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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 10, 2013, 2:32 pm
  #106  
 
Join Date: Dec 2002
Location: San Jose, CA
Programs: Hilton Gold; UA 3P; Cattle-Class on everything else.
Posts: 342
Guys - My property tax payment is coming due (~6k). The county (Santa Clara, CA) website will only allow payments in full (plus some ~2.5% service charge). So basically, I can't split up my payments across multiple cards.

For what it's worth, the county doesn't accept debit-cards (only credit-cards & e-check)...

I'm looking for any ideas which'll help me split the payment across multiple cards with minimum spend requirements.

TIA
-G
gya007 is offline  
Old Mar 10, 2013, 6:11 pm
  #107  
 
Join Date: Apr 2002
Location: Chicago - AA EXP, UA 1K, Marriott PL, Starwood PL, Hyatt Gold
Posts: 415
Estimated taxes - multiple payments/quarter

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.
Each of the credit/debit card payment sites has a limit of 2 estimated payments per quarter. If I want to make 4 payments in a quarter - say to max out debit card allowable daily payments - can I pay 2 on one site and 2 on another all in a quarter (say 2 payments on payusatax and 2 on official payments)? Has anyone ever done this?

Thanks
I012609 is offline  
Old Mar 10, 2013, 9:18 pm
  #108  
 
Join Date: Mar 2013
Posts: 1
first post. sorry if this should be in the other thread. all of this has been very helpful. i'm seeing some negative feedback from sites like topcashback on here. they offer 5.5% off staples giftcards-i was told by their CSR that visa gc's indeed get 5.5% off. i'd also like to continue to get 5x URs even though OD pulled variable gc's. can i just buy the $100 visa card (+6 fee) from staples via TCB, get 5.5% off, go through VR and BB to pay taxes in a check? has anyone done this? foreseeable problems other than if TCB doesn't honor what they said? (i have it in an email though FWIW). if not, i could use upromise or something similar? thanks in advance for the help.
dashley is offline  
Old Mar 10, 2013, 9:36 pm
  #109  
 
Join Date: Mar 2007
Location: S Cal
Programs: AA Lifetime Plat, United Silver, Marriott Plat, IHG Plat
Posts: 1,142
Originally Posted by gya007
Guys - My property tax payment is coming due (~6k). The county (Santa Clara, CA) website will only allow payments in full (plus some ~2.5% service charge). So basically, I can't split up my payments across multiple cards.

I'm looking for any ideas which'll help me split the payment across multiple cards with minimum spend requirements.

TIA
-G
I'm able to pay up to 5K per month using Bluebird. That's a frightening property tax bill, but one approach would be to load up a Bluebird account by purchasing reload cards with your credit cards and then issue a 5K check payable to The County of Santa Clara tax collector. Have Bluebird mail the check to you at your address. Then enclose that check in an envelope with an additional personal check for the balance of your payment and mail the full payment to the county tax collector. AT $3.95 per $500 reload, your cost would be $39.50 for 10 reloads.
GetawaysRus is offline  
Old Mar 11, 2013, 3:43 pm
  #110  
 
Join Date: Feb 2012
Posts: 731
My property tax bill is a little over 3K with a 2.3% credit card charge fee. I may just have Bluebird send me a check, but I'm still debating whether I should just pay with a personal check and avoid paying any fees.
yOyOYoo is offline  
Old Mar 13, 2013, 1:47 pm
  #111  
 
Join Date: Nov 2009
Posts: 523
Originally Posted by dashley
first post. sorry if this should be in the other thread. all of this has been very helpful. i'm seeing some negative feedback from sites like topcashback on here. they offer 5.5% off staples giftcards-i was told by their CSR that visa gc's indeed get 5.5% off. i'd also like to continue to get 5x URs even though OD pulled variable gc's. can i just buy the $100 visa card (+6 fee) from staples via TCB, get 5.5% off, go through VR and BB to pay taxes in a check? has anyone done this? foreseeable problems other than if TCB doesn't honor what they said? (i have it in an email though FWIW). if not, i could use upromise or something similar? thanks in advance for the help.
Can you please explain how do you use Visa through VR and BB?
mak101 is offline  
Old Mar 13, 2013, 2:15 pm
  #112  
 
Join Date: Nov 2009
Posts: 523
I am planning to apply for AA miles card. I don't know what is their current offer but I am looking minimum 50K offer. I run small business and pay about 4K in taxes every month. This is my plan to use new card: Buy VR with new AA card (I believe its Citi card) load it to BB and use paytaxusa.com to pay tax with BB. Is this possible or am I missing anything?

Is there any other way to pay taxes to maximize benefits? I am more interested in collecting AA miles then Delta. Please help.
mak101 is offline  
Old Mar 15, 2013, 2:42 am
  #113  
 
Join Date: Nov 2011
Location: California
Programs: Hyatt Global, Marriot Lifetime Titanium
Posts: 2,284
Originally Posted by DCBob
The 2% floor only applies to the fee allocable to the personal portion of your tax. If you have a rental property, business, or farm, you can deduct the part of the fee that applies to Schedule C, E, or F on the applicable schedule based on the percentage of the tax allocable to that schedule.
Thanks for the info. Does the IRS document that anywhere?
JackE is offline  
Old Mar 15, 2013, 9:41 pm
  #114  
 
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
JackE - I believe that any expenses that are "Reasonable and necessary" to a business are deductible as business expenses. For example, my accountant charges a certain amount per form, and the amount he charges to complete Schedule C is an expense the year I pay it on Schedule C, the same with the amount he charges to complete Schedule E. It is possible that a credit card fee is not considered "reasonable and necessary." You might check out the usenet group misc.taxes.moderated. Some very astute tax practitioners over there.

mak101, I'm not sure, but you can probably use BB to pay taxes by check rather than having to use your BB card. Just use the bill payment function and give your SSN or EIN as the account number.
redtop43 is offline  
Old Mar 15, 2013, 9:45 pm
  #115  
 
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
Question on number of payments

I just paid part of my first quarter taxes using payusatax. They would only process two GC's, and said that is my limit for the quarter. I used Amex GC's with values of $3K and $2K. I think there is another low-cost payment processor and I could do the same thing each quarter with them, and my taxes are less than $10K/quarter.

But I am thinking of trying to do it with Visa GC's, and right now I don't know of any bigger than $200. I kind of recall at one time, using OfficialPayments and finding that they had an online limit of 2 payments per quarter but you could do more over the phone. Anyway, does anyone know of a payment processor that will take multiple Visa GC's in a quarter? I could theoretically do about 30-40 of them, although I don't know that I will in practice.
redtop43 is offline  
Old Mar 15, 2013, 11:05 pm
  #116  
 
Join Date: Nov 2012
Posts: 657
I did not read most of this thread... BUT I planned to pay my 1.5-3K fed tax bill with my paypal balance and business debit card through one of the websites with a minimum fee. Am I wrong?
drdrew450 is offline  
Old Mar 16, 2013, 10:11 am
  #117  
ned
 
Join Date: Nov 2002
Programs: MTD pass holder
Posts: 1,142
Other than Official Payments do any payment sites provide for the payment of California State Income Tax? Thanks
ned is offline  
Old Mar 18, 2013, 11:45 am
  #118  
 
Join Date: Sep 2008
Location: NYC
Programs: AA PLT 2MM
Posts: 395
New York State tax payments

Just got a flyer in the mail from payNYtax.com advertising New York State tax payments for 2.25% using a Mastercard credit card or $3.95 using a Mastercard debit card. I haven't actually used this yet, and the website only mentions the VISA debit card, not MC, but this is something worth looking into for paying NYS personal income taxes, quarterly estimated taxes, as well as "Assessment for any tax type and tax year."

Update: Unfortunately, only accepts VISA debit with the flat fee, not MC. Spoke to a CSR supervisor who gave various reasons why the mailing was incorrect, none of them useful.

Last edited by j3brooklyn; Mar 18, 2013 at 4:12 pm Reason: additional info
j3brooklyn is offline  
Old Mar 20, 2013, 4:29 pm
  #119  
 
Join Date: Apr 2011
Posts: 567
Were the 2 GCs treated as debit cards for fees?

Is the limit 2 per quarter total or 2 per quarter per tax type? I have to pay estimated taxes and business taxes quarterly.
bobby21 is offline  
Old Mar 21, 2013, 11:54 am
  #120  
 
Join Date: Aug 2012
Location: New York, NY
Programs: AA Plat, UA, BA, DL, SPG Gold
Posts: 94
Originally Posted by redtop43
I just paid part of my first quarter taxes using payusatax. They would only process two GC's, and said that is my limit for the quarter. I used Amex GC's with values of $3K and $2K. I think there is another low-cost payment processor and I could do the same thing each quarter with them, and my taxes are less than $10K/quarter.

But I am thinking of trying to do it with Visa GC's, and right now I don't know of any bigger than $200. I kind of recall at one time, using OfficialPayments and finding that they had an online limit of 2 payments per quarter but you could do more over the phone. Anyway, does anyone know of a payment processor that will take multiple Visa GC's in a quarter? I could theoretically do about 30-40 of them, although I don't know that I will in practice.
Did the Amex GCs process as credit or debit? I'm guessing as credit since you're looking at Visa GCs now...

You can purchase Visa GCs in denominations up to $1000 on GiftCardMall. FrequentMiler reported on his Dec 5th post that Official Payments would take multiple GCs over the phone.

Let us know what your experience with this is!
Spacetime17 is offline  

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