Go Back  FlyerTalk Forums > Miles&Points > Credit, Debit and Prepaid Card Programs > Credit Card Programs
Reload this Page >

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


Print Wikipost

Paying USA income, property or other taxes with a credit card

Old Feb 20, 2013, 8:35 pm
  #91  
 
Join Date: Apr 2005
Location: NYC
Posts: 1,756
Originally Posted by DCBob
1. GetawaysRus: No, there is no monthly limit on paying taxes with a SunTrust debit card, and you do get SkyMiles for the taxes paid. There is a $35K per transaction limit, but I had a SunTrust official temporarily increase the limit to $41K for one of my payments (but I had to escalate my request to a manager).

2. yoyo: You are using the WRONG third-party payer. You need to use payusatax.com, NOT officialpayments.com, to get a flat fee of $3.49.
Thanks DCBob.

I just checked I paid NY state tax last year via official payments and paid 3.XX flat fee with ST debit card. But it looks like for CT state tax the fee is always 2.35% regardless if you use a debit card or credit card. Unfortunately CT only takes payments from officialpayments.com so I am stuck. Federal tax is no problem since I can pay with payusatax.com. I will just need to write CT a check. No big deal since it is only 5K so I will just need to make two more trips to WM to make up the lost miles :-)
yoyo is offline  
Old Feb 25, 2013, 3:41 pm
  #92  
 
Join Date: Feb 2013
Location: Atlanta (most of the time)
Posts: 293
I was planning on buying some PayPal reload cards and then just sending the money to my bank account after a few days. Then pay my taxes directly from my bank account.

Am I missing out on more points earning potential?
Pointsloop is offline  
Old Feb 25, 2013, 5:13 pm
  #93  
FlyerTalk Evangelist
 
Join Date: Dec 2002
Location: Danville, CA, USA;
Programs: UA 1MM, AS MVP, WN CP, Marriott LT Plat, Hilton Gold, IC Plat
Posts: 15,994
So this goes back to the "which card to use for everyday spend" theme but assuming:

(1) You want or need to use a credit card to pay (don't have cash sitting around)
(2) You don't want to play the bluebird, giftcard, whatever game
(3) You don't want to set up a Suntrust checking account (which would not allow you to finance the taxes)
(4) You don't need to hit a threshhold spending bonus for a new credit card
(5) You want to maximize the value of miles/points received from tax payments

What is the best credit card in terms of ROI?

Chase Southwest visa returns 1.67%. SPG Amex returns 1 point/$1 which can usually be leveraged to 2%+ return - any other thoughts?
Boraxo is offline  
Old Feb 25, 2013, 5:54 pm
  #94  
FlyerTalk Evangelist
 
Join Date: Jul 2006
Location: Upper Sternistan
Posts: 10,169
Certainly a 2% cash back card makes sense if the fee is 1.89%, but dig in the terms to be sure that taxes aren't a proscribed item.
josephstern is offline  
Old Feb 26, 2013, 3:22 pm
  #95  
mia
Flyertalk Posting Legend Moderator: Credit Card Programs, American Express, Capital One, Chase, Citi, Diners Club, Signatures.
Original Poster
 
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: HH & IHG Gold; Marriott & AA Perpetual Platinum
Posts: 49,210
Moderator option

Originally Posted by Pointsloop
...buying some PayPal reload cards and then just sending the money to my bank account after a few days.
Discussion of this technique has been moved here...

http://www.flyertalk.com/forum/manuf...er-thread.html

...because it is not directly related to paying taxes.
mia is offline  
Old Feb 27, 2013, 8:34 pm
  #96  
 
Join Date: Dec 2008
Posts: 367
Originally Posted by redtop43
Each GC costs about $5 to buy and $4 to unload, so that's $9, for 2500 UR points worth at least $31.25.
That's with a $500 GC. With a $200 GC you're paying about $10 for 1000 UR points (as opposed to $18.90 direct w. payusa). You'll need 37 1/2 GCs to pay 7.5K tax.
st.exupery is offline  
Old Mar 4, 2013, 10:42 pm
  #97  
 
Join Date: Apr 2012
Location: Bay Area, CA
Programs: AAdvantage, HHonors Diamond, WN RR A-list+
Posts: 584
Can I split federal tax payments up ?

Say I owe $12k for 2012.. could I pay $8k on one card and $4k on the other ?
poser is offline  
Old Mar 4, 2013, 11:24 pm
  #98  
FlyerTalk Evangelist
 
Join Date: Dec 2002
Location: Danville, CA, USA;
Programs: UA 1MM, AS MVP, WN CP, Marriott LT Plat, Hilton Gold, IC Plat
Posts: 15,994
Originally Posted by poser
Can I split federal tax payments up ?

Say I owe $12k for 2012.. could I pay $8k on one card and $4k on the other ?
Yes, you can split up as many times as you like. IRS records each payment as it is received. Each time you fill out the payment form you simply enter the desired $$ amount and the tax year. It isn't like online banking where the system can autofill the amount due - the payment provider has no way of knowing how much you owe.
Boraxo is offline  
Old Mar 5, 2013, 8:51 am
  #99  
 
Join Date: Apr 2012
Location: Bay Area, CA
Programs: AAdvantage, HHonors Diamond, WN RR A-list+
Posts: 584
Originally Posted by Boraxo
Yes, you can split up as many times as you like. IRS records each payment as it is received. Each time you fill out the payment form you simply enter the desired $$ amount and the tax year. It isn't like online banking where the system can autofill the amount due - the payment provider has no way of knowing how much you owe.
Thanks!
poser is offline  
Old Mar 6, 2013, 4:46 am
  #100  
 
Join Date: May 2008
Location: PHL (kinda, no airport is really close)
Programs: AA Exp, but not sure for how long. Enterprise Platinum woo-hoo!
Posts: 4,552
Amex GC's as Debit?

I thought I had seen information on a tax payments provider that accepted Amex Gift Cards as debit. I'd greatly appreciate it if someone could point me to that.
redtop43 is offline  
Old Mar 6, 2013, 12:42 pm
  #101  
FlyerTalk Evangelist
 
Join Date: Jul 2006
Location: Upper Sternistan
Posts: 10,169
Originally Posted by redtop43
I thought I had seen information on a tax payments provider that accepted Amex Gift Cards as debit. I'd greatly appreciate it if someone could point me to that.
As fabulous as that would be, I'm pretty sure it's not the case.
josephstern is offline  
Old Mar 6, 2013, 9:30 pm
  #102  
 
Join Date: Jan 2013
Posts: 25
Originally Posted by redtop43
I thought I had seen information on a tax payments provider that accepted Amex Gift Cards as debit. I'd greatly appreciate it if someone could point me to that.
Nope, from what I know. That's why people have been buying large Visa gift cards with the AMEX cards. The income tax websites code Visa gift cards as debit, but not amex.
Mike5889 is offline  
Old Mar 7, 2013, 6:58 pm
  #103  
 
Join Date: Oct 2010
Posts: 184
I didn't even know the IRS took credit. What are the fees like for that?
msit is offline  
Old Mar 8, 2013, 8:17 am
  #104  
mia
Flyertalk Posting Legend Moderator: Credit Card Programs, American Express, Capital One, Chase, Citi, Diners Club, Signatures.
Original Poster
 
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: HH & IHG Gold; Marriott & AA Perpetual Platinum
Posts: 49,210
Originally Posted by msit
What are the fees like for that?
The IRS website displays this information:

http://www.irs.gov/uac/Pay-Taxes-by-...-or-Debit-Card
mia is offline  
Old Mar 10, 2013, 11:51 am
  #105  
FlyerTalk Evangelist
 
Join Date: Dec 2003
Location: Benicia, California, USA
Programs: AA PLT,AS,UA PP,J6,FB,EY,LH,SQ,HH Dmd,Hyatt Glbl,Marriott Plat,IHG Plat,Accor Gold
Posts: 10,845
Originally Posted by skynerd
The Internal Revenue Service web page for credit card payments was apparently revamped on January 8th, and includes some fee improvements. Here are the changes that I see, most substantial first:

1. payusatax now accepts American Express at its regular 1.89% fee, a substantial 0.4% reduction from the previous cheapest AmEx rate of 2.29% that was previously offered by payusatax's sister business valuetaxpayment. To confirm this, I just made an AmEx payment on payusatax for 1.89%. ValueTaxPayment is no longer listed on the IRS page.
First of all, skynerd, a belated thanks for posting this info.

I plan to pay at least part of my tax bills with my new Amex Plat and Amex Business Gold cards in order to quickly accrue the initial spend bonuses. Is there are reason NOT to use payusatax at its 1.89% rate as opposed to the 2.35% services like Pay1040? For that matter, why ever use these competitors at all, given payusatax's lower cost?

Thanks for any help.
Thunderroad is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.