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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 Feb 1, 2013, 3:24 am
  #61  
 
Join Date: Jun 2012
Location: Atlanta
Programs: Delta Diamond; HHonors Diamond
Posts: 655
Originally Posted by silviar
One way would be Office Depot vanilla visa with chase ink, then cvs vanilla reload, then bluebird...repeat until amount is reached, them pay with BB...but just wondering if there is a more direct approach...
I thought the point of the gift cards was to get credit card spend by purchasing the cards and then using the cards to pay for things you can't do by credit card. You can pay your taxes by credit card for the 2% fee, so why try to use the gift cards at all?

If bluebird will cut a check to the Dept. of Revenue for you, then maybe the bluebird idea would save you about half percent on your transaction costs.
GatorBlues is offline  
Old Feb 1, 2013, 3:38 am
  #62  
 
Join Date: Apr 2011
Posts: 111
has anyone used BB to send a check for the tax return? what is the maximum amount someone has cut the check for. if one wer to use the WF debit /preload card as debit , what is the max amount. i think u cannot do more than $600 with WF pp. right?
americanindian is offline  
Old Feb 3, 2013, 9:11 am
  #63  
 
Join Date: Jan 2012
Posts: 93
Originally Posted by GatorBlues
I thought the point of the gift cards was to get credit card spend by purchasing the cards and then using the cards to pay for things you can't do by credit card. You can pay your taxes by credit card for the 2% fee, so why try to use the gift cards at all?

If bluebird will cut a check to the Dept. of Revenue for you, then maybe the bluebird idea would save you about half percent on your transaction costs.
He's talking about buying gift cards at Office Depot with a Chase Ink card, which gets 5X points at office supply stores.

Paying taxes with credit card = 1X points

Paying taxes with gift cards purchases at Office Depot with Chase Ink: 5x points

Also, those gift cards purchases at Office Depot are debit cards, so when you pay, the fee is substantially lower (flat fee vs. % fee for CC)

Doesn't matter now though, because Office Depot is getting rid of the $500 cards.
CalGuy is offline  
Old Feb 7, 2013, 2:09 pm
  #64  
 
Join Date: Jan 2013
Posts: 25
What poor ....ing timing. I was about to start buying $500 gift cards this week just in case. Still worth it to do the $200 cards, but that is a lot of ....ing hassle.
Mike5889 is offline  
Old Feb 7, 2013, 2:18 pm
  #65  
 
Join Date: Apr 2012
Location: Bay Area, CA
Programs: AAdvantage, HHonors Diamond, WN RR A-list+
Posts: 584
I'm paid as a 1099 so I have a decent amount to pay.. I can go have my taxes done, enter the amount I wish to pay via the choice pay site and I'm good, correct?
poser is offline  
Old Feb 9, 2013, 4:45 pm
  #66  
 
Join Date: Aug 2012
Location: New York, NY
Programs: AA Plat, UA, BA, DL, SPG Gold
Posts: 94
I anticipate having some chunky tax bills this year. I was planning to give FrequentMiler's method a try (Amex GCs through BigCrumbs, then using those to purchase Visa cards on GiftCardMall, then multiple payments over the phone). I haven't done all the math, but I'm thinking that the 1.4% rebate at BigCrumbs and 1% for FatWallet (for GiftCardMall) should just about offset the fees.

Does anyone have any recent experience using this method?
Spacetime17 is offline  
Old Feb 11, 2013, 3:29 pm
  #67  
 
Join Date: Dec 2008
Location: San Antonio
Programs: AA, SWA, CO, UA, PC Plat, HH Gold, SPG
Posts: 803
I have paid our property tax bills online the last couple of years to meet minimum spend requirements for new cards.

I have never tried to pay Fed Taxes since this is the first year (in many) that I wasn't getting a refund.

I am looking at two new cards I'd like to use to get the bonus miles/points by paying Fed Taxes.

The question I have is once I eFile my return (next month) and go to the pay sites, is there any problem splitting the amount between two cards? I would pay X amount on one, then go back and pay the remainder on the other.

Thanks for any advice.
bj2757 is offline  
Old Feb 12, 2013, 8:39 am
  #68  
 
Join Date: Sep 2011
Location: Ann Arbor, MI
Posts: 308
Originally Posted by Spacetime17
I anticipate having some chunky tax bills this year. I was planning to give FrequentMiler's method a try (Amex GCs through BigCrumbs, then using those to purchase Visa cards on GiftCardMall, then multiple payments over the phone). I haven't done all the math, but I'm thinking that the 1.4% rebate at BigCrumbs and 1% for FatWallet (for GiftCardMall) should just about offset the fees.

Does anyone have any recent experience using this method?
BigCrumbs doesn't pay out the 1% for purchases of Visa gift cards.

I don't think it is worth it, but you could do this: go through BigCrumbs to buy a $200 GiftCardMall GC and get $2 back (1% of $200), then use that GC to buy the $1000 Visa gift card. They won't let you apply more than one.
Frequent Miler is offline  
Old Feb 12, 2013, 2:27 pm
  #69  
 
Join Date: Mar 2007
Location: S Cal
Programs: AA Lifetime Plat, United Silver, Marriott Plat, IHG Plat
Posts: 1,142
Hmm... Anyone care to comment about this idea? This is more of a "manufactured spend" idea.

My beautiful wife picked up 2 new cards recently. We've almost met the spend on a Southwest card. Now I'm turning my attention to the new Club Carlson card.

Would there be any problems with buying a $1000 VISA gift card online using the Club Carlson card, and then using that 1K gift card to pay estimated taxes? I have 3 concerns:

1. Would US Bank charge any type of cash advance fee? (I know that I have to be careful with using my Citi cards for anything that looks like a financial transaction.)
2. Would US Bank balk and shut down the credit card account? (I am hassle averse.)
3. I'm still hesitant because I don't like the idea of a $1K gift card being delivered at mid-day and then sitting on my front stoop until I come home after work. It's just too easy to steal the envelope. When you guys buy large denomination gift cards such as this, or from AmEx, is there something you do so that you feel more secure that the envelope won't get stolen?
GetawaysRus is offline  
Old Feb 14, 2013, 3:14 pm
  #70  
 
Join Date: May 2010
Posts: 189
I can't believe the Amex fee is under 2%. If someone wanted to, they could set their withholdings to 0 and make estimated payments on Fidelity Amex for 0.11% profit...Not enough for me to bother with though.
tjguitar85 is offline  
Old Feb 15, 2013, 3:32 am
  #71  
 
Join Date: Apr 2005
Location: ATL
Posts: 803
Originally Posted by tjguitar85
I can't believe the Amex fee is under 2%. If someone wanted to, they could set their withholdings to 0 and make estimated payments on Fidelity Amex for 0.11% profit...Not enough for me to bother with though.
Actually, it could be much more than .11% profit. Those fees are tax deductible for many folks including myself. My net fee is about 1.45% instead of 1.89. That would give me more than a 25% profit on the Fidelity Amex if I had one. Considering you can buy Starwood points on Starwoods site for a high 3.5 cents per point, this is where I bulk up on those points with every quarterly payment.
bigbuy is offline  
Old Feb 15, 2013, 3:09 pm
  #72  
 
Join Date: Apr 2011
Posts: 267
Has anyone here successfully use Bluebird to pay Property Taxes? Is it possible? I have used Bluebird to pay for my student loans and mortgage without a problem. My guess it should be possible to pay Property Taxes as well. Thanks.
nature1370 is offline  
Old Feb 17, 2013, 12:30 pm
  #73  
 
Join Date: Nov 2005
Location: Very near SFO
Programs: BA, AAL, UA, SW, HHonors, UR
Posts: 51
For doing these multiple transactions, I've found that using Roboform (or presumably most other password saving applications) can make it a matter of just a few clicks to fill out and submit all the online forms. Use the option "Save forms". Without something like that, I'd have to wonder just how much money I'd be making per hour paying $500 at a time.
FrequentSleeper is offline  
Old Feb 18, 2013, 7:06 am
  #74  
 
Join Date: Apr 2009
Location: Chicago
Programs: UA 1K, 1MM; former GS
Posts: 303
Manufactured Spend to Pay Taxes?

I will have a large tax bill this year. The cheapest convenience fee to use my 1.5x Visa is 1.88%, which works out to 1.25 cents per mile.

Debit cards have a convenience fee of a straight less than $4. Is there a way to load $40,000 on a debit or prepaid card and get miles?
FC ORD is offline  
Old Feb 18, 2013, 11:52 am
  #75  
 
Join Date: Aug 2012
Location: SoCal
Programs: Hyatt, SPG, IHG
Posts: 100
Originally Posted by FC ORD
I will have a large tax bill this year. The cheapest convenience fee to use my 1.5x Visa is 1.88%, which works out to 1.25 cents per mile.

Debit cards have a convenience fee of a straight less than $4. Is there a way to load $40,000 on a debit or prepaid card and get miles?
WoW, that is a Huge Tax bill, I think BB max is 5k. You could see if you can do a payment plan instead of a big bulk payment.
Shuai Zeng is offline  

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