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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 Mar 7, 2022, 2:51 pm
  #601  
 
Join Date: Oct 2009
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Posts: 351
I already made a 1040-ES payment for 2021 in December. I have yet to fill out and file my tax return yet (still have a month!), but I was wondering if there's any potential problem with making another pre-payment for 2021 now? Such that any overpayment from this and my previous pre-payment will be refunded soon after filing my return. It seems straightforward enough, but I just want to be sure I'm not overlooking anything!
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Old Mar 7, 2022, 4:17 pm
  #602  
 
Join Date: Feb 2016
Location: New York
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Posts: 1,350
Originally Posted by mathlete
I already made a 1040-ES payment for 2021 in December. I have yet to fill out and file my tax return yet (still have a month!), but I was wondering if there's any potential problem with making another pre-payment for 2021 now? Such that any overpayment from this and my previous pre-payment will be refunded soon after filing my return. It seems straightforward enough, but I just want to be sure I'm not overlooking anything!
You can't make any estimated tax payments for 2021 after Jan 15, 2022. The only payment you can make for 2021 now is a payment for tax owed on your return. I understand what you want to do, but you should've done it prior to 1/15/22.
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Old Mar 7, 2022, 4:44 pm
  #603  
 
Join Date: Jun 2011
Posts: 3,556
Originally Posted by fredc84
You can't make any estimated tax payments for 2021 after Jan 15, 2022. The only payment you can make for 2021 now is a payment for tax owed on your return. I understand what you want to do, but you should've done it prior to 1/15/22.
You could make an extension payment (4868)
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Old Mar 7, 2022, 4:50 pm
  #604  
 
Join Date: Feb 2016
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Posts: 1,350
Originally Posted by nall
You could make an extension payment (4868)
He was specifically asking about the 1040-ES payments, which end like I said. But I don't know anything about the 4868 ones, but it looks like you have to estimate (fill out a form) how much you will owe when you file....would that work when you are purposely overpaying?
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Old Mar 7, 2022, 5:15 pm
  #605  
 
Join Date: Oct 2009
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Originally Posted by fredc84
You can't make any estimated tax payments for 2021 after Jan 15, 2022. The only payment you can make for 2021 now is a payment for tax owed on your return. I understand what you want to do, but you should've done it prior to 1/15/22.
Sure, I get your point that I can't do a 1040-ES for this (and had I thought ahead more clearly, I would have done it in January). But when I go through the motions on one of the payment processing sites, it doesn't seem to require me to indicate that the amount is what's owed on my 1040. It just says "Tax Form Option: Current Tax Return Year - 2021". It doesn't seem like anything will prevent me from submitting the payment. I guess your point is that there will be no way to indicate that I already paid this on my 1040?

Originally Posted by fredc84
He was specifically asking about the 1040-ES payments, which end like I said. But I don't know anything about the 4868 ones, but it looks like you have to estimate (fill out a form) how much you will owe when you file....would that work when you are purposely overpaying?
Maybe in a bit of irony, I'm really bad at math?
To be honest though, I don't want to do anything too unusual, which it sounds like this would be. Thanks for the quick feedback to both of you!
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Old Mar 8, 2022, 11:58 pm
  #606  
 
Join Date: Jun 2011
Posts: 3,556
Originally Posted by fredc84
He was specifically asking about the 1040-ES payments, which end like I said. But I don't know anything about the 4868 ones, but it looks like you have to estimate (fill out a form) how much you will owe when you file....would that work when you are purposely overpaying?
Yes, just make a guess and pay, and then you can claim the extension payment when you file your 1040. It works pretty much the same as 1040-ES, except that you put extension payments in a different place on your 1040.
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Old Mar 21, 2022, 4:49 pm
  #607  
 
Join Date: Jun 2007
Posts: 140
Anyone tried to use VGC/MGC to pay tax via PayUSATax successfully? If so which kind of VGC did you use? Thanks.
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Old Mar 28, 2022, 12:22 pm
  #608  
 
Join Date: May 2008
Posts: 198
I paid my 2021 taxes due via ACI payments online. I paid 2x$5K using me as primary. Another $5k was paid by my spouse as primary. Unfortunately, my spouse payment doesn't reflect in my IRS account. My payment does reflect in her IRS account though. The only way is to call IRS? If so, what option does one select from the tree of option provided in every prompt?. Anyone in this scenario before?.

Last edited by NBG007; Mar 28, 2022 at 12:41 pm
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Old Mar 28, 2022, 3:44 pm
  #609  
 
Join Date: Aug 2004
Programs: Delta Platinum, HH Diamond
Posts: 364
point neon debit card

Saw an ad for this debit card online today, 1% cash back on all non-category purchases. Has anyone used this card to pay taxes?
https://www.point.app/
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Old Mar 28, 2022, 8:57 pm
  #610  
 
Join Date: Mar 2016
Posts: 25
Question Using $45K IRS payment as minimum spending for signup bonus

NOTE: I believe this post was incorrectly moderated to be merged to this tax thread. This is really not a question about paying taxes, it is a question about opening many cards at once. So I've created a new thread that leaves taxes out completely.

-----

It turns out I will need to pay $45K to the IRS this April. I know I can pay that with credit cards for a fee of a bit less than 2%, so it seems it makes sense to do that if I use it as minimum spending to get signup bonuses (SUBs) that correspond roughly to 8% to 10% of that required minimum spending.

Because most cards require $3K of minimum spending (with a few exceptions), I would need to get around 10 new cards all at once. I've never done that and thought I would ask here about any pitfalls I may be missing.

I plan to get business cards since it sounds like banks are more liberal with those (also they don't count against the Chase 5/24 rule).

My main concern is whether SUBs may be denied if banks observe I obtained several cards around the same time. Are they able to obtain that information from other banks or from the credit bureaus?

And of course, if I get multiple cards from the same bank, they will know. Is that a problem? If, for example, I get two business cards with large SUBs from Amex, may that lead them to deny me the SUBs under the reasoning that I am gaming the system?

Two examples:
- last month I got the Chase Ink Business Cash. If I request the Chase Ink Preferred now, will that be a problem?
- if I apply for the Amex Business Platinum and Gold cards on the same day (considering the personal Blue Cash Preferred as well), will that be a problem?

Any advice (including other ways to go about this) is appreciated.

Last edited by osonda; Mar 29, 2022 at 7:10 am Reason: "Image" deleted by moderator because it contained no image, just raw text.
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Old Mar 29, 2022, 7:30 am
  #611  
mia
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1) If you have a question about the moderators' decision to move a post, please contact us directly, rather than leaving a comment in the thread, and duplicating the post.

2) You seem to be under the impression that you will be able to use ten different cards to pay your income taxes. Read here: https://www.irs.gov/payments/frequen...of-tax-payment Then you may wish to review the thread to learn how the processors implement the IRS rule.

Last edited by mia; Mar 29, 2022 at 7:37 am
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Old Mar 29, 2022, 7:47 am
  #612  
 
Join Date: Mar 2016
Posts: 25
Originally Posted by mia
1) If you have a question about the moderators' decision to move a post, please contact us directly, rather than leaving a comment in the thread, and duplicating the post.
Sorry about that, and thank you for the clarification. What is the best way to contact moderators in these cases? Simply replying to the "Forum Alert" private message I got when the thread was merged?
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Old Mar 29, 2022, 7:53 am
  #613  
mia
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The best way is to click the red Alert icon in the lower left corner of your own post. This automatically sends the message to all of the moderators assigned to that specific forum.
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Old Mar 29, 2022, 8:19 am
  #614  
nsx
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Originally Posted by osonda
It turns out I will need to pay $45K to the IRS this April.
Four high-bonus cards with $10k minimum spend would be easier and safer than trying to open 8 cards. Chase limits you to 2 in 30 days IIRC, so start there.
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Old Mar 29, 2022, 8:33 am
  #615  
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I know this is largely irrelevant, but any idea why there's a limit of two charges per processor per payment? I could get a lot more accomplished if I could do, say, four per.

Also, it sounds like paying in your spouse's name to double the options doesn't always work so well. Any tips on that?
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