Mar 18, 2016, 8:54 am
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.
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
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
Paying USA income, property or other taxes with a credit card
Jan 28, 2013, 1:02 pm
#46
Join Date: Jun 2012
Location: Atlanta
Programs: Delta Diamond; HHonors Diamond
Posts: 655
I just wish I'd known about this sooner. I paid over $100K to the IRS in estimated tax payments last year due to a one time jump in my income from converting retirement accounts to Roth. If I had opened a Suntrust debit account and charged those, it would have landed me a bunch of miles. Rats.
I may have to think about firing my third party payroll service and doing all my own tax payments when my company pays me my salary. The downside is that it's an administrative hassle to keep up with exactly what to pay the IRS, state department of revenue, and state unemployment agency, especially the last one.
I may have to think about firing my third party payroll service and doing all my own tax payments when my company pays me my salary. The downside is that it's an administrative hassle to keep up with exactly what to pay the IRS, state department of revenue, and state unemployment agency, especially the last one.
Jan 28, 2013, 11:29 pm
#48
Join Date: Oct 2003
Location: PDX/AUS
Programs: AA-UA-AS IHG-SPG-Carlson
Posts: 4,562
I will probably pay the 1.9% on $3K or so
to accelerate meeting the AX Plat promo spend for 100K MR points. ^
Jan 29, 2013, 7:48 am
#49
Moderator
Original Poster
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: AA & Marriott Perpetual Platinum; DL & HH Gold
Posts: 48,954
You cannot make Federal Tax Deposits with a debit or credit card.
Jan 29, 2013, 9:01 am
#50
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: 4,550
You may wish to review this plan with your accountant. IRS says:
It would certainly be possible to reduce your withholding to the legal minimum and pay the balance with a credit/debit card.
I think (not sure) that "Federal Tax Deposits" refer to money an employer withholds from employees paychecks, rather than the liability of the individual employee for their taxes.
Jan 29, 2013, 9:08 am
#51
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: 4,550
I was planning on doing just that. I bought a GC last weekend to do a test, but OfficialPayments does not accept payments for 2013 taxes until March 1.
Each GC costs about $5 to buy and $4 to unload, so that's $9, for 2500 UR points worth at least $31.25. I expect my quarterly taxes to be about $7500. For a profit of $330, I can make a trip to Office Depot and then spend a half-hour on the phone with Official Payments.
Jan 29, 2013, 9:26 am
#52
Moderator
Original Poster
Join Date: Jun 2003
Location: Miami, Mpls & London
Programs: AA & Marriott Perpetual Platinum; DL & HH Gold
Posts: 48,954
I wasn't sure what the poster meant about "Firing my payroll service... when my company pays me my salary."
Jan 29, 2013, 5:22 pm
#53
Join Date: Jun 2012
Location: Atlanta
Programs: Delta Diamond; HHonors Diamond
Posts: 655
Yes.
I take it to mean that GatorBlues is a principal of a closely held business from which s/he draws a salary, and that the notion is to stop making Federal Tax Deposits through the Electronic Federal Tax Payment System. I don't think this is permitted even if GatorBlues is the only employee, but an accountant can understand what the rules allow and what consequences, if any, there might be for making the deposits in an unorthodox method.
I take it to mean that GatorBlues is a principal of a closely held business from which s/he draws a salary, and that the notion is to stop making Federal Tax Deposits through the Electronic Federal Tax Payment System. I don't think this is permitted even if GatorBlues is the only employee, but an accountant can understand what the rules allow and what consequences, if any, there might be for making the deposits in an unorthodox method.
My own personal estimated tax payments, however, can be made by credit card by paying the roughly 2% free and I intend to do this in the future if the estimated minimum spend will get me to a valuable points threshold.
Jan 30, 2013, 6:07 am
#54
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: 4,550
You are correct on both counts. I am the 100% owner of an S-Corp and pay myself almost all of its profits as a salary. I briefly looked into whether my corporation could make its federal tax deposits by AMEX by paying the transaction fee and it appears that it cannot, although I did not research it exhaustively. So, my payroll service gets to keep my business.
My own personal estimated tax payments, however, can be made by credit card by paying the roughly 2% free and I intend to do this in the future if the estimated minimum spend will get me to a valuable points threshold.
My own personal estimated tax payments, however, can be made by credit card by paying the roughly 2% free and I intend to do this in the future if the estimated minimum spend will get me to a valuable points threshold.
I work offshore now, so I have nothing withheld.
Jan 30, 2013, 8:16 am
#55
Join Date: Jun 2012
Location: Atlanta
Programs: Delta Diamond; HHonors Diamond
Posts: 655
I'm not an accountant either, but I think there is risk in getting hit with underwitholding penalties if you don't get your estimated tax payments right. But if you stay in the safe harbor, then this ought to work. This is not tax or legal advice and anyone reading this thread should consult a professional before exploring the idea.
Jan 30, 2013, 7:29 pm
#56
Join Date: Dec 2005
Location: Washington, DC
Posts: 1,727
I'm not an accountant either, but I think there is risk in getting hit with underwitholding penalties if you don't get your estimated tax payments right. But if you stay in the safe harbor, then this ought to work. This is not tax or legal advice and anyone reading this thread should consult a professional before exploring the idea.
http://www.irs.gov/taxtopics/tc306.html
Topic 306 - Penalty for Underpayment of Estimated Tax
The United States income tax is a pay-as-you-go tax, which means that tax must be paid as you earn or receive your income during the year. You can either do this through withholding or by making estimated tax payments. If you do not pay your tax through withholding, or do not pay enough tax that way, you might also have to pay estimated taxes. If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information.
Generally, estimated tax payments should be made in four equal amounts to avoid a penalty. However, if your income is received unevenly during the year, you may be able to avoid or lower the penalty by annualizing your income and making unequal payments. Use Form 2210 (PDF), Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if you owe a penalty for underpaying your estimated tax.
The penalty may be waived if:
The failure to make estimated payments was caused by a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty, or
You retired (after reaching age 62) or became disabled during the tax year for which estimated payments were required to be made or in the preceding tax year, and the underpayment was due to reasonable cause and not willful neglect.
Please refer to the Form 1040 Instructions or the Form 1040A Instructions for where to report the estimated tax penalty on your return.
The United States income tax is a pay-as-you-go tax, which means that tax must be paid as you earn or receive your income during the year. You can either do this through withholding or by making estimated tax payments. If you do not pay your tax through withholding, or do not pay enough tax that way, you might also have to pay estimated taxes. If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information.
Generally, estimated tax payments should be made in four equal amounts to avoid a penalty. However, if your income is received unevenly during the year, you may be able to avoid or lower the penalty by annualizing your income and making unequal payments. Use Form 2210 (PDF), Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if you owe a penalty for underpaying your estimated tax.
The penalty may be waived if:
The failure to make estimated payments was caused by a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty, or
You retired (after reaching age 62) or became disabled during the tax year for which estimated payments were required to be made or in the preceding tax year, and the underpayment was due to reasonable cause and not willful neglect.
Please refer to the Form 1040 Instructions or the Form 1040A Instructions for where to report the estimated tax penalty on your return.
Jan 31, 2013, 4:52 am
#57
Join Date: Apr 2011
Posts: 567
I am trying to pay 2013 estimated taxes in advance - 1040 ES, but none of the providers are allowing it now - I see only options for 2012 taxes. Does anyone know any provider? I know the deadline for 1Q is 4/15, but I need to meet a credit card spend by mid february.
Jan 31, 2013, 6:34 pm
#59
Join Date: Sep 2011
Posts: 49
California property taxes with multiple vanilla visas??
My online prop tax website says payment must be made in one payment, this eliminates the ability to pay with multiple visa gift cards...does anyone have experience or ideas on how to maximize chase ink vanilla Visa cards for 5pts to pay in one payment, or if they will take multiple cards in person at the office?
Jan 31, 2013, 6:57 pm
#60
Join Date: Sep 2011
Posts: 49
My online prop tax website says payment must be made in one payment, this eliminates the ability to pay with multiple visa gift cards...does anyone have experience or ideas on how to maximize chase ink vanilla Visa cards for 5pts to pay in one payment, or if they will take multiple cards in person at the office?