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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 Dec 19, 2012, 8:44 am
  #1  
mia
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Paying USA income, property or other taxes with a credit card

Previous discussion of this topic is in this thread:

http://www.flyertalk.com/forum/miles...10-2012-a.html

The thread has been split because there are new developments for paying taxes in 2013 using (for example) American Express Bluebird account, and some credit card processors have lowered their fees (see post 17).

Last edited by mia; Jan 15, 2013 at 8:16 am
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Old Dec 21, 2012, 7:51 am
  #2  
 
Join Date: Apr 2006
Posts: 1,259
Paying USA income, property or other taxes with CC. [2013]

So has anybody figured out a way to pay a 1040 ES using BB yet? I know earlier there was some talk about sending the check to your own address made out to the IRS and then mailing it in. Has anyone tried this method with success? Thanks!
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Old Dec 21, 2012, 10:44 am
  #3  
 
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Originally Posted by bangkokiscool
So has anybody figured out a way to pay a 1040 ES using BB yet? I know earlier there was some talk about sending the check to your own address made out to the IRS and then mailing it in. Has anyone tried this method with success? Thanks!
Wouldn't it be ok to set the US Treasury as the payee and have it mailed directly to them?
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Old Dec 21, 2012, 1:03 pm
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Originally Posted by bluto
Wouldn't it be ok to set the US Treasury as the payee and have it mailed directly to them?
Well it would be a paper check and I'm not super confident the IRS will properly credit me without a payment slip. Should I be concerned?
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Old Dec 28, 2012, 3:48 am
  #5  
 
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Officialpayments.com just accpted my JCB Marukai Premium California card for payment of California estimated income tax. I have not tried Federal. This particular card pays ~3%, but is only issued to residents of a few Western US states, and often with a low credit limit.
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Old Jan 1, 2013, 2:21 pm
  #6  
 
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How many tax payments can you make?
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Old Jan 2, 2013, 10:50 am
  #7  
 
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Originally Posted by QL_714
How many tax payments can you make?
Officialpayments phone support let me make about a dozen or so payments through their phone support (visa gift cards at their debit card rate) and didn't indicate that there was a limit. In comparison, I could not get through to payusatax phone support. I explained to the officialpayments representative that I was calling because I had hit the online limit and she confirmed that she could process additional payments. The representative was very cooperative when I told her that every detail of the payments would be same except for the last eight digits of the card. She did have to reenter stuff with every payment, but all I had to do was give her the last eight digits of each card and say "yes" at various points when she had to read the details of each payment to me. She gave me a separate confirmation number for each payment.

That said, I got a phone call an hour or so ago from officialpayments telling me that they were voiding another federal tax payment I did in that phone call with my Marukai JCB card, for which I had been issued a confirmation number. I asked what about the California tax payment I had made a few days earlier with that card, and she told me she'd call back.

Mentioning the California tax payment with my JCB card was definitely a double edged sword, but these were just test payments, and I'd rather have a more certain answer to report. I plan to post an update on the JCB issue when I have more information.
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Old Jan 2, 2013, 11:30 am
  #8  
 
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Skynerd, thanks for that report. This may be a good way to go for paying a large federal tax bill.

Has anyone tried using a My Vanilla Debit to pay taxes? It should work at the debit card rate, but I'm wondering if there's a daily limit or transaction limit for each charge.
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Old Jan 2, 2013, 12:24 pm
  #9  
 
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Originally Posted by bangkokiscool
Skynerd, thanks for that report. This may be a good way to go for paying a large federal tax bill.

Has anyone tried using a My Vanilla Debit to pay taxes? It should work at the debit card rate, but I'm wondering if there's a daily limit or transaction limit for each charge.
Giving credit where it's due, I think I first read about officialpayments charging the debit card rate for Vanilla Visa gift cards and allowing more than 2 payments by phone support on the frequentmiler blog. I have not tried that reloadable Vanilla card, which I think is what you're referring to.
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Old Jan 2, 2013, 12:25 pm
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I received a second call from officialpayments just now. My California tax payment on my JCB card was accepted even though my federal tax payment on the same card was rejected. The phone rep said that the issue with JCB cards rejecting federal tax payments has been going on for a long time, but she doesn't recall a rejection of a California tax payments. It is worth noting that their web site has (had?) different rules for California tax payments: the minimum fee is $1 instead of $3.95 and all payments are processed as credit card payments. So, maybe JCB with officialpayments really does work for California and not federal.

I was also told that officialpayments rolled out a big software upgrade for the new year. Now their web site does not ask you what kind of credit card you are using for federal payments. It just infers it from your card number. When I put in a vanilla visa card number, it offered me the debit card rate. When I put in my JCB card number, it correctly described it as "Discover Network." So, there is a remote chance that maybe federal payments will work with JCB on officialpayments now.

The officialpayments California web pages appear unchanged, by the way.

Last edited by skynerd; Jan 2, 2013 at 12:53 pm Reason: "it is worth" --> "it is worth noting"
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Old Jan 2, 2013, 1:25 pm
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Good idea

Originally Posted by johndoe123
Leave whatever oddball amount you want (although more than $10 works best).

go to a gas station and put $27.43 or whatever of gas in your car. Toss gift card in trash.

Easiest way, by far, to not end up with an orphaned balance.
This is a good idea. Obvious perhaps, but I must admit it didn't occour to me.
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Old Jan 5, 2013, 7:51 pm
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Well, I paid my half year property taxes today using plain old Vanilla Visa gift cards. I had to do multiple transactions of $496.05 + $3.95 debit fee each time to liquidate each $500 card, but the fees still came out much lower than paying the normal CC fee which is 2.35%. As always since each municipality presumably uses a different form of online merchant processing YMMV, but it's good to know for some payment systems just a plan old off-the-shelf Vanilla card will do the trick.
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Old Jan 11, 2013, 12:31 pm
  #13  
 
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Can't get this to work in Los Angeles county (re: property taxes).

If anyone knows how to get this to work in LA County... please let me know the trick. My issue is that the installments are all over the max amount on the debit card, so making an automated payment via phone or online wouldn't be enough.
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Old Jan 11, 2013, 1:08 pm
  #14  
 
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Originally Posted by bangkokiscool
So has anybody figured out a way to pay a 1040 ES using BB yet? I know earlier there was some talk about sending the check to your own address made out to the IRS and then mailing it in. Has anyone tried this method with success? Thanks!
I'm going to try paying state estimated taxes first. I entered a payment to my state (California Franchise Tax Board) on Jan 5th and had the check mailed to me at my home address with my name and address on it. Received the check Jan 10th. I'll photocopy it and send it along with the payment stub plus a personal check for the remaining balance of the payment due when I mail my 4th quater estimated tax on Jan 15th.

This oughta work.... And I see no reason why the same approach would not work with Federal estimates.

The limitation is that Bluebird would not let me write a check for more than $5000. So if your state or federal estimate is higher than that, you'd either have to do this over several months or pay the balance by some other means.
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Old Jan 11, 2013, 2:42 pm
  #15  
 
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Originally Posted by flyflyflyokokok
Can't get this to work in Los Angeles county (re: property taxes).

If anyone knows how to get this to work in LA County... please let me know the trick. My issue is that the installments are all over the max amount on the debit card, so making an automated payment via phone or online wouldn't be enough.
This may not be the answer you're looking for, but what about logging on and making a maximum payment every day until your bill is paid? Is the service fee too high to make this work daily for several days? Where does it state that you can not make daily payments as long as the total is paid on or before the due date?
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