, 2013, 11:49 pm
  #27  
 
Join Date: Aug 2011
Location: Southern California (LAX)
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Posts: 177
Originally Posted by drdrew450
I think vanilla visa is classified as debit card, not available at my local office depot anymore.
Thanks for the reply. So only the vanilla visa is classified as a debit card? I called a local OD in so-cal and they did not have it either
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Old Jan 16, 2013, 2:27 am
  #28  
 
Join Date: Jun 2010
Posts: 292
Originally Posted by CreditRocks
[...] So only the vanilla visa is classified as a debit card? [...]
Trying some depleted card numbers on officialpayments just now, every Visa debit card that I tried was offered the debit rate, and no non-Visa gift cards were. For Visa, I tried Vanilla, Safeway/GoWallet, and giftcards.com. For MasterCard, I tried Vanilla, Safeway/GoWallet, giftcards.com and Staples. For American Express, I only tried a rebated gift card ordered online.

Edit 1/16/2013: I hasten to add that DCBob reported being offered the debit card rate for the personal version of the SunTrust Delta debit MasterCard at another payment processor, maybe payusatax. So, not every MasterCard gets the credit card rate. I was able to confirm that with the personal version of that card, but not the business version.

Last edited by skynerd; Jan 16, 2013 at 2:33 am
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Old Jan 18, 2013, 3:38 pm
  #29  
 
Join Date: Jan 2003
Location: SAN
Programs: DL SM, Marriot PLT, Tall guy in need of legroom
Posts: 1,478
Curious if anyone has found a resource to pay CA estimated taxes with a debit card. looks like the FTB website only does credit cards or direct ACH pulls from a bank account. A few of the sites above seem to process debit cards under the credit card fee % rate. No bueno.

Last edited by kdinino; Jan 20, 2013 at 10:50 pm
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Old Jan 19, 2013, 5:18 pm
  #30  
 
Join Date: Dec 2012
Posts: 145
Flexperks 3x Flexpoints for Charity donations = PURE WIN! Donate get 3 flexpoints worth upto 6 cents for travel and gain tax deductions
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