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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 Jan 18, 2024, 3:37 pm
  #826  
 
Join Date: Aug 2021
Posts: 207
Originally Posted by satellite779
You can still overpay via 1040 (not 1040-ES) even after Feb 1st.
Just choose "1040 Current Tax Return 2023" and pay as much as you want.
avogadro is offline  
Old Jan 18, 2024, 4:06 pm
  #827  
 
Join Date: Sep 2003
Posts: 270
Originally Posted by avogadro
Just choose "1040 Current Tax Return 2023" and pay as much as you want.
It might be safer to choose "Form 4868 Tax Extension" since then you could enter that amount somewhere on your taxes to get it back.

Not sure what happens if the "1040 Current Tax Return 2023" doesn't match what you eventually file. You would hope they just add it all up and do the right thing, but who knows.
libralibra is offline  
Old Jan 18, 2024, 4:24 pm
  #828  
 
Join Date: Jun 2018
Posts: 29
Originally Posted by libralibra
It might be safer to choose "Form 4868 Tax Extension" since then you could enter that amount somewhere on your taxes to get it back.

Not sure what happens if the "1040 Current Tax Return 2023" doesn't match what you eventually file. You would hope they just add it all up and do the right thing, but who knows.
My thoughts as well. I did notice that on FreeTaxUSA there's a field at the very bottom of the "2023 Estimated Payments" section that asks for any payments you made "After January 16, 2024", so I assume that's where a normal 1040 payment after Jan 16th would go. But still, I think I'm still gonna go with the 4868 route, which has worked flawlessly in the past for me for overpayments of $4000-5000. This year I'm planning on doing something like $10-15K (Amex Plat Biz MSR), though. Hopefully it doesn't bite me in the ... with Amex.

Last edited by ccueto36; Jan 18, 2024 at 4:29 pm
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Old Jan 18, 2024, 5:26 pm
  #829  
nsx
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Originally Posted by libralibra
It might be safer to choose "Form 4868 Tax Extension" since then you could enter that amount somewhere on your taxes to get it back.

Not sure what happens if the "1040 Current Tax Return 2023" doesn't match what you eventually file. You would hope they just add it all up and do the right thing, but who knows.
I forgot to include one of my estimated payments last year and the IRS sent me a refund.

Block Tax thinks the deadline was January 15, 2024 not January 16. An update may fix that.
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Old Jan 19, 2024, 8:33 am
  #830  
 
Join Date: Sep 2008
Location: AUS
Programs: BAEC Gold, AA PPro, Hyatt Globalist, Amex Plat
Posts: 7,169
Originally Posted by avogadro
Just choose "1040 Current Tax Return 2023" and pay as much as you want.
Where do you annotate that on your tax forms? 1040 form has a line that explicitly allows entry of "Estimated Tax Payments" but it seems like this scenario isn't technically an estimated tax payment. Would it still be reported on that same line?

Regards
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Old Jan 19, 2024, 9:43 am
  #831  
 
Join Date: Aug 2021
Posts: 207
Yes, I included the payments into "Estimated Tax Payments" last year and it worked for me.

FWIW, I don't have a tax guy and I didn't do any research. But it worked.
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Old Feb 29, 2024, 3:53 pm
  #832  
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Originally Posted by scubadu
Where do you annotate that on your tax forms? 1040 form has a line that explicitly allows entry of "Estimated Tax Payments" but it seems like this scenario isn't technically an estimated tax payment. Would it still be reported on that same line?

Regards
I'm trying to figure this out also. Maybe line 25c? I really don't like the idea of shoe-horning this into my return. Seems like a red flag that would put my return in line for extra scrutiny.
josephstern is offline  
Old Feb 29, 2024, 5:23 pm
  #833  
 
Join Date: Aug 2021
Posts: 207
Turbotax has fields for "Additional payments" where you can enter in the date and the amount. Those get summed up and entered directly into line 26.
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Old Mar 6, 2024, 12:47 pm
  #834  
 
Join Date: Aug 2021
Posts: 207
Anyone else having problems with paypal through payUSAtax?

I get an error at the last step of the payment process.

And then I receive this email:

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Old Mar 7, 2024, 6:45 pm
  #835  
 
Join Date: Aug 2014
Posts: 1,326
I have used credit cards with the 3 websites for Federal taxes the past two years, no problem. Using VGC today. 1) PayUSA declined my Vanilla VGC issued by Sutton Bank, it denied the transaction and said the billing zip code doesn't match payment zip code. Went online to register the Vanilla VGC so it would match, and I couldn't find anywhere to register it, it just said if you have trouble with a merchant online, to pound sand and go elsewhere with it. I called in, to the # on the back, and surprisingly the rep took my billing info and added it to the card, however the transaction at PayUSA still declined afterward (again, weird I can't register it with billing info online for this specific Vanilla VGC?)?

2) Pay1040 will not let me login to my account as I try to reset my password and then it emails me a temporary password, and then I use said temporary password and it still says not authorized? So I check out as a guest, and interestingly, the Vanilla VGC worked. I'm assuming there is a primer on which VGC and MCGC work with each of the three merchants? My apologies if so I went back to 2023 on this thread and didn't see anything.
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Old Mar 7, 2024, 6:52 pm
  #836  
 
Join Date: Aug 2021
Posts: 207
Originally Posted by avogadro
Anyone else having problems with paypal through payUSAtax?
I tried again today and it worked. These services are finicky.
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Old Mar 11, 2024, 12:22 pm
  #837  
 
Join Date: Jun 2023
Posts: 198
2024-03-11: Tried to pay today (2023 form 4868) via ACI using Sutton InComm Vanilla physical from WM (Happy Birthday type), purchased a few weeks ago. Failed.

A few others recently had the same experience; see comments here (no affiliation).

I got to the end of the checkout process, and it said my card couldn't be charged. Nothing is wrong with the card as far as I know: the full balance shows as available via phone and web interface, I just used it for an online payment yesterday, another online payment the week before. The total amount I tried to pay (including ACI's fee) was equal to the remaining balance on the card. Total amount was under $50. I did not try the click to pay option, or pay through paypal. This was on a windows laptop using chrome through a US VPN (nearby location).

Tried Pay1040 right after that, it seems to have worked. Again, using up the full balance on the card after fees. Charge shows as pending on Vanilla web interface.

Fees were 2.20 for ACI, 2.50 for Pay1040, as usual. Just did a small payment as a test.
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Last edited by TyrannicalDuncery; Mar 11, 2024 at 2:45 pm
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Old Mar 11, 2024, 2:49 pm
  #838  
 
Join Date: Aug 2014
Posts: 1,326
.

Originally Posted by TyrannicalDuncery
2024-03-11: Tried to pay today (2023 form 4868) via ACI using Sutton InComm Vanilla physical from WM (Happy Birthday type), purchased a few weeks ago. Failed.

A few others recently had the same experience; see comments here (no affiliation).

I got to the end of the checkout process, and it said my card couldn't be charged. Nothing is wrong with the card as far as I know: the full balance shows as available via phone and web interface, I just used it for an online payment yesterday, another online payment the week before. The total amount I tried to pay (including ACI's fee) was equal to the remaining balance on the card. Total amount was under $50. I did not try the click to pay option, or pay through paypal. This was on a windows laptop using chrome through a US VPN (nearby location).

Tried Pay1040 right after that, it seems to have worked. Again, using up the full balance on the card after fees. Charge shows as pending on Vanilla web interface.

Fees were 2.20 for ACI, 2.50 for Pay1040, as usual. Just did a small payment as a test.
I don't know how frequently things change, but Vanillas by InComm are only processed by Pay1040. PayUSA and ACI do not accept them as I tried multiple Vanillas/InComm mutliple times on ACI/PayUSA. Worked fine with Pay1040.
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Old Mar 11, 2024, 5:27 pm
  #839  
 
Join Date: Jun 2023
Posts: 198
Originally Posted by DeltaNeutral28
I don't know how frequently things change, but Vanillas by InComm are only processed by Pay1040. PayUSA and ACI do not accept them as I tried multiple Vanillas/InComm mutliple times on ACI/PayUSA. Worked fine with Pay1040.
Thanks! Do you know whether other Vanillas work on ACI?
TyrannicalDuncery is offline  
Old Mar 13, 2024, 5:51 am
  #840  
 
Join Date: Oct 2016
Posts: 127
Taxes with Chase card

Is it fine to pay taxes with a Chase card to hit a signup Bonus?
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