Paying USA income, property or other taxes with CC. [2010-2012]
#1
Original Poster
Join Date: Nov 2009
Location: RDU
Programs: Bonvoy Plat
Posts: 219
Paying USA income, property or other taxes with CC. [2010-2012]
I have never been in the situation I soon will be where I don't have income taxes taken out of pay checks. is there a way to pay income taxes with a credit card to rack up the miles? I would imagine there are fees associated with this.
#2
Join Date: Aug 2005
Location: DCA/IAD
Posts: 135
There are others, but that's the one I know first hand. As a self employed person paying quarterly estimated taxes, I use this method in situations where I know I'd otherwise be purchasing miles for some award need anyhow.
It can get expensive: the cost is generally about $0.0235 per dollar paid (miraculously close to what Amex charges to purchase miles in its MR program!) so proceed with caution!
#3
FlyerTalk Evangelist
Join Date: Dec 2003
Location: Benicia, California, USA
Programs: AA PLT,AS,UA PP,J6,FB,EY,LH,SQ,HH Dmd,Hyatt Glbl,Marriott Plat,IHG Plat,Accor Gold
Posts: 10,820
That's the site I use.
As sfernando points out, it's a definite trade-off between racking up the miles and racking up the service fee for paying with the cc. I nevertheless do it. It can be particularly useful if that payment helps you get over the hump in terms of qualifying for bonus points (e.g., the recent Citi AA offers of 75,000 points for $1,500 in spending within a given period) or if it helps you obtain or retain status (e.g., Hilton Honors Surpass Amex securing Diamond status with a calendar year spend of $40K).
As sfernando points out, it's a definite trade-off between racking up the miles and racking up the service fee for paying with the cc. I nevertheless do it. It can be particularly useful if that payment helps you get over the hump in terms of qualifying for bonus points (e.g., the recent Citi AA offers of 75,000 points for $1,500 in spending within a given period) or if it helps you obtain or retain status (e.g., Hilton Honors Surpass Amex securing Diamond status with a calendar year spend of $40K).
#4
Join Date: Nov 2007
Location: PHX
Posts: 4,787
Payusatax.com is another. I think they charge closer to 2%, but I don't think they take visa or amex for estimated payments.
Incidentally, one of these web sites says that the service fee is deductible as a business expense (subject to the 2 percent AGI requirement). I'm not sure whether this is true, but if your tax professional says yes, it reduces the effective cost.
2 to 2.3 cpm is a bit steep for me, but I did it in order to get the 100k AA citicard instead of the 75k one. I figured that paying $200 or so to meet the extra 8.5k spend requirement was worth it for an extra 25k miles (plus the 8.5k miles earned on the purchase). In situations like that, where you couldn't meet a spend requirement another way to get a bonus, I think it's a good thing.
Other places it might be useful include cards that give EQM you need for a spend you can't otherwise reach (like the USAir Barclays card).
Incidentally, one of these web sites says that the service fee is deductible as a business expense (subject to the 2 percent AGI requirement). I'm not sure whether this is true, but if your tax professional says yes, it reduces the effective cost.
2 to 2.3 cpm is a bit steep for me, but I did it in order to get the 100k AA citicard instead of the 75k one. I figured that paying $200 or so to meet the extra 8.5k spend requirement was worth it for an extra 25k miles (plus the 8.5k miles earned on the purchase). In situations like that, where you couldn't meet a spend requirement another way to get a bonus, I think it's a good thing.
Other places it might be useful include cards that give EQM you need for a spend you can't otherwise reach (like the USAir Barclays card).
#5
Join Date: Apr 2000
Location: Fort Myers, FL
Programs: Hilton Gold, SPG & IHG Plat, & every airline program that I can join
Posts: 2,279
I use payusatax.com It is 1.95% for a credit card. If you have the Travelocity Amex card you get 4% back in travel at one level so you can actually make a 2.05% profit, more if you can deduct the fee.
JudyJFLA
JudyJFLA
#6
Join Date: May 2002
Location: EWR/JFK/LGA
Programs: DL Silver, AA, UA Silver, Hilton Diamond, Marriott Gold
Posts: 389
the fee is not tax deductible
The fee to pay taxes via credit card is not a deductible expense, although many people do so and have not been caught.
#7
Join Date: Oct 2004
Location: BZN
Programs: AA:LT Platinum DL:LT Gold UA:1P MAR:LT Titanium
Posts: 8,289
Generally, when this fee is paid or incurred by a business, it can be deducted as a business expense. Typically, it is not tax deductible for the payment of personal taxes or for the payment of other government obligations. We advise you to consult with a tax professional regarding the tax deductibility of the convenience fee as it pertains to your particular application.
It can be particularly useful if that payment helps you get over the hump in terms of qualifying for bonus points (e.g., the recent Citi AA offers of 75,000 points for $1,500 in spending within a given period) or if it helps you obtain or retain status (e.g., Hilton Honors Surpass Amex securing Diamond status with a calendar year spend of $40K).
1) Charge exactly $60,000 to a Delta Amex Reserve card, earning 1.5 RDMs per dollar plus 30,000 MQMs. (You can get 2.5 RDMs per dollar if you time it with a double-miles promo, like the one that took place this fall.)
2) Charge a Chase Marriott Visa Premiere card $180,000 less ($3K * however many EQNs you already have) to add to the 15 EQNs you get for having the card to obtain Platinum status with Marriott. Do this every *other* year in January, and you'll maintain Platinum status endlessly. For at least this year, any EQNs beyond a tier status will count double, as they will roll over *and* they will count twice towards lifetime status, too. I took the opportunity to load up on a lot of nights this way, earlier this year, putting me in a good position for Lifetime Platinum in a few more years.
#9
Join Date: Jun 2006
Location: BOS
Programs: Hyatt Diamond, Mosaic
Posts: 1,050
Or certain debit cards by a certain bank( sun trust )
#10
Join Date: Nov 2000
Programs: UA 1K, DL DM, EK PL
Posts: 227
Hmmm.... I have a colossal personal tax payment coming up in December (Federal and State) that I'd like some way to take advantage of. Its over $1.2 million.... I have the Morgan Stanley World MC, which gets points in their program that can be used for anything, so as a junkie, if its the right number per mile, I'm willing to pay up big for enough miles/points.
Any advice would be very helpful. Crazy or no?
I dont need status on anything, as I get it by flying. But I love to use miles for friends/family, and cant get away from earning over 1 million miles in one transaction....
Any advice would be very helpful. Crazy or no?
I dont need status on anything, as I get it by flying. But I love to use miles for friends/family, and cant get away from earning over 1 million miles in one transaction....
#11
Join Date: Oct 2004
Location: BZN
Programs: AA:LT Platinum DL:LT Gold UA:1P MAR:LT Titanium
Posts: 8,289
Hmmm.... I have a colossal personal tax payment coming up in December (Federal and State) that I'd like some way to take advantage of. Its over $1.2 million.... I have the Morgan Stanley World MC, which gets points in their program that can be used for anything, so as a junkie, if its the right number per mile, I'm willing to pay up big for enough miles/points.
Any advice would be very helpful. Crazy or no?
I dont need status on anything, as I get it by flying. But I love to use miles for friends/family, and cant get away from earning over 1 million miles in one transaction....
Any advice would be very helpful. Crazy or no?
I dont need status on anything, as I get it by flying. But I love to use miles for friends/family, and cant get away from earning over 1 million miles in one transaction....
You should also evaluate other ways of earning rewards through card spending, including hitting spending thresholds. Buying coins from the US Mint, for example. It's not for everyone, but can be preferable and cheaper for some.
Yet another consideration is what kind of points/miles/awards you are earning. Many of us value Starwood (SPG) points much more than other hotels or airlines, but it really depends upon your usage patterns. Also, SPG points typically don't earn much at various thresholds, though there are periodic conversion bonus opportunities.
#12
Join Date: Aug 2009
Location: Western Mass
Programs: AA, HH, Hyatt Gold, Marriott Platinum, UA, DL, US
Posts: 424
I paid my 2009 taxes on my Marriott Signature Visa. The only fees I paid were the standard APR on the credit card. No extras. I got a hell of a lot of points, but I am also still paying it off, so the interest is killing me a little deep down. However, it was either that or set up another payment plan with the government and I'm trying to get them out of my bank accounts for the first time in 20 years. (self-employed and always screwed by the feds)
JB
JB
#14
Join Date: Apr 2005
Location: Corpus Christi
Programs: UA, AA
Posts: 99
Here is the IRS site that lists authorized payment links:
http://www.irs.gov/efile/article/0,,id=101316,00.html
http://www.irs.gov/efile/article/0,,id=101316,00.html
#15
Join Date: Jun 2010
Posts: 292
payusatax.com thread
Here is a related flyertalk thread, mostly focused on payusatax.com: http://www.flyertalk.com/forum/miles...satax-com.html .