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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 19, 2024, 4:36 pm
  #856  
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Join Date: Jul 2006
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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
What processor are you using to file your taxes?
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Old Mar 20, 2024, 12:42 am
  #857  
 
Join Date: Nov 2006
Programs: Marriott Platinum, Hilton Diamond, IHG Platinum
Posts: 3,819
Originally Posted by dhuey
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.
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
That's interesting, b/c a commenter on Frequent Miler said the following:

"I would wait until the payment shows up in your IRS account, which you can access online. In my experience, that can take several weeks... The issue is having the IRS process your return before the payment hits your account. They will determine that you’ve over-reported your payments, and then you’ll get to go through that hassle. Just wait for the payment to post."

Do you guys wait till payment shows on IRS.gov?
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italdesign is offline  
Old Mar 20, 2024, 6:13 am
  #858  
 
Join Date: Feb 2023
Posts: 54
Apparently, payments through ACI code as utilities for 5% cash back with US Bank Cash+:

https://www.doctorofcredit.com/a-com...omment-1816444

In this example, payment was made through PayPal, which was linked to the Cash+
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Old Mar 20, 2024, 9:08 am
  #859  
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Originally Posted by italdesign
That's interesting, b/c a commenter on Frequent Miler said the following:

"I would wait until the payment shows up in your IRS account, which you can access online. In my experience, that can take several weeks... The issue is having the IRS process your return before the payment hits your account. They will determine that youíve over-reported your payments, and then youíll get to go through that hassle. Just wait for the payment to post."

Do you guys wait till payment shows on IRS.gov?
Iím assuming it would take several weeks until after Jan. 15/16 for the tax-overpayer to be ready to file their return. Still need 1099s, W-2, etc.
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Old Mar 20, 2024, 9:40 am
  #860  
 
Join Date: Nov 2006
Programs: Marriott Platinum, Hilton Diamond, IHG Platinum
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For whatever reason, payUSAtax.com won't take my Chase card. Tried numerous times, always comes back with a CC error msg after 1 second, which sure doesn't seem like enough time for a CC authorization attempt.

No problem with Pay1040.
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Old Mar 20, 2024, 9:48 am
  #861  
mia
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Originally Posted by italdesign
.... payUSAtax.com won't take my Chase card.
Is it a Business card?
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Old Mar 20, 2024, 9:49 am
  #862  
 
Join Date: Nov 2006
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Originally Posted by mia
Is it a Business card?
Yes.
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Old Mar 20, 2024, 9:52 am
  #863  
mia
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Posts: 49,181
Originally Posted by italdesign
Yes.
Read here: Can't pay taxes with Chase INK?
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mia is offline  
Old Mar 20, 2024, 11:39 am
  #864  
 
Join Date: Sep 2003
Posts: 270
Originally Posted by hiker67
Apparently, payments through ACI code as utilities for 5% cash back with US Bank Cash+:

https://www.doctorofcredit.com/a-com...omment-1816444

In this example, payment was made through PayPal, which was linked to the Cash+
2k cap per quarter to get 5%, though, right?
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Old Mar 20, 2024, 11:44 am
  #865  
 
Join Date: Feb 2023
Posts: 54
Originally Posted by libralibra
2k cap per quarter to get 5%, though, right?
Yes. If your 5% category is already set for utilities this quarter, you can spend $2000 now, then another $2000 on April 1.
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Old Mar 20, 2024, 2:18 pm
  #866  
 
Join Date: Mar 2008
Posts: 1,570
Originally Posted by mia
They did, ironically take both the CIP and UA Business cards I used (I'm an employee card). At least in the sense it didn't error out and that was yesterday. IRS site shows "pending" for those payments (I think they'll do a MASS update tonight or Friday).

Otherwise, I thought I saw on the Frequent Miler podcast, you link the cards to your PayPal account and then for Payusatax, you use PayPal to pay and choose the Ink card.
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Old Mar 20, 2024, 2:23 pm
  #867  
 
Join Date: Nov 2006
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Originally Posted by hurnik
They did, ironically take both the CIP and UA Business cards I used..
On payUSAtax.com?
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Old Mar 20, 2024, 5:20 pm
  #868  
 
Join Date: Mar 2008
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Originally Posted by italdesign
On payUSAtax.com?
Yes
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hurnik is offline  
Old Mar 21, 2024, 8:24 am
  #869  
 
Join Date: Mar 2008
Posts: 1,570
Originally Posted by hurnik
Yes
The two payments at payUSAtax.com have posted on my Chase accounts (CIP and UA Business).
The IRS site shows my 3 payments (third was diff. payment processor and was Amex Plat Business) as pending with today's date.

My understanding is IF payUSAtax doesn't like your business card, it'll reject it immediately, in which case, link it to PayPal (or so Frequent Miler podcast says) and then go that route.
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Old Mar 21, 2024, 8:33 am
  #870  
 
Join Date: Jun 2023
Posts: 198
Originally Posted by hurnik
How are you all doing the overpayments with the IRS? Filing estimated payments? (ie: extension, estimated payments)?
Yep, extension payment through one of those 3 services that take credit cards. Last year I did estimated tax payment but extension seems better.
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