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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 Apr 3, 2024, 9:55 am
  #901  
 
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Gary over at View from the Wing posted that he was only charged a flat $2.50 fee when paying $24,000 on his 1040-ES with a credit card at Pay1040. Is this a fluke/error? Anyone else seeing it?
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Old Apr 3, 2024, 10:22 am
  #902  
 
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Originally Posted by Infinite1K
Gary over at View from the Wing posted that he was only charged a flat $2.50 fee when paying $24,000 on his 1040-ES with a credit card at Pay1040. Is this a fluke/error? Anyone else seeing it?
The comments section of that blog post indicate several people were NOT able to duplicate the experience, some mentioned it could be a one-off fluke. I just tried it with a dummy payment, no joy.

Wouldn't be at all surprising to see Gary post a correction that it was actually a debit card (with usual $2.50 fee) or that it actually was a debit card and Gary just posted (with a sensationalistic headline) for the clicks.

As far as that post on VFTW:
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Old Apr 3, 2024, 10:30 am
  #903  
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Originally Posted by Infinite1K
Gary over at View from the Wing posted that he was only charged a flat $2.50 fee when paying $24,000 on his 1040-ES with a credit card at Pay1040. Is this a fluke/error? Anyone else seeing it?
Has to be a one-off miscoding of a credit card as a debit card.
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Old Apr 3, 2024, 10:45 am
  #904  
 
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Clearly some bloggers like to gloat and brag about their accomplishments. And certainly there’s a narrow line between posting breaking news and missing the story.

But posting this type of one-off experience is particularly irresponsible, not from a “tell everyone and it will get shutdown” point of view, from the “sensationalism, FoMO*” point of view.

(* “Fear of missing out (FoMO) is a unique term introduced in 2004 to describe a phenomenon observed on social networking sites. FoMO includes two processes; firstly, perception of missing out, followed up with a compulsive behavior to maintain these social connections.” “Studies also suggest that FOMO is a negative emotional state resulting from unmet social relatedness needs.”)
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Old Apr 3, 2024, 12:20 pm
  #905  
 
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Originally Posted by Dr Jabadski
Clearly some bloggers like to gloat and brag about their accomplishments. And certainly there’s a narrow line between posting breaking news and missing the story.

But posting this type of one-off experience is particularly irresponsible, not from a “tell everyone and it will get shutdown” point of view, from the “sensationalism, FoMO*” point of view.

(* “Fear of missing out (FoMO) is a unique term introduced in 2004 to describe a phenomenon observed on social networking sites. FoMO includes two processes; firstly, perception of missing out, followed up with a compulsive behavior to maintain these social connections.” “Studies also suggest that FOMO is a negative emotional state resulting from unmet social relatedness needs.”)
Agreed. I would think that he would know the difference between a Debit and Credit Card. It would be disappointing if he was going for the sensationalism/clicks.
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Old Apr 3, 2024, 12:24 pm
  #906  
 
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I never considered putting on a debit card, but the Amex checking account gives 0.5 MR per dollar on a debit card. If its $2.50 fixed for a debit card, you can get a ton of MR for minimal cost, you just need to have the cash on hand
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Old Apr 3, 2024, 12:28 pm
  #907  
 
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Originally Posted by Schnit
I never considered putting on a debit card, but the Amex checking account gives 0.5 MR per dollar on a debit card. If its $2.50 fixed for a debit card, you can get a ton of MR for minimal cost, you just need to have the cash on hand
The Amex Rewards Checking account gets treated like a credit card, yet you only get 0.5 MR/$. Totally not worth it.
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Old Apr 3, 2024, 1:09 pm
  #908  
 
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Originally Posted by Infinite1K
The Amex Rewards Checking account gets treated like a credit card, yet you only get 0.5 MR/$. Totally not worth it.
oh that sucks
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Old Apr 3, 2024, 6:17 pm
  #909  
 
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Originally Posted by Schnit
… you can get a ton of MR for minimal cost, …
Originally Posted by Schnit
oh that sucks
These 2 assessments seem mutually contradictory.

Originally Posted by Infinite1K
.. only get 0.5 MR/$. Totally not worth it.
Using the aforementioned amounts, $2.50 for 12,000 miles for a $24,000 payment (4,800 miles/$), it’s arguably well worth it, a terrific bargain. Arguably better than ~$450 (1.87%) for 24,000 (~53 miles/$) or 36,000 or even 48,000 miles (~107 miles/$).

Granted 0.5 MR/$ compared to 1-2 points or miles/$ at the same cost generally sucks, in this situation it’s an excellent deal. It’s likely that if the card could reliably be used for tax payments and AmEx allowed more than $5k per day, the account would be much more popular with points and miles mongers.
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Old Apr 3, 2024, 8:43 pm
  #910  
 
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Originally Posted by Dr Jabadski
These 2 assessments seem mutually contradictory.

Using the aforementioned amounts, $2.50 for 12,000 miles for a $24,000 payment (4,800 miles/$), it’s arguably well worth it, a terrific bargain. Arguably better than ~$450 (1.87%) for 24,000 (~53 miles/$) or 36,000 or even 48,000 miles (~107 miles/$).

Granted 0.5 MR/$ compared to 1-2 points or miles/$ at the same cost generally sucks, in this situation it’s an excellent deal. It’s likely that if the card could reliably be used for tax payments and AmEx allowed more than $5k per day, the account would be much more popular with points and miles mongers.
Sorry I wasn’t clear. If you use the Amex Checking Debit card, you get charged the same rate as a credit card, however you only get .5 MR per $. So no sense in doing that.

You could just as easily use a regular Amex credit card and get 1 MR per $ spent (or more if you use say the Amex Everday which is 1.5x if you have 30+ transactions per billing period).

Both would be paying the 1.82% or higher fees.
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Old Apr 4, 2024, 6:05 am
  #911  
 
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Remember the Suntrust Delta Skymiles debit card before they instituted a monthly cap? Those were the days....
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Old Apr 4, 2024, 9:25 am
  #912  
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Originally Posted by flyaxa
Remember the Suntrust Delta Skymiles debit card before they instituted a monthly cap? Those were the days....
I'm probably still working down some of that stash.
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Old Apr 4, 2024, 9:42 am
  #913  
 
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Originally Posted by josephstern
I'm probably still working down some of that stash.
Implies you’re not an “earn and burn” type.

I’m still working down NW miles merged to DL, US Air miles merged to AA, CO miles merged to UA and AA BankDirect miles. Haven’t calculated the exact numbers but I’ve probably exhausted my Piedmont miles which merged to US Air which merged to AA. (I'm most likely an extreme example of "earn and judiciously burn", well outside 2 standard deviations .)

A mile saved is a mile earned .
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Last edited by Dr Jabadski; Apr 4, 2024 at 9:49 am Reason: usual verbosity
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Old Apr 4, 2024, 10:07 am
  #914  
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Originally Posted by Dr Jabadski
Implies you’re not an “earn and burn” type.

I’m still working down NW miles merged to DL, US Air miles merged to AA, CO miles merged to UA and AA BankDirect miles. Haven’t calculated the exact numbers but I’ve probably exhausted my Piedmont miles which merged to US Air which merged to AA. (I'm most likely an extreme example of "earn and judiciously burn", well outside 2 standard deviations .)

A mile saved is a mile earned .
Bad deal for all of us due to the devaluations and lack of interest, but when the miles are cheap enough (basically free with the SunTrust Debit card) then it's worthwhile. I'll never forget a trip to Hawaii that I took with my family and we came home with more miles than the trip cost thanks to a friendly Walmart there.
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Old Apr 5, 2024, 9:49 am
  #915  
 
Join Date: Mar 2008
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Wow, color me amazed/surprised given all the horror stories I see on reddit about how long it's taking the IRS to process.
Anyway:
sent payments on 3/19/24 Waited until the IRS website showed received and no longer in "pending" state.
eFiled on 3/24/24

IRS website updated Tuesday to show my transcripts/etc.
the WMR site showed received, but nothing else.
Today shows Refund Approved and will sent on 4/8/24
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