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

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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

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Old Feb 13, 2022, 11:51 am
  #586  
 
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Anyone else purposely under withhold so they can use cc to pay either lump sum or quarterly for the next year? I do this bc I always have cc minimums to meet and it gives me that option. I don’t mind the small penalty either.
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Old Feb 13, 2022, 12:08 pm
  #587  
 
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Originally Posted by s0ssos
Do you have confirmation the payments all were accounted for? Because the IRS is quite backlogged on its stuff.
I would presume it is an artificial limit, but who knows with the IRS.
Yea, all payments I've ever made show up in my IRS account. Never had one NOT show up.
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Old Feb 13, 2022, 12:14 pm
  #588  
 
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Originally Posted by flyaxa
I believe if you file jointly you can make up to 12 payments per quarter, each spouse x2 at each of the 3 processors. We have not tested 12, but have done up to 8. We do at minimum 4-5 payments per quarter so I don't think it accumulates quarter to quarter. All payments are verified in our online IRS accounts.
What about the rest of the year? If you did 8 in one quarter, were you both able to do at least 2 each for all the other quarters? What was the distribution of the 8 between you and your SO?
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Old Feb 13, 2022, 1:36 pm
  #589  
 
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Originally Posted by fredc84
What about the rest of the year? If you did 8 in one quarter, were you both able to do at least 2 each for all the other quarters? What was the distribution of the 8 between you and your SO?
Yes, we've definitely been able to do two each the next quarter. Each quarter, we usually try to max out best rate (currently 1.87%) with 4 payments and then move on to the next higher rate processor if needed. When we did the 8, we each did two at two different processors. My gut feeling is the IRS doesn't really care, as they are getting their money. Might it raise an audit flag? Possibly...not sure.
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Old Feb 13, 2022, 6:37 pm
  #590  
 
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Originally Posted by flyaxa
Yes, we've definitely been able to do two each the next quarter. Each quarter, we usually try to max out best rate (currently 1.87%) with 4 payments and then move on to the next higher rate processor if needed. When we did the 8, we each did two at two different processors. My gut feeling is the IRS doesn't really care, as they are getting their money. Might it raise an audit flag? Possibly...not sure.
Interesting. What I don't understand then is why after using all 3 processors twice each in the first quarter, I was unable to do any for the 2nd and 3rd quarters...as if I had used up my allotment of 2 per quarter and they knew it. I tried at least two during those quarters and they all told me I was at my limit.
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Old Feb 13, 2022, 6:46 pm
  #591  
 
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Originally Posted by s0ssos
That's good to know. So there is no actual limit of 2 per quarter, like the IRS states, but rather each payment processor limits it individually but they all go through.
Great way to use for spend bonuses then.
The lowest cost processor would not take a third payment for the fourth quarter but the next lowest did.
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Old Feb 13, 2022, 7:16 pm
  #592  
 
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Originally Posted by fredc84
Interesting. What I don't understand then is why after using all 3 processors twice each in the first quarter, I was unable to do any for the 2nd and 3rd quarters...as if I had used up my allotment of 2 per quarter and they knew it. I tried at least two during those quarters and they all told me I was at my limit.
Last year or the year before I had to wait 30 days from the Q1 due date before they would accept Q2 payments.
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Old Feb 13, 2022, 10:07 pm
  #593  
 
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Originally Posted by rrgg
Last year or the year before I had to wait 30 days from the Q1 due date before they would accept Q2 payments.
As I detailed before, I was unable to make payments using the online services for two quarters...a bit longer than 30 days.
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Old Feb 14, 2022, 5:47 am
  #594  
 
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Originally Posted by fredc84
As I detailed before, I was unable to make payments using the online services for two quarters...a bit longer than 30 days.
That does seem odd. Did you create accounts at each/any of the processors? Sure it probably doesn't matter, but we have never created accounts
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Old Feb 14, 2022, 6:47 am
  #595  
 
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Originally Posted by flyaxa
That does seem odd. Did you create accounts at each/any of the processors? Sure it probably doesn't matter, but we have never created accounts
This is what my original post says "I was able to do 6 because I did 2 with each of the online companies (pay1040, payUSAtax, & ACI payment)"...so yes, I have an account at all three.

Edited: added to answer the question.

Last edited by fredc84; Feb 14, 2022 at 7:28 am
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Old Feb 14, 2022, 7:09 am
  #596  
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Originally Posted by fredc84
This is what my original post says
I think flyaxa is asking if you created an account at each of the three, or simply used them to make payments without an account?
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Old Feb 15, 2022, 12:02 pm
  #597  
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Originally Posted by nkedel
This may depend on why you're making estimated tax payments. I've had no problem making estimated payments some quarters as needed (for investment income, or for under-withheld tax on bonus income) and not other quarters, but I still have the bulk of my income/withholding on a regular W-2. I've no idea if that is applicable to someone with primarily 1099 or Schedule C income.
Bonus point for the Tom Lehrer quote in your signature.

Originally Posted by Stgermainparis
Anyone else purposely under withhold so they can use cc to pay either lump sum or quarterly for the next year? I do this bc I always have cc minimums to meet and it gives me that option. I don’t mind the small penalty either.
Nope. Don't like the penalty. But if I'm due a refund, I have my accountant send me a check with the difference instead of carrying it forward.

Mike
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Old Feb 15, 2022, 12:25 pm
  #598  
 
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Originally Posted by mikeef
Bonus point for the Tom Lehrer quote in your signature.



Nope. Don't like the penalty. But if I'm due a refund, I have my accountant send me a check with the difference instead of carrying it forward.

Mike
What penalty? If you are under-withholding so you can pay estimated taxes quarterly, there is no penalty.

We actually started underpaying by accident since I didn't change our withholding after we got married, plus my SSDI doesn't have withholding. It gives me the opportunity to make a big spend for a sign-up bonus, if needed.
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Old Feb 15, 2022, 2:23 pm
  #599  
 
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Originally Posted by fredc84
What penalty? If you are under-withholding so you can pay estimated taxes quarterly, there is no penalty.

We actually started underpaying by accident since I didn't change our withholding after we got married, plus my SSDI doesn't have withholding. It gives me the opportunity to make a big spend for a sign-up bonus, if needed.
That's what happened to us once (accidental underpaying). So we owed a penalty (not much, like $60). I sometimes don't pay the quarterlies though bc I want the big charge later for a SUB. I'm only talking like bumping $5-8k. I was a little surprised this year bc I owed $6k but my estimated quarterly payments for next year are $2800. That would make sense if my balance owed was 11k, but it wasn't.
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Old Mar 7, 2022, 2:47 pm
  #600  
 
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Does the "2 payments per processor per tax type" still apply? i.e. Ideally I'd like to make 4 payments, but the IRS limits officially state 2 payments per year for 1040 taxes. The wiki and various blogs seem to indicate it's actually 2 per year per processor, but was hoping someone might be able to provide a more recent data point.
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