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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 Oct 30, 2022, 7:42 am
  #676  
 
Join Date: Apr 2005
Location: NYC
Posts: 1,756
Originally Posted by flyaxa
For those who pay quarterly, BOA has an interesting promotion for one day only. 2% bonus on all spend on Nov. 5th. If you are Preferred Rewards Platinum member, you'll earn 4.62%. Pay1040 charges 1.87% fee so that's a net of 2.75%. 71 days between Nov 5 and Jan 15 = 14.14%APR. Not bad if you have to pay quarterly anyway.
Details: https://promotions.bankofamerica.com...morerewardsday
I wonder if pay1040 are consider online purchase. I think I have a BOA cash reward card.
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Old Oct 31, 2022, 6:44 am
  #677  
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Yes, Pay1040 is an online purchase of a financial service.
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Old Oct 31, 2022, 7:34 pm
  #678  
 
Join Date: Apr 2006
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Originally Posted by yoyo
I wonder if pay1040 are consider online purchase. I think I have a BOA cash reward card.
If you're referring to the 3% "online shopping" category, I don't think this will pay out at that level. The online shopping category only applies to retail purchases from online stores. It does not work for buying postage stamps from USPS online or for paying a cable/utility/cell phone bill online, so I don't think it will work for an online tax payment either. So if you're in the highest rewards category, you would earn 1.75% + 2% - 1.87% from paying your taxes online (net 1.88%).
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Old Oct 31, 2022, 9:38 pm
  #679  
 
Join Date: Apr 2005
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@hr56477 @SPN Lifer

Thank you both. Now the question is if anyone has prior data point using BOA cash reward to pay tax throught pay1040 and got BOA's 3% "online shopping" cashback?
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Old Oct 31, 2022, 9:50 pm
  #680  
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This WalletHub blog article mentions that paying taxes is excluded from the Online Shopping category:

https://wallethub.com/answers/cc/ban...ry-2140732386/
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Old Nov 12, 2022, 8:11 am
  #681  
 
Join Date: Apr 2011
Posts: 567
Hello - I am trying to meet the spend on my Amex card by Dec 31 - so need to pay the payroll taxes for my business form 941 by that date i.e. Dec 31. Normally, the online tax payment websites let you pay the 4th quarter taxes ending Dec 31 only on Jan 1 or later - which does not work for me. Is there a way to pay the taxes in December. Has anyone paid payroll taxes in advance? What bucket to use in the online website?
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Old Nov 20, 2022, 11:48 am
  #682  
 
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Q3 overpayment

Originally Posted by bobby21
Hello - I am trying to meet the spend on my Amex card by Dec 31 - so need to pay the payroll taxes for my business form 941 by that date i.e. Dec 31. Normally, the online tax payment websites let you pay the 4th quarter taxes ending Dec 31 only on Jan 1 or later - which does not work for me. Is there a way to pay the taxes in December. Has anyone paid payroll taxes in advance? What bucket to use in the online website?
Easy, if you can make a (presumably) additional payment for Q3. The overpayment will credit and you'll reduce or skip the Q4 payment. They'll take your money anytime.
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Old Dec 5, 2022, 4:09 am
  #683  
 
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If folks are concerned about what banks (Chase, at least) think about paying taxes with a credit card, this was found on the Chase website:
https://www.chase.com/personal/credi...th-credit-card

H/T DoctorOfCredit
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Old Dec 6, 2022, 9:01 am
  #684  
 
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Originally Posted by flyaxa
If folks are concerned about what banks (Chase, at least) think about paying taxes with a credit card, this was found on the Chase website:
https://www.chase.com/personal/credi...th-credit-card

H/T DoctorOfCredit
Thanks - though they should maybe invest in an editor/proof reader?

The fees area round 2% of the tax amount you are charging to the credit card.
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Old Dec 28, 2022, 6:32 am
  #685  
 
Join Date: Jun 2010
Posts: 400
Paying more than 2X per quarter

Is it still possible to make more than 2 IRS payments per quarter for 1040ES by phone with any of the tax services? Used to be able to do with one or more of these 3.
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Old Dec 29, 2022, 5:35 am
  #686  
 
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Originally Posted by Roka
Is it still possible to make more than 2 IRS payments per quarter for 1040ES by phone with any of the tax services? Used to be able to do with one or more of these 3.
I have never paid over the phone, only through the various internet sites listed here in the Wiki. For those, the general thought is two per person, however, if you file jointly, the spouse can also pay twice per tax service. If you pay individually, pay twice with one company and then just switch to another for your third payment. Hopefully that helps and is not just stating the obvious.
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Old Dec 29, 2022, 10:45 am
  #687  
 
Join Date: Jun 2010
Posts: 400
Originally Posted by flyaxa
I have never paid over the phone, only through the various internet sites listed here in the Wiki. For those, the general thought is two per person, however, if you file jointly, the spouse can also pay twice per tax service. If you pay individually, pay twice with one company and then just switch to another for your third payment. Hopefully that helps and is not just stating the obvious.
I pay twice per service so have made 6 payments. I could do another 6 online under my wifes name but want to make sure all the payments are properly credited. Has anyone done this and if so any issues with IRS matching the payments to a joint filing?
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Old Dec 29, 2022, 11:12 am
  #688  
 
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Originally Posted by Roka
I pay twice per service so have made 6 payments. I could do another 6 online under my wifes name but want to make sure all the payments are properly credited. Has anyone done this and if so any issues with IRS matching the payments to a joint filing?
I'm sure I posted about this upthread, but one year I made 6 payments using all three services in the 1st quarter. I was unable to make another payment using any of them until the 4th quarter that year...so the 6 payments were spread out over all three quarters. When I went to make a payment in the 2nd and 3rd quarter, all three services told me I was over the limit for online payments. Not sure how that would work doing it in the 4th quarter, but it could also be a YMMV type of thing as well. But in my experience, the 2 per quarter using the online services was exactly how it worked. I have gotten around it using SO's account.
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Old Dec 29, 2022, 3:52 pm
  #689  
 
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Originally Posted by Roka
I pay twice per service so have made 6 payments. I could do another 6 online under my wifes name but want to make sure all the payments are properly credited. Has anyone done this and if so any issues with IRS matching the payments to a joint filing?
Yes, we have done it every quarter going back quite a few years now. Never had an issue with a payment not posting to our account(s). We always max out the lowest current rate service first between the two of us and then move to others.
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Old Jan 2, 2023, 10:33 am
  #690  
 
Join Date: Aug 2012
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PayUSAtax.com now lowest at 1.85%.
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