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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)
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Cash Back cards:
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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 27, 2024, 6:32 pm
  #886  
 
Join Date: May 2022
Posts: 2,523
Originally Posted by EmailKid
From the reports here, methinks that referrers to to taxpayers underpaying their estimated tax burden
The IRS never complained about an interest fee loan.

In my professional experience, this happens from a grid underestimate if taxes. The IRS and every state have their own threshold for this. It could be that if you didn't pay 50% of your taxes they'll consider everything to be late.

Keep in mind an extension is an extension of time to file not an extension of time to pay
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Old Mar 27, 2024, 6:42 pm
  #887  
 
Join Date: Sep 2003
Posts: 270
Originally Posted by EmailKid
From the reports here, methinks that referrers to to taxpayers underpaying their estimated tax burden
If you underestimate and underpay on the 4868, then you will be setting yourself up for a penalty/interest if you then file and pay after the Apr deadline. ie if you lowball the number here, you're not cleverly gaming the system or anything, since your total taxes are still due in Apr regardless.
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Old Mar 28, 2024, 11:18 pm
  #888  
 
Join Date: Feb 2011
Location: NYC suburbs
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Originally Posted by Schnit
… a grid underestimate if taxes …
? Perhaps a typo, should it be “a gross underestimate of taxes”?
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Old Mar 29, 2024, 10:06 am
  #889  
 
Join Date: May 2022
Posts: 2,523
Originally Posted by Dr Jabadski
? Perhaps a typo, should it be “a gross underestimate of taxes”?
Yup
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Old Mar 30, 2024, 11:54 am
  #890  
 
Join Date: Oct 2004
Location: Indianapolis area
Programs: Marriott Lifetime Titanium
Posts: 450
Originally Posted by cjw2001
So I likely have another 5 to 6 weeks to wait....
Good news, got refund approved status today when checking the IRS site, 2 weeks to the day after completing the 5071C validation process.
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Old Mar 31, 2024, 8:19 am
  #891  
 
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Originally Posted by cjw2001
Good news, got refund approved status today when checking the IRS site, 2 weeks to the day after completing the 5071C validation process.
And today while still approved the anticipated refund payment date has slipped from April 3 to May 3 for no apparent reason. Guess they are not done holding onto my money quite yet.
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Old Mar 31, 2024, 10:36 am
  #892  
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Originally Posted by cjw2001
And today while still approved the anticipated refund payment date has slipped from April 3 to May 3 for no apparent reason. Guess they are not done holding onto my money quite yet.
Interesting. I'm not approved yet, but they just snagged a month of interest from you there - almost half a percent these days. But at least you're approved . . .
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Old Mar 31, 2024, 11:06 am
  #893  
 
Join Date: Oct 2004
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Originally Posted by josephstern
Interesting. I'm not approved yet, but they just snagged a month of interest from you there - almost half a percent these days. But at least you're approved . . .
By my calculation they will need to pay interest starting April 15 (assuming the 45 day clock started on my original filing date and not the identity validation completed date).
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Old Mar 31, 2024, 11:46 am
  #894  
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Originally Posted by cjw2001
By my calculation they will need to pay interest starting April 15 (assuming the 45 day clock started on my original filing date and not the identity validation completed date).
Then that's great - the current rate the IRS pays is 8% I believe.

I didn't realize it kicks in so soon.
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Old Mar 31, 2024, 12:38 pm
  #895  
 
Join Date: Sep 2003
Posts: 270
Originally Posted by josephstern
Then that's great - the current rate the IRS pays is 8% I believe.

I didn't realize it kicks in so soon.
I think the clock starts on 4/15 (or whenever they receive your filing if that's even later). If they miss the deadline, the 45 days are included in the interest payment though.
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Old Mar 31, 2024, 12:54 pm
  #896  
 
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Originally Posted by libralibra
I think the clock starts on 4/15 (or whenever they receive your filing if that's even later). If they miss the deadline, the 45 days are included in the interest payment though.
​​​​​​The rules are in the document I linked to earlier.
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Old Mar 31, 2024, 1:11 pm
  #897  
 
Join Date: Sep 2003
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Originally Posted by cjw2001
yes, and you read the first 2 bullets, right?
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Old Mar 31, 2024, 1:45 pm
  #898  
 
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Originally Posted by libralibra
yes, and you read the first 2 bullets, right?
Yes, I incorrectly assumed that the 45 day clock only applied from the day filed and not to the due date. But according to this link you add 45 days to the latest of the dates. So the earliest in my case for interest would be May 30. Oh well, just will be happy to get my money eventually.
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Last edited by cjw2001; Mar 31, 2024 at 1:50 pm
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Old Apr 1, 2024, 8:12 am
  #899  
 
Join Date: Oct 2004
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Originally Posted by cjw2001
And today while still approved the anticipated refund payment date has slipped from April 3 to May 3 for no apparent reason. Guess they are not done holding onto my money quite yet.
The date is back to April 3 today. Will believe it when I see the deposit.
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Old Apr 1, 2024, 1:20 pm
  #900  
 
Join Date: Sep 2003
Posts: 270
Originally Posted by cjw2001
The date is back to April 3 today. Will believe it when I see the deposit.
I guess there's an upside either way: get it earlier and save on the lost interest, or get it late and test out their rules (ie yes or no on interest if refunded >45 days from filing but <45 days from due date)

btw, I did stumble upon an actual guaranteed interest scenario last year. My state postponed the due date to Oct due to natural disasters, so I immediately got lazy and didn't file in Apr even tho I had a 10k+ refund coming. By July I figured I was losing $10 in interest every week so filed. The refund came back quickly including about 3 months of interest, negating the idea that the 45day clock started when I filed or the Oct due date!

Turns out that for cases of postponement, the IRS must pay interest no matter what starting on Apr 15, so I shoulda waited till the last minute to file. In fact, someone who really wanted to game it could try to send in a big overpayment right when the postponement was announced.

The info I found was mentioned in a notice about the Covid year taxes https://www.irs.gov/newsroom/13-poin...ing%20deadline

This provision is different from the long-standing 45-day rule, generally requiring the IRS to add interest to refunds on timely-filed refund claims issued more than 45 days after the return due date.

Instead, this year's COVID-19-related July 15 due date is considered a disaster-related postponement of the filing deadline. Where a disaster-related postponement exists, the IRS is required, by law, to pay interest, calculated from the original April 15 filing deadline
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