Go Back  FlyerTalk Forums > Miles&Points > Credit, Debit and Prepaid Card Programs > Credit Card Programs
Reload this Page >

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


Print Wikipost

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

Old Apr 8, 2023, 11:58 am
  #736  
 
Join Date: Apr 2015
Posts: 260
Originally Posted by abc5
hi. no i was not aware of having to include the 7k$ pump, into my return. The refund tabulated on my return submitted by my preparer was not 12k.
You need to file an amended return with the extra payment included.
satellite779 is offline  
Old Apr 8, 2023, 12:44 pm
  #737  
 
Join Date: Nov 2011
Posts: 150
Originally Posted by satellite779
You need to file an amended return with the extra payment included.
An ammended return, I see.
Do these payment providers, ie: the one I used, pay1040, furnish any 1099 types of forms for us?

I don't have anything to provide my tax preparer that has proof of my extra payments, other than some screencaps and some emails after i submitted payments.
abc5 is offline  
Old Apr 8, 2023, 12:48 pm
  #738  
 
Join Date: Apr 2015
Posts: 260
Originally Posted by abc5
An ammended return, I see.
Do these payment providers, ie: the one I used, pay1040, furnish any 1099 types of forms for us?

I don't have anything to provide my tax preparer that has proof of my extra payments, other than some screencaps and some emails after i submitted payments.
IRS is aware of your payment if you provided your SSN when you made your payment. It's just that they will not give you your money back unless you ask for it. Just give the amount and the date to your tax preparer and it will be handled.
satellite779 is offline  
Old Apr 8, 2023, 12:57 pm
  #739  
 
Join Date: Nov 2011
Posts: 150
Originally Posted by satellite779
IRS is aware of your payment if you provided your SSN when you made your payment. It's just that they will not give you your money back unless you ask for it. Just give the amount and the date to your tax preparer and it will be handled.

I see. Just spoke to my preparer... one wrinkle in this is, why did the website allow me to make a payment on March of 2023, for tax year 2022.. he said the ability to do that for 2022 would have ended in Jan of 2023.

He asked me if i can call them to change it to be for 2023...
abc5 is offline  
Old Apr 8, 2023, 1:00 pm
  #740  
 
Join Date: Apr 2015
Posts: 260
Originally Posted by abc5
I see. Just spoke to my preparer... one wrinkle in this is, why did the website allow me to make a payment on March of 2023, for tax year 2022.. he said the ability to do that for 2022 would have ended in Jan of 2023.

He asked me if i can call them to change it to be for 2023...
Paying for 2022 in March/April 2023 is totally fine. This is not estimated quarterly taxes but year end taxes. Don't apply them to 2023 as you will wait 1 year to get the money back. Interest rates are 5% so you would lose $350 on the $7k that would otherwise earn interest. Make sure he applies them for 2022.

Create an account on IRS.gov and check if your payment was actually applied to 2022.
SPN Lifer likes this.

Last edited by satellite779; Apr 9, 2023 at 5:36 am
satellite779 is offline  
Old Apr 8, 2023, 4:00 pm
  #741  
Moderator: Hyatt, American Express; FlyerTalk Evangelist
 
Join Date: Jun 2015
Location: WAS
Programs: :rolleyes:, DL DM, Mlife Plat, Caesars Diam, Marriott Tit, UA Gold, Hyatt Glob, invol FT beta tester
Posts: 19,218
Originally Posted by abc5
Do these payment providers, ie: the one I used, pay1040, furnish any 1099 types of forms for us?
You receive a 1099 when other entities report payments that they made to you.

Originally Posted by abc5
I don't have anything to provide my tax preparer that has proof of my extra payments, other than some screencaps and some emails after i submitted payments.
You shouldn't need to _prove_ anything to your preparer, but you do need to let them know about all the payments you made (don't know about yours but the ones I've engaged have all had a clause along the lines of, we prepare your tax returns based on the info you give us and you're responsible for the accuracy of the information).

You might later need to be able to prove to the IRS that you made a payment when you say you did, but generally as satellite779 said provided that you entered your info correctly then there shouldn't be any problems. However if your return says you paid $20,000 then that is what the IRS will base your refund on (or amount owed etc.) even if you actually paid $25,000.

I typically print out the post-payment confirmation screen to PDF in case I ever need to produce it in the future, but if you forgot to do that at the time, the email receipt from pay1040 notes that 'If you would like a paper receipt, please visit www.pay1040.com and select the Payment Verification option located under Taxpayer Tools at the top of the page." for which the direct link is: https://www.pay1040.com/#/request-verification
SPN Lifer and abc5 like this.

Last edited by Zorak; Apr 8, 2023 at 4:08 pm
Zorak is offline  
Old Apr 9, 2023, 9:12 am
  #742  
 
Join Date: Feb 2015
Posts: 37
Originally Posted by satellite779
You can make 1040 (not 1040-ES) payments until you file your return. All the tax payment websites accept payments. These are designed for people who owe, but it can be used to overpay. These are great for the credit card game, as you can overpay just a couple of days before filing a return, so you minimize the time money is stuck with IRS.

I never mentioned estimated taxes in my posts above (although I did those as well).
Such a brilliant, I am new to the game and first time paid my tax due last week through Credit Card. I have a question for you to make sure I understand it correctly. I submitted my tax last week and I paid the last year's due to IRS (including the penalty sadly). So could I still overpay my tax for 2022 (before April 15th) and expect a refund? or since i submitted my taxes already, its done deal.

Also, I was planning to pay quarterly payments for the year 2023 to avoid penalties and all but instead, could I just make payments in Jan/Feb of 2024 and avoid penalties? or am I understanding it wrong? Thank you for your help.
Rik_Des is offline  
Old Apr 9, 2023, 9:40 am
  #743  
 
Join Date: Apr 2015
Posts: 260
Originally Posted by Rik_Des
Such a brilliant, I am new to the game and first time paid my tax due last week through Credit Card. I have a question for you to make sure I understand it correctly. I submitted my tax last week and I paid the last year's due to IRS (including the penalty sadly). So could I still overpay my tax for 2022 (before April 15th) and expect a refund? or since i submitted my taxes already, its done deal.

Also, I was planning to pay quarterly payments for the year 2023 to avoid penalties and all but instead, could I just make payments in Jan/Feb of 2024 and avoid penalties? or am I understanding it wrong? Thank you for your help.
I think you can still overpay for 2022 but you need to file an amended return with that payment included. You need to decide if that's worth the hassle.

If you are under withholding, you need to pay quarterly estimated taxes. Otherwise, you're facing penalties/interest if you just pay at the end of the year if you owe over a certain amount/percentage. Read about safe harbor rules: https://www.hrblock.com/tax-center/i...t-tax-penalty/
Rik_Des likes this.
satellite779 is offline  
Old Apr 9, 2023, 11:34 am
  #744  
 
Join Date: Feb 2015
Posts: 37
Originally Posted by satellite779
I think you can still overpay for 2022 but you need to file an amended return with that payment included. You need to decide if that's worth the hassle.

If you are under withholding, you need to pay quarterly estimated taxes. Otherwise, you're facing penalties/interest if you just pay at the end of the year if you owe over a certain amount/percentage. Read about safe harbor rules: https://www.hrblock.com/tax-center/i...t-tax-penalty/
got it, thank you for answering my questions. I will just go with my original plan and pay quarterly tax and then as you have done, just overpay in April of 2024 before I submit my taxes for 2023
Rik_Des is offline  
Old Apr 9, 2023, 12:42 pm
  #745  
FlyerTalk Evangelist
 
Join Date: Dec 2003
Location: Not here; there!
Programs: AA Lifetime Gold
Posts: 30,381
Originally Posted by Rik_Des
got it, thank you for answering my questions. I will just go with my original plan and pay quarterly tax and then as you have done, just overpay in April of 2024 before I submit my taxes for 2023
Keep in mind that if you are due a refund on your Federal income tax, you can opt to take up to $5,000 of your refund in the form of paper, Series I Savings Bonds, by filing IRS Form 8888 with your return. The interest rate on Series I bonds changes every May 1 and November 1. Current annualized interest rate is 6.89%. More information here:

https://treasurydirect.gov/savings-bonds/
SPN Lifer, EmailKid, abc5 and 1 others like this.
guv1976 is offline  
Old Apr 9, 2023, 2:42 pm
  #746  
 
Join Date: Jan 2023
Posts: 34
Originally Posted by guv1976
Keep in mind that if you are due a refund on your Federal income tax, you can opt to take up to $5,000 of your refund in the form of paper, Series I Savings Bonds, by filing IRS Form 8888 with your return. The interest rate on Series I bonds changes every May 1 and November 1. Current annualized interest rate is 6.89%. More information here:
https://treasurydirect.gov/savings-bonds/
current I bonds rates are better than savings rates but with the current rates it's not as enticing anymore because if you cash out an I bond before 5 years you lose 3 months of interest. so currently that would make effective rate at 5.17%
SPN Lifer likes this.
ctle is offline  
Old Apr 10, 2023, 7:23 am
  #747  
 
Join Date: Feb 2016
Location: New York
Programs: Navy A-4 Skyhawk, B727 FE/FO, S80 FO, B757/767 FO, B737 CA
Posts: 1,350
Originally Posted by ctle
current I bonds rates are better than savings rates but with the current rates it's not as enticing anymore because if you cash out an I bond before 5 years you lose 3 months of interest. so currently that would make effective rate at 5.17%
Actually, the 5.17% is only if you cash out exactly at the 1 year mark. The further out in time, the less of a percentage hit it is. And that's only if rates were to stay exactly the same. If inflation goes down then the last 3 months hit becomes less as the rate on the bonds decreases with it.
nsx and mia like this.

Last edited by fredc84; Apr 10, 2023 at 7:39 am
fredc84 is offline  
Old Apr 11, 2023, 4:00 pm
  #748  
 
Join Date: Jan 2023
Posts: 34
Originally Posted by fredc84
Actually, the 5.17% is only if you cash out exactly at the 1 year mark. The further out in time, the less of a percentage hit it is. And that's only if rates were to stay exactly the same. If inflation goes down then the last 3 months hit becomes less as the rate on the bonds decreases with it.
yes and no. If you keep the bonds for 5 years you'll have no penalty. but the interest rate on these change every 6 months. the base rate is 0.4% and with the current fed's overall goal to tamp down on inflation I would assume that the overall rate should either drop if no the next period then the one after that.
https://www.treasurydirect.gov/news/...e-11-02-rates/
ctle is offline  
Old Apr 11, 2023, 8:31 pm
  #749  
 
Join Date: Feb 2016
Location: New York
Programs: Navy A-4 Skyhawk, B727 FE/FO, S80 FO, B757/767 FO, B737 CA
Posts: 1,350
Originally Posted by ctle
yes and no. If you keep the bonds for 5 years you'll have no penalty. but the interest rate on these change every 6 months. the base rate is 0.4% and with the current fed's overall goal to tamp down on inflation I would assume that the overall rate should either drop if no the next period then the one after that.
https://www.treasurydirect.gov/news/...e-11-02-rates/
Yes, at 5 years the penalty goes away...but that's not what I'm talking about. But the last three months' hit gets diluted the longer that the bonds are held. If the bonds are held 2 years, the effective rate goes up from 5.17% to around 6.3% (assuming the rate theoretically stayed the same). Think of it as if the first year was 9 months of interest which is why the hit looks so dramatic, but every subsequent year is a full 12 months, which dilutes the hit (on a percentage basis).
fredc84 is offline  
Old Apr 11, 2023, 9:53 pm
  #750  
Moderator: Chase Ultimate Rewards
 
Join Date: Apr 2005
Location: SFO
Programs: UA 2P, MR LT Plat, IHG Plat, BW Dia, HH Au, Avis PC
Posts: 5,488
Originally Posted by ctle
the base rate is 0.4% and with the current fed's overall goal to tamp down on inflation I would assume that the overall rate should either drop if no the next period then the one after that.
It is likely that any other risk-free rate will also decrease in a similar pattern.
MDtR-Chicago is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.