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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.
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- 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

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Citi Double Cash 2%

Earn Status/Elite qualifying points:
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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 21, 2024, 11:47 am
  #871  
 
Join Date: Jun 2023
Posts: 198
Confirmation numbers

This may be well-known, but I just wanted to note my experience with confirmation numbers when making extension payments:
  • Paid with Pay1040: Got an immediate initial confirmation email with an internal confirmation number, then a day or two later I got an email telling me that the payment was accepted by the IRS and giving a 15-digit confirmation number that the IRS gave them; I think this is also called the "EFT number" and has the same format as the confirmation numbers from DirectPay.
  • Paid with PayUSATax: Got an initial confirmation email with an internal confirmation number, then 4 days later I emailed them back. After that, they emailed me right away saying that the payment was accepted by the IRS and giving a 15-digit confirmation number that the IRS gave them.
I think that "IRS accepted it" is not the same thing as "IRS can find it"; a few days after that second email from Pay1040, I called the IRS to see whether they could find that payment yet. Not yet. They said 2-3 weeks. (I prefer to call instead of setting up an IRS.gov account.)

Update: 13 or 14 days after the Pay1040 payment, I called the IRS again and they were able to find it. I didn't ask about the PayUSATax one (I made payment that a bit later). I'm sure the following is old news but, even though I have an EFT number for that Pay1040 payment, I can't enter it into the payment lookup for DirectPay. The Pay1040 payment was under $100.

Update: 10 days after the PayUSATax payment, IRS was able to verify that they had received my second extension payment, with the date and amount. Same experience as with the Pay1040 payment.
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Last edited by TyrannicalDuncery; Mar 27, 2024 at 3:26 pm Reason: first one went through
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Old Mar 21, 2024, 2:17 pm
  #872  
 
Join Date: Mar 2008
Posts: 1,570
Originally Posted by TyrannicalDuncery
This may be well-known, but I just wanted to note my experience with confirmation numbers when making extension payments:
  • Paid with Pay1040: Got an immediate initial confirmation email with an internal confirmation number, then a day or two later I got an email telling me that the payment was accepted by the IRS and giving a 15-digit confirmation number that the IRS gave them; I think this is also called the "EFT number" and has the same format as the confirmation numbers from DirectPay.
  • Paid with PayUSATax: Got an initial confirmation email with an internal confirmation number, then 4 days later I emailed them back. After that, they emailed me right away saying that the payment was accepted by the IRS and giving a 15-digit confirmation number that the IRS gave them.
I think that "IRS accepted it" is not the same thing as "IRS can find it"; a few days after that second email from Pay1040, I called the IRS to see whether they could find that payment yet. Not yet. They said 2-3 weeks. (I prefer to call instead of setting up an IRS.gov account.)
Yes, Pay1040 emailed me with confirmation and also followup email stating IRS had accepted it.
payUSATax only sent me the initial email and no followups. I will followup tomorrow.

But I have irs.gov login, so I can see all 3 payments "pending" there.
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Old Mar 22, 2024, 9:35 am
  #873  
 
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I wonder what's the most anyone has overpaid by relative to their actual tax. There are numerous good SUBs now. I owe close to $0 tax (after withhold). I could overpay $40k by maxing out 2 payments per processor; it would be more than my fed tax (again, already withheld). Would the IRS bat an eye?
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Old Mar 22, 2024, 9:41 am
  #874  
 
Join Date: Aug 2021
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Originally Posted by italdesign
I wonder what's the most anyone has overpaid by relative to their actual tax. There are numerous good SUBs now. I owe close to $0 tax (after withhold). I could overpay $40k by maxing out 2 payments per processor; it would be more than my fed tax (again, already withheld). Would the IRS bat an eye?
I did much more than that last year with no eyes batted.

I did it again this year. Still waiting on my refund but I expect smooth sailing.
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Old Mar 22, 2024, 7:41 pm
  #875  
 
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Originally Posted by italdesign
... the most anyone has overpaid by relative to their actual tax. ... Would the IRS bat an eye?
Not sure what you consider "batting an eye" but this post describes my experience with overpaying by 50-200%.
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Old Mar 23, 2024, 6:20 am
  #876  
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Originally Posted by italdesign
I wonder what's the most anyone has overpaid by relative to their actual tax. There are numerous good SUBs now. I owe close to $0 tax (after withhold). I could overpay $40k by maxing out 2 payments per processor; it would be more than my fed tax (again, already withheld). Would the IRS bat an eye?
I routinely overpay about 200% via estimated taxes. If the IRS would question it, Iíd blame my bad math and my desire to find an extra safe harbor. (however, my 200% are a lot less than $40k since I donít churn a ton and donít make a lot of money from non-minimum-spend charges that result in a long interest-free loan to the government in the current high interest environment)
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Old Mar 23, 2024, 1:50 pm
  #877  
 
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Originally Posted by Dr Jabadski
Not sure what you consider "batting an eye" but this post describes my experience with overpaying by 50-200%.
For the past two years, I overpayed by about 300%. Just filed this year but no issues from last year.
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Old Mar 23, 2024, 1:57 pm
  #878  
 
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Originally Posted by avogadro
I did much more than that last year with no eyes batted.

I did it again this year. Still waiting on my refund but I expect smooth sailing.
One wrench that can be thrown into the system is if the IRS decides your large refund is "potential identity theft" resulting in a 5071C letter and the need to prove your identity. And after proving your identity the refund can take up to an additional 9 weeks to process.
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Last edited by cjw2001; Mar 23, 2024 at 2:04 pm
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Old Mar 26, 2024, 11:05 am
  #879  
 
Join Date: Sep 2003
Posts: 270
Originally Posted by italdesign
I wonder what's the most anyone has overpaid by relative to their actual tax. There are numerous good SUBs now. I owe close to $0 tax (after withhold). I could overpay $40k by maxing out 2 payments per processor; it would be more than my fed tax (again, already withheld). Would the IRS bat an eye?
I paid recently using pay1040 to file an extension. It requested the expected total tax liability and what amount I wanted to pay. Not sure if the IRS will use the first number in anyway later.
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Old Mar 26, 2024, 11:09 am
  #880  
 
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Originally Posted by libralibra
I paid recently using pay1040 to file an extension. It requested the expected total tax liability and what amount I wanted to pay. Not sure if the IRS will use the first number in anyway later.
This is just the information you need for the 4686
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Old Mar 26, 2024, 9:08 pm
  #881  
 
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Originally Posted by Dr Jabadski
Not sure what you consider "batting an eye" but this post describes my experience with overpaying by 50-200%.
Originally Posted by cjw2001
… if the IRS decides your large refund is "potential identity theft" resulting in a 5071C letter and the need to prove your identity. And after proving your identity the refund can take up to an additional 9 weeks to process.
After reading cjw2001’s post above I reviewed my documentation from a year ago and saw that the “form” I received was a “LTR 5071C” which required my going to a specific webpage to respond to a few questions and best I can determine delayed my refund by ~7 weeks.

For that year’s taxes, both NYS and IRS returns were filed electronically by an accountant on March 10. LTR 5071C snail mail (USPS) hard copy dated March 30 was received April 6, NYS refund direct deposit received March 23, IRS refund direct deposit received May 14. (I was quite pleased with the quickness of the NYS refund, 2 weeks.)
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Old Mar 27, 2024, 6:41 am
  #882  
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Originally Posted by Dr Jabadski
....ďLTR 5071CĒ
More information here: https://www.irs.gov/individuals/unde...r-5071c-notice
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Old Mar 27, 2024, 3:23 pm
  #883  
 
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Originally Posted by Dr Jabadski
After reading cjw2001’s post above I reviewed my documentation from a year ago and saw that the “form” I received was a “LTR 5071C” which required my going to a specific webpage to respond to a few questions and best I can determine delayed my refund by ~7 weeks.
So I likely have another 5 to 6 weeks to wait....
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Old Mar 27, 2024, 4:50 pm
  #884  
 
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Originally Posted by Schnit
This is just the information you need for the 4686
That's my point. Form 4868 line 4 has a warning "Make your estimate as accurate as you can with the information you have. If we later find that the estimate wasn’t reasonable, the extension will be null and void." Not sure if entering a fake estimate on pay1040 is the same thing. Paying by ES doesn't have this problem since it doesn't ask you any questions like this.
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Old Mar 27, 2024, 6:03 pm
  #885  
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Originally Posted by libralibra
"Make your estimate as accurate as you can with the information you have. If we later find that the estimate wasnít reasonable, the extension will be null and void."
From the reports here, methinks that referrers to to taxpayers underpaying their estimated tax burden
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