I've seen posts from previous years that some credit cards were offering double miles or points if you charged your income tax payment. Can't find anything like that this year. Does any know of any special offers like that?

 

Txtrav,

In short, there are never any good deals for paying your taxes (or any other similar bill) with a credit card. Most, if not all such services are going to charge you ~3% surcharge for this service.

Lets do the math,

Say you owe $10,000, pay with a credit card, get 1 maybe 2 miles/points per dollar. You would spend $300 to get 10,000, maybe 20,000 miles/points. Why would you do this, I don't know.

Instead, apply for one of the many credit cards that will give you 20,000 -25,000 miles/points with the first year annual fee waived. It cost nothing.

Your idea sounds good, it just does not work.

 

Citi has a card that comes with 5 thank you points for the first three months, so you would net at least 2% after the transaction fee if you go for a gift card, up to 4% if you go for fixed flight redemptions.

 

I would disadree with you. As mentioned above citi has a card that gives you 5 thank you point per dollar sopent for the first 3 month.

I personally use citi platinum amex and get 3 thank you points per dollar spent. You also make points on a fees charged (officialpayments chare 2.49%) So your net profit is at least $0.51 (not calculating points made on the fee, just to late for me ) Plus if you redeem your points for fixed flight option (20,000= up to $400 (before taxes) ticket anywhere in US) then it is even much more.

Judge for yourself if it is a good deal for you, but it is an amazing deal for me because I have to pay taxes quarterly and it gives me about 40-50 days extra to pay plus of course extra typ

 

Perhaps you are referring to Citi CashReturns MasterCard...

https://www.citicards.com/cards/wv/c...o?screenID=946

This card offers 5% cash for the first three months, not points. The only pitfall is this is a standard Mastercard, not Signature, not Platinum, not even Gold. This probably means that the maximum credit limit Citi will issue is low, and it might be necessary to pay the taxes in more than one transaction.

 

Actually in doing the math it does work for me (2.49% fee, like others we pay quarterly taxes so our bill is pretty large). If I put this on my SPG Amex and use the points for cash & points for a nice resort like Hawaii I can justify about 4 cents per point. I was just hoping that some card was giving DOUBLE points or miles like several did in the past.

 

There is a long-running (>2 years), multi-post (>350) regarding using credit cards to pay taxes. Read it and see whether you agree, "In short, there are never any good deals for paying your taxes (or any other similar bill) with a credit card." I certainly don't.

http://www.flyertalk.com/forum/showthread.php?t=527045

Figuring that I knew what there was to know about paying taxes with a credit card, I wasn't going to open this thread. But I did, and I'm glad that I did, because it has caused me to consider additional possibilities.

I have used my UA MP Chase card to pay substantial $$$ of taxes and racked up 2 x $$$ for doing so, much to my satisfaction. But now Chase is targeting their pay-your-taxes double mile offer and capping it too, so not what is was last year. (Lastima! Or, quel dommage, if you will.)

I never had occasion to think about alternatives to the Chase one, except that I did use my SPG Amex for an extra 5K of SPG for paying $5K of taxes with the card. (Don't think they are repeating that opportunity, unfortunately, especially since 1 SPG is worth > 1 UA.) Now, thanks to those who have posted here, I see other possibilities, including with the SPG even without double miles/points.

I value SPG at 2.25 cpp for myself. That allows me to gain through the use of points at SPG properties, though not nearly to the extent I could prior to 2/1/07, when SPG so greatly devalued. 2.25 is less than the 2.49 cpp cost for using the SPG Amex to pay the taxes, but with the float on my money until that 2.49 must be paid, the effective cost it to less than 2.25 cpp. (I won't use the Chase UA MP card without double miles because I don't impute so great a value to miles, valuing them no higher than 1.5 cpm, though I have gotten much better value on occasion using miles for award travel.)

 

The credit limit issue bears looking into. Official Payments does invite those who want to make particularly large payments with their credit card to contact them directly to arrange it. I don't know if one can "prepay" their credit card account to create a "positive" balance, then go ahead and charge a substantial tax payment. "Prepaying" may come a cropper over "money laundering" controls, even though one's purpose may be entirely above aboard. And I believe that Official Payment can take only one payment for a given Social Security number, precluding breaking down one's tax liabilities into smaller amounts and making a series of payments to cover the total.

Does anyone know if it would cause any problems with IRS or state tax authorities to make separate payments under spouse's SSN and one's own SSN using different cards when filing jointly? My accountant doesn't like me departing from the straightforward way of going about tax payments, not appreciating how nice it is to be rewarded with points/miles.

 

6. What is the maximum number of credit card payments allowed?
You can make up to two payments for the same Social Security Number and tax return type (e.g., 1040, 4868, 1040ES) during the same tax year (1040, 4868, Advance Payment of a Determined Deficiency), quarter (1040ES, Trust Fund Recovery Penalty for Prior Tax Periods) or month (Installment Agreement payments for Form 1040 and for a Trust Fund Recovery Penalty).

https://www.officialpayments.com/hp_...5!1250413609#6

 

Thanks. So, I guess if it was only about credit line limits on the card, not about caps on a double mile/point offer, then one could in effect pay twice their credit line limit by doing it as a two-step.

Now, what about the IRS (or state) side of it? Would one run into problems if they made payments under their SSN on one card and under their spouse's SSN when filing jointly? Maybe wouldn't credit properly or would kick out? If both spouses can make payments, then can make use of combined credit limits and maximum use in the face of caps.

Is there time for me to get one of those Citi cards in order to take advantage of the tax-paying opportunity with them, especially the cash back ones?

Also, can one get around credit limits by first creating a positive (overpaid) balance, so there is a credit there, before they undertake to make an especially large tax payment? No "money laundering" problem, is there? (I would never think "money laundering" or anything of the sort an issue, but I think I recall a credit card person saying something about the controls they have in place to prevent "money laundering" and that those controls might preclude creating a large positive balance by overpaying or pre-paying.)

mia, you seem to be impressively well-informed about credit card matters (industry experience?), whadya think?

 

I can answer this part. We did it and then forgot about the payment on the second social security number, however IRS found it but had not credited it because they only credit the first SSN on the joint tax return. It took some time on the phone and some paperwork to get the payment of the second SSN properly credited to the joint tax return. Ours just sat in limbo at IRS for a year

 

Generating a large positive balance on your credit card may just get your account locked due to a fraud alert. There are several reports of it at fatwallet when people tried to balance transfer to an empty card. Some might allow it, some might reject the payment, some might lock the account. I would call before generating a large positive balance.

 

Hard to see why a substantial "overpayment" or "pre-payment" should be a concern for the credit card company, but I suppose theirs is a better-safe-than-sorry one, so they flag anything that is very unusual, whether in charging or payment pattern, with a big "over" or "pre-" being very unusual.

Anyway, if it is not a "money laundering" issue with all the problems that might bring, but rather a possible fraud concern, there may be the opportunity to arrange it with a phone call or other communication, perhaps getting Official Payments involved. (It's very hard to find contact info for OP, so as to speak to someone rather than go through their endless loops of menus that allow for no human intervention.)

 

Not quite clear from your account what happened (you "forgot" that you made a second payment?!), but it makes the point that departures from the tried and true can lead to screw-ups. I do wonder if one could avoid something like you experienced by alerting IRS (or state tax authorities) upfront to more than one payment under two different SSNs for the same joint filing.

Did you wind up paying any penalties? Were you paying from two different credit cards, yours and your spouse's, in connection with a double miles offer with caps, or because the credit lines were insufficient by themselves?

 

I suppose it depends on how large, but I have made positive balances of well over $100k with Amex and Chase while taking advantage of tax payments over the years. Never had a problem. I have done this both as standard advance payments by check and with wires to Chase and Amex.

With Amex, if you are going to pay over $99k you must call in and have Amex make the payment or you must break the payment in to multiples.

Finally, watch out with your payment splitting. The processing services (supposedly due to Fed regulations) will only accept a maximum number of separate tax payments per quarter to the same SSN. You can double this number by doing the max at officialpayments and the max at pay1040.

Also, remember that any credit card can be used to pay your taxes. Including cards not owned by the tax payer. As a result, if you max out your Chase double points, you could let a trusted friend or relative also max out theirs on your tax bill.