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 Jan 6, 2024, 3:22 pm
  #796  
 
Join Date: Aug 2021
Posts: 207
Definitely do it.

At a 3x points rate, you may as well pay extra taxes and get a refund.
avogadro is offline  
Old Jan 6, 2024, 5:40 pm
  #797  
nsx
Moderator: Southwest Airlines, Capital One
Hyatt Contributor Badge
 
Join Date: Sep 1999
Location: California
Programs: WN A-list preferred, United Club Lietime (sic) Member
Posts: 21,738
I forget which payment processors allow the credit card billing address to be different than the return filing address and which do not. Does anyone here know?

Edit: PayUSAtax allows the billing zip code to differ from the filing address. I don't know about the others yet.

Last edited by nsx; Jan 6, 2024 at 8:32 pm
nsx is offline  
Old Jan 6, 2024, 6:59 pm
  #798  
FlyerTalk Evangelist
 
Join Date: Mar 2006
Location: DFW
Programs: AA 1M
Posts: 31,526
Does the IRS give anyone a hard time on large refunds?
UA Fan is offline  
Old Jan 6, 2024, 7:54 pm
  #799  
 
Join Date: Feb 2011
Location: NYC suburbs
Programs: UA LT Gold (BIS), AA LT Plat (CC SUBs & BD), Hilton Dia (CC), Hyatt Glob (BIB), et. al.
Posts: 3,437
Originally Posted by kevinwangjk
There is a new Freedom Unlimited offer that gives new applicants doubling the amount of UR points for the first year, …
Undoubtedly many other people would be interested in such an offer. Perhaps you would be so kind as to elaborate. Is it a targeted offer? If not, perhaps a link?

Originally Posted by UA Fan
Does the IRS give anyone a hard time on large refunds?
It all depends on what the meaning of the word is is. Sorry, I meant it depends on the definitions of “hard time” (in this context) and “large”.

Last year, due to significantly higher taxes paid 2 or 3 years ago (due to higher investment income) and paying estimated taxes of 110% of the previous year’s higher taxes, I received ~$150K IRS refund and ~30K NYS refund. Both were by direct deposit, IRS was about 6-7 weeks after NYS, mid May vs late March. I’m not at home right now so I cannot refresh my memory for details (vaguely recall emails to and from my accountant) but IIRC the IRS sent me some sort of form to verify I was requesting a refund. Please let me know if you’d like further details.

(It was fun explaining to my relatively new accountant why I didn’t want refunds applied to last year’s taxes due. No self-respecting “pay taxes with a credit card points and miles aficionado” would ever apply a refund to future taxes !)
nsx, SPN Lifer, EmailKid and 1 others like this.

Last edited by Dr Jabadski; Mar 26, 2024 at 8:55 pm Reason: clarification
Dr Jabadski is offline  
Old Jan 6, 2024, 9:04 pm
  #800  
 
Join Date: Dec 2012
Posts: 314
Oh I didn't include a link because it's a widely available offer, I've heard it from all types of youtube channels and blogs. If you search for it you can find it easily. Here is one blogger I decided to use his link to apply from https://www.asksebby.com/credit-card...limited-review
Dr Jabadski likes this.
kevinwangjk is offline  
Old Jan 6, 2024, 9:17 pm
  #801  
mia
Flyertalk Posting Legend Moderator: Credit Card Programs, American Express, Capital One, Chase, Citi, Diners Club, Signatures.
Original Poster
 
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: HH & IHG Gold; Marriott & AA Perpetual Platinum
Posts: 49,198
Originally Posted by Dr Jabadski
Undoubtedly many other people would be interested in such an offer.
Discussion here: Chase Freedom Unlimited - Double cash back for first 12 months of spend
Dr Jabadski likes this.
mia is online now  
Old Jan 6, 2024, 9:26 pm
  #802  
 
Join Date: Aug 2021
Posts: 207
Originally Posted by UA Fan
Does the IRS give anyone a hard time on large refunds?
I overpaid by quite a bit last year and got a large refund. I didn't get a hard time. I plan to do it again this year.

Just be conscious of the opportunity cost of that money at 5% interest rates. Every month loses out on 0.4% of earnings.
SPN Lifer likes this.
avogadro is offline  
Old Jan 7, 2024, 5:35 am
  #803  
 
Join Date: Aug 2012
Location: BOS/MHT/PVD/BDL
Programs: Belong to Many but No Longer Loyal to Any
Posts: 882
Originally Posted by kevinwangjk
There is a new Freedom Unlimited offer that gives new applicants doubling the amount of UR points for the first year, could be very nice if you have a large tax bill. Doubt it but anyone think there is risk on the doubling not applying to tax payments? I have over 100k in taxes owed that I need to pay by April.
I should think tax payments would qualify. They outright state that tax payments count towards signup bonuses.
https://www.chase.com/personal/credi...th-credit-card
flyaxa is offline  
Old Jan 7, 2024, 11:33 am
  #804  
 
Join Date: Dec 2012
Posts: 314
So I applied for the card, and realized that it not only has double Cashback, but also 0% APR for 15 months! I’m going to move some credits from other cards to this one, and then make large tax payments and just take an interest free loan from chase for 15 months, while earning double points.

is this too good to be true? I know the gotchas like I have to make minimum payments each month, pay it all in the end, and it could also affect my credit score by increasing my utilization. But if I just put the money saved into a CD that matures in 15 months, and have enough credit available from all my other cards, is there something else that I need to be careful about? I won’t have any problem paying it off at the end, but carrying a balance, not to mention possibly 70k+, makes me feel I might be missing something
josephstern likes this.
kevinwangjk is offline  
Old Jan 7, 2024, 11:40 am
  #805  
 
Join Date: Aug 2021
Posts: 207
Not too good to be true.

Just make sure to thank your friends who pay interest and late fees to make this all possible.
hhdl likes this.
avogadro is offline  
Old Jan 7, 2024, 12:55 pm
  #806  
 
Join Date: Sep 2003
Posts: 270
Originally Posted by kevinwangjk
carrying a balance, not to mention possibly 70k+, makes me feel I might be missing something
Seems to work if you actually have 70k taxes to charge. But there's no signup bonus, so you do need high enough spend to cover the difference. Eg just getting the 1.5% Ink card gets $900 up front, which would take 60k of tax payments on the double freedom offer to equal. I ended up passing on this card.
nsx likes this.
libralibra is offline  
Old Jan 7, 2024, 4:55 pm
  #807  
 
Join Date: Dec 2012
Posts: 314
Originally Posted by libralibra
Seems to work if you actually have 70k taxes to charge. But there's no signup bonus, so you do need high enough spend to cover the difference. Eg just getting the 1.5% Ink card gets $900 up front, which would take 60k of tax payments on the double freedom offer to equal. I ended up passing on this card.
oh yeah I’m getting a few cards between myself and wife before applying the rest to this card actually. I have a lot more than 70k taxes owed unfortunately but this is making the tax bill feel a lot sweeter discovering that I can pay taxes with CCs
kevinwangjk is offline  
Old Jan 8, 2024, 1:09 am
  #808  
 
Join Date: Feb 2011
Location: NYC suburbs
Programs: UA LT Gold (BIS), AA LT Plat (CC SUBs & BD), Hilton Dia (CC), Hyatt Glob (BIB), et. al.
Posts: 3,437
Originally Posted by kevinwangjk
… tax bill feel a lot sweeter discovering that I can pay taxes with CCs
Agreed, a nice and sometimes lucrative perk. Be aware that there are occasional and inconsistent reports in the past year on the Can't pay taxes with Chase INK? thread and earlier on this thread of inability to pay certain taxes with certain Chase Ink cards.
SPN Lifer likes this.
Dr Jabadski is offline  
Old Jan 8, 2024, 11:08 am
  #809  
 
Join Date: May 2010
Posts: 593
Originally Posted by kevinwangjk
I have a lot more than 70k taxes owed unfortunately but this is making the tax bill feel a lot sweeter discovering that I can pay taxes with CCs
When you say more than 70K taxes owed do you mean just from Q4 2023?
US taxes are pay-as-you-go. The IRS charges interest & penalty if you under withheld (or did not remit sufficient estimated tax payment each quarter).
Do not skip paying earlier in the year and wait until April to pay just for the sake of credit card rewards.

(Paying estimated taxes quarterly via credit card instead of withholding is a totally fine strategy if you have the math right).
SPN Lifer likes this.
Ragnarok is offline  
Old Jan 8, 2024, 1:47 pm
  #810  
 
Join Date: Jun 2010
Posts: 400
Paying under Spouse as Primary

Originally Posted by flyaxa
We pay quarterly estimates and have been doing this for quite a few years now. We list either myself or spouse as primary. Doesn't seem to matter. I do always check our IRS accounts to make sure the payments have posted.
Will the IRS web site show the payments as being transferred over from the spouse’s account to the primary tax filers? Or will they show separately per spouse but then you can just aggregate together on your tax return?
Roka 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.