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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 25, 2013, 10:22 am
  #121  
 
Join Date: Nov 2009
Posts: 525
Which is the most rewarding debit card in current market? I am paying 4K in payroll taxes and I would like to take the advantage by paying debit card
mak101 is offline  
Old Mar 26, 2013, 5:03 am
  #122  
 
Join Date: Sep 2001
Location: Washington, DC
Programs: UA Plat MM, AA Gold, Hyatt Explorist, Hilton Gold, IHG Plat, Marriott Titanium Elite
Posts: 5,015
Originally Posted by mak101
Which is the most rewarding debit card in current market? I am paying 4K in payroll taxes and I would like to take the advantage by paying debit card
The SunTrust Delta SkyMiles Debit MasterCard. No other debit card gives you at least 1 mile per dollar.
DCBob is offline  
Old Mar 26, 2013, 10:15 am
  #123  
 
Join Date: Nov 2009
Posts: 525
Originally Posted by DCBob
The SunTrust Delta SkyMiles Debit MasterCard. No other debit card gives you at least 1 mile per dollar.
Any debit card earns AA miles?
mak101 is offline  
Old Mar 26, 2013, 3:38 pm
  #124  
 
Join Date: Jul 2011
Posts: 1,114
I just tried paying federal taxes on PayTaxUSA.com using PayPal Business Debit MasterCard and received an error message saying that I can't use this type of card. Has anyone else run into a similar problem?

It looks like PayTaxUSA.com and pay1040.com don't recognize it as a debit card, but think it's a credit card.
BigRedBears is offline  
Old Mar 26, 2013, 4:21 pm
  #125  
 
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
To answer some earlier questions - the Amex GC's processed as credit. I purchased them on Bigcrumbs with a 1.4% rebate, approximately 0.2% in purchase and shipping fees, and 1.9% to unload on payusatax and 2.3% on other sites. So it's a net loss, but not too bad, and I do get points on the CC I use to purchase the GC's and will meet my spend also.

I pay only personal taxes, not business. I work outside the USA so I don't have tax withheld.
redtop43 is offline  
Old Mar 27, 2013, 9:37 am
  #126  
 
Join Date: Nov 2007
Location: PHX
Posts: 4,792
Has anyone figured out the answer on the two payments per quarter issue?

My debit card has a $3k max so I would like to do more than 2 payments. Is this an IRS requirement or a requirement of the individual payment processors?

Edit: To answer my own question, I called payusatax and asked if I could make a third payment, and they said that the IRS limits each third party service to accepting 2 payments but that I could use one of their competitors. So, I used officalpayments and it appears to have gone through without a problem.

Last edited by lkar; Mar 27, 2013 at 4:08 pm
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Old Mar 27, 2013, 9:43 am
  #127  
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Join Date: May 2010
Posts: 2,998
Originally Posted by BigRedBears
I just tried paying federal taxes on PayTaxUSA.com using PayPal Business Debit MasterCard and received an error message saying that I can't use this type of card. Has anyone else run into a similar problem?

It looks like PayTaxUSA.com and pay1040.com don't recognize it as a debit card, but think it's a credit card.
Just had the same error. Your federal tax payment was declined by your card issuer
Stoughton is offline  
Old Mar 27, 2013, 8:06 pm
  #128  
 
Join Date: Apr 2012
Location: Bay Area, CA
Programs: AAdvantage, HHonors Diamond, WN RR A-list+
Posts: 584
Originally Posted by Stoughton
Just had the same error. Your federal tax payment was declined by your card issuer
I'm having the same problem.. called Citi and they said they have nothing on their end.
poser is offline  
Old Mar 28, 2013, 3:37 am
  #129  
 
Join Date: Apr 2011
Posts: 567
Was it a Citi debit or credit card? Any chance Citi credit cards code this as a cash advance?
bobby21 is offline  
Old Mar 28, 2013, 8:12 am
  #130  
 
Join Date: Apr 2012
Location: Bay Area, CA
Programs: AAdvantage, HHonors Diamond, WN RR A-list+
Posts: 584
Originally Posted by bobby21
Was it a Citi debit or credit card? Any chance Citi credit cards code this as a cash advance?
It was a Citi credit card.. I think its an issue with them because citi did not have any records of it hitting their end.
poser is offline  
Old Mar 28, 2013, 8:58 am
  #131  
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Join Date: May 2010
Posts: 2,998
Originally Posted by bobby21
Was it a Citi debit or credit card? Any chance Citi credit cards code this as a cash advance?
Mine was Paypal Debit
Stoughton is offline  
Old Mar 29, 2013, 6:09 am
  #132  
 
Join Date: Nov 2006
Location: LAX
Posts: 2,851
need help with completing e-filing for tax. On the last step "How do you want to pay for your federal tax?"....If I want to use Payusatax.com for credit card payment, do I check off " i will mail a check"?

Also, is it safe giving social security info to Payusatax.com site?

Best to call and pay or do it online to pay as far as safety?

Last edited by metoo; Mar 29, 2013 at 6:50 am
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Old Mar 29, 2013, 9:05 pm
  #133  
 
Join Date: Dec 2008
Posts: 367
Depending on the card used, the taxpayer's zip code has to match the zip code on the debit/credit card.
st.exupery is offline  
Old Mar 30, 2013, 2:58 pm
  #134  
 
Join Date: Apr 2012
Location: Bay Area, CA
Programs: AAdvantage, HHonors Diamond, WN RR A-list+
Posts: 584
Originally Posted by st.exupery
Depending on the card used, the taxpayer's zip code has to match the zip code on the debit/credit card.
Everything matches and I'm still getting declined.. Its not even hitting Citi, so its something on their end.
poser is offline  
Old Mar 30, 2013, 3:18 pm
  #135  
 
Join Date: Apr 2012
Location: Bay Area, CA
Programs: AAdvantage, HHonors Diamond, WN RR A-list+
Posts: 584
Figured it out..

My address is XXXX 1/2 and I tried XXXX 1.2 and it was processed!

Last edited by poser; Mar 30, 2013 at 3:27 pm
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