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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 Mar 13, 2024, 6:26 am
  #841  
 
Join Date: May 2022
Posts: 2,530
Not only can you, Chase encouraged it

https://www.chase.com/personal/credi...th-credit-card
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Old Mar 14, 2024, 9:06 am
  #842  
 
Join Date: Jul 2010
Location: Adelphi, MD
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Posts: 755
Yes. Should be fine. They charge about a 2% fee though.
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Old Mar 14, 2024, 9:18 am
  #843  
 
Join Date: Aug 2014
Posts: 1,326
Originally Posted by TyrannicalDuncery
Thanks! Do you know whether other Vanillas work on ACI?
My Vanilla/Sutton Bank/InComm did not. I'm just trying to figure out how to get these to liquidate via MO because the $479 got the "not authorized." Other Vanillas serviced by BHN would probably have better success I imagine
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Last edited by DeltaNeutral28; Mar 14, 2024 at 9:19 am Reason: .
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Old Mar 14, 2024, 9:59 am
  #844  
 
Join Date: Jul 2010
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Posts: 755
I value Chase Sapphire Preferred points at about 1.25% on regular spend. You only get 1% back but if you use the Chase travel portal, you get a 25% discount on travel (flights, Hotels)! So a 2% fee works out about even.
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Old Mar 14, 2024, 1:30 pm
  #845  
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I used to charge government things on my rewards credit card and I considered it worthy of the fee.

so yes - just factor in the fee for using the card. Sub is great. One consideration - would you earn the sub if you didn’t use card for taxes? Is it that difficult to charge 5k or 10k or whatever your minimum requirement is for the sub?

$200 or even $20 fee is still money used that could go elsewhere. Now I don’t charge government things with a fee. I can’t avoid it at restaurants etc as I try to carry $20 or less.
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Old Mar 14, 2024, 2:33 pm
  #846  
 
Join Date: Jun 2023
Posts: 200
Originally Posted by DeltaNeutral28
My Vanilla/Sutton Bank/InComm did not. I'm just trying to figure out how to get these to liquidate via MO because the $479 got the "not authorized." Other Vanillas serviced by BHN would probably have better success I imagine
Mine worked on Pay1040.
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Old Mar 14, 2024, 2:46 pm
  #847  
 
Join Date: Jan 2020
Posts: 5
1040 Current or 1040-ES

Is there a recent to use 4868 extension if you pay the prior year taxes (2023) during the open month of Jan 1 - April 15, 2024? Is there a delay in posting?
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Old Mar 14, 2024, 3:59 pm
  #848  
 
Join Date: Jun 2023
Posts: 200
Originally Posted by coast
Is there a recent to use 4868 extension if you pay the prior year taxes (2023) during the open month of Jan 1 - April 15, 2024? Is there a delay in posting?
I'm no expert. The reason I did it was in order to intentionally overpay. I have intentionally overpaid in the past either for MS purposes or to buy extra I-bonds.

I guess it could also make sense if you're sure you're paying enough but you don't have enough time to get the documents together.
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Old Mar 18, 2024, 8:34 pm
  #849  
 
Join Date: Mar 2008
Posts: 1,570
How are you all doing the overpayments with the IRS? Filing estimated payments? (ie: extension, estimated payments)?
Going directly to the payment processors, paying and then eFiling your return? But if you do that, Turbotax (for example) won't know anything about your overpayment (and there's no section to enter it unless you do estimated taxes).

I don't see a way to do this with TurboTax (I mean you can pay independently but there's no real option I can see in TurboTax to indicate you overpaid when you eFile).
Short of filing for an extension and then overpaying estimated taxes. But apparently that'll delay your refund big time
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Last edited by hurnik; Mar 18, 2024 at 8:42 pm
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Old Mar 18, 2024, 10:08 pm
  #850  
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Originally Posted by hurnik
How are you all doing the overpayments with the IRS? Filing estimated payments? (ie: extension, estimated payments)?
Going directly to the payment processors, paying and then eFiling your return? But if you do that, Turbotax (for example) won't know anything about your overpayment (and there's no section to enter it unless you do estimated taxes).

I don't see a way to do this with TurboTax (I mean you can pay independently but there's no real option I can see in TurboTax to indicate you overpaid when you eFile).
Short of filing for an extension and then overpaying estimated taxes. But apparently that'll delay your refund big time
If the idea is to make a big overpayment, I think the best approach would be to make it on the last possible day for 4th quarter estimated taxes (Jan. 16, 2024 for tax year 2023). Then file your return ASAP to get the refund quickly. There shouldn’t be much of a gap between when your cc payment is due and when you get your refund.
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Old Mar 19, 2024, 5:12 am
  #851  
 
Join Date: May 2022
Posts: 2,530
Originally Posted by hurnik
How are you all doing the overpayments with the IRS? Filing estimated payments? (ie: extension, estimated payments)?
Going directly to the payment processors, paying and then eFiling your return? But if you do that, Turbotax (for example) won't know anything about your overpayment (and there's no section to enter it unless you do estimated taxes).

I don't see a way to do this with TurboTax (I mean you can pay independently but there's no real option I can see in TurboTax to indicate you overpaid when you eFile).
Short of filing for an extension and then overpaying estimated taxes. But apparently that'll delay your refund big time
I just do a return payment through the website, whichever one is cheapest. Then I file my return the next day and request a refund. Normally get it back 2 weeks later, before the credit card statement even closes
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Old Mar 19, 2024, 8:17 am
  #852  
 
Join Date: Mar 2008
Posts: 1,570
Originally Posted by Schnit
I just do a return payment through the website, whichever one is cheapest. Then I file my return the next day and request a refund. Normally get it back 2 weeks later, before the credit card statement even closes
Gotcha

So basically let's say your return says you owe $200.
You use third party website to pay via CC and overpay (let's say, $5,000)
Then file return (eFile) the next day or two after.

From my reading you shouldn't have to request a refund from the IRS? Their website says they'll automatically refund it to you (may take 4-6 weeks) unless you direct them to apply the overpayment to next year's taxes. Or do you speed things up by using Form 843?
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Old Mar 19, 2024, 10:34 am
  #853  
 
Join Date: May 2022
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Originally Posted by hurnik
Gotcha

So basically let's say your return says you owe $200.
You use third party website to pay via CC and overpay (let's say, $5,000)
Then file return (eFile) the next day or two after.

From my reading you shouldn't have to request a refund from the IRS? Their website says they'll automatically refund it to you (may take 4-6 weeks) unless you direct them to apply the overpayment to next year's taxes. Or do you speed things up by using Form 843?
Just request a refund on your return, and give your routing info for the refund. Electronic refunds are much quicker than check.

I typically overpay by $15,000 using my Hilton Surpass Card, which means I get 45,000 points and a free night. Not a bad deal for about $275 in costs. My surpass card is in the sock drawer the rest of the year besides for the quarterly credits
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Old Mar 19, 2024, 10:47 am
  #854  
 
Join Date: Mar 2008
Posts: 1,570
Originally Posted by Schnit
Just request a refund on your return, and give your routing info for the refund. Electronic refunds are much quicker than check.

I typically overpay by $15,000 using my Hilton Surpass Card, which means I get 45,000 points and a free night. Not a bad deal for about $275 in costs. My surpass card is in the sock drawer the rest of the year besides for the quarterly credits
Great, thanks! But I actually owe this year (almost $2,000). So not sure how to go about requesting a refund on the return. Using Turbo Tax if it matters, so the only spots I can find for inputting taxes paid are in the Estimates section. Which would require either filing an extension or filing for estimated taxes.

Looks like you are supposed to use estimated taxes with federal extension:

https://thefinancebuff.com/overpay-t...#htoc-turbotax

Last edited by hurnik; Mar 19, 2024 at 11:50 am
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Old Mar 19, 2024, 3:16 pm
  #855  
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Unfortunately (depending on your perspective) I will owe a significant amount this year so a couple of questions:
  • Can I do one US fed income tax payment per quarter with each service? In this case I would be looking at doing 1 in March and 1 in April. These would both be for 2023 annual return, not 2024 quarterly.
  • Can I pay 2023 before I file annual 2023? Assume yes, I don't plan to file until April.
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