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Paying USA income, property or other taxes with CC. [2010-2012]

Paying USA income, property or other taxes with CC. [2010-2012]

Old Apr 15, 2011, 3:48 pm
  #91  
 
Join Date: Feb 2010
Location: Disney World
Programs: Fairmont Lifetime Platinum, Hyatt Globalist, AA Lifetime Gold
Posts: 321
Originally Posted by roder
I have a couple fairly large tax payments that I need to make this year (totaling around 26k)

I would like to put it on one of my cards to earn the points/miles (I do have the cash); but having a little trouble justifying the convenience fees (even though they are tax deductible)

Options I was considering:

-I was considering putting in on a regular Amex to get MR points; than transferring to skymiles since they are running a bonus + MQMs

-Capital One Venture Card; 2 pts per dollar (more hyatt gift certs!)

-BA Visa for the 2-for-1 certificate; but I earned one last year good till Oct 2012 so don't really need another oner.

-SPG Amex

Thoughts? Any bonus offers or specials out there that I don't know about?
I've been using the Fidelity Amex to pay at Valuetaxpayment. You get two points per dollar spent, which can turn into two aeroplan miles. The valuetaxpayment site charges 2.29%. So I am paying 1.145 cents per aeroplan mile. If the convenience fee is deductible for you then it is even lower.

Also, if you have the old Travelocity Amex (the one that is 4% back in travelocity credits) then it is also profitable to charge taxes on it.
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Old Apr 19, 2011, 5:06 pm
  #92  
 
Join Date: May 2008
Programs: AA PLT 2MM
Posts: 2,026
I used the SPG -> Big Crumbs -> AMEX GCs -> valuetaxpayment route.

Fees per SPG point = 2.29% - 1.8% = 0.49%

Or, half a cent per Starwood Point.

Unfortunately had to use official payments for California, which ups the cost to 0.7 cents per Starwood Point.

Since I value them at over a cent, I did it.

Regardless, IMO Chase AARP card would be better (especially if combined with Big Crumbs), but alas, didn't know about it in time to properly use it (i.e. apply for it and get it in time, and hopefully have an adequate credit line)

At any rate, guess I'm Starwood Gold again for next year...
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Old Apr 25, 2011, 1:42 am
  #93  
 
Join Date: Nov 2010
Location: ONT
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Originally Posted by kayjay
You shoudn't count on the convenience fee being tax deductible.
Why not? Assuming you can meet the 2% AGI threshold for miscellaneous deductions, it is deductible. For many high income people, of course, that's not going to happen, but strategy for lowering AGI is in a different thread.
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Old Apr 25, 2011, 3:23 pm
  #94  
 
Join Date: Nov 2007
Location: PHX
Posts: 4,792
I pay taxes with my USAirways mastercards to hit EQM spending targets.

I use my SPG Amex for most purchases, but some vendors don't take it. For these I use my USAir mastercard. Near the end of the year, I'm usually pretty well short of the $25k spend, which converts 10k rdm to eqm.

Just by way of example, if you were $15k short, you can spend 2 cpm to buy 15k rdm, of which 10k are eqm. I think this is a decent deal -- beats the heck out of a mileage run.
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Old Apr 25, 2011, 3:31 pm
  #95  
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The Chase AARP 5% rebate card seems ideal for this. Hopefully, it'll be around next year.
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Old Apr 25, 2011, 9:50 pm
  #96  
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Join Date: Jun 1999
Location: Houston, TX
Posts: 622
Originally Posted by cblaisd
Just to clarify, does that mean that your miles indeed posted?
Sorry for being away for so long. YES. They showed up as "MP* Purchase"
December 28 Houston Property Tax payments - Miles Posted
Jan 15 Estimated IRS Tax Payments - Miles Posted.

I will post on this thread when the miles post from April 15 payments.

Dodd-Frank is killing this and all other debit cards that earn miles since the amount that can be charged merchants is being capped at something like the amount it costs to actually process the transaction. I got a letter from Chase saying the cards will not earn miles starting in July 2011 and that I will get a prorated credit for the cost of the card.

In case you wondered and do have one of these Chase MP Visa's, there is an annual max of 120K miles and if you are or know someone who has large estimated tax payments (I am self employed) you can call fraud prevention and get a one day exemption on the limit on the card I know if you have the cash in the bank, they will go up to 75K in one transaction. Hypothetically, you could sign a letter agreement with a friend who has a large estimated tax bill if you have the card and agree to make payments on his behalf and get close to the limit before July.
Statement currently shows "MP* purchase" so the miles should post. Will report back.
BSL
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Old Apr 29, 2011, 10:57 am
  #97  
 
Join Date: Nov 2006
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I owed a big chunk of change this year. My accountant claimed none of his clients ever pay by CC because of the fees but there has to be a way to make it worth it even if I do pay a convenience fee. He also told me the convenience fee would not be deductible so I gave up trying after that and ran out of time anyways to research it fully.

I think getting EQMs via CC spend is a good return, but I don't fly USAir or DL to make it worth it for me. My next CC I get will be the SPG one, so I will have to look into trying theHawk's route.

I am meeting with the accountant next week to figure out if I can stop pre-paying our taxes and throwing it in a Bank Direct account instead until the bill is actually due in April. Anyone else go this route? I know the accountant is going to say the temptation is to spend but I don't do that. Instead I see that we paid almost $40K this year and I'm losing 4K AA miles a month by prepaying the government.

Last edited by sent; Apr 29, 2011 at 11:02 am
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Old May 1, 2011, 11:45 pm
  #98  
 
Join Date: Jun 2001
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where?

Originally Posted by calwatch
but strategy for lowering AGI is in a different thread.
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Old May 2, 2011, 9:23 am
  #99  
BSL
 
Join Date: Jun 1999
Location: Houston, TX
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Miles showing to be issued

Off of the Statement for the MP Debit card account:

Miles from Card ending in XXXX credited Mileage Plus ########
Mileage Plus Debit Card ending in XXXX - Miles from Visa Purchases 78,XXX

Just need to wait to see them actually post in the MP Account.

BSL
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Old May 26, 2011, 3:01 pm
  #100  
 
Join Date: Sep 2010
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Some great ideas in this post. I got a big bonus earlier this year and although I'm a W-2 employee, for some reason they didn't withhold taxes on the bonus. I'm on my third billing cycle of six for the Chase AARP Visa 5% cashback term, so even after the 2.29% convenience fee, I'll still be up a good $300 or so.

Too bad I can't go through bigcrumbs to buy Amex GC's, but everytime I try, they always cancel.
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Old Aug 26, 2011, 4:04 pm
  #101  
 
Join Date: Jun 2011
Location: MDW / ORD / LIT / PHX
Programs: Southwest CP, AAdvantage, United MP, SPG Gold
Posts: 15
Paying Corporate / Individual Taxes by cc

Has anyone been able to pay their individual or corporate income taxes by credit card with no fees or low convenience fees?

I'm specifically looking at IL's site, and the fees from the 3 options provided are higher than I'd like. I cannot think of another option to pay by cc to get points on these taxes.

Any ideas? Please PM me. Thanks!

Edit: UPDATE: I should add that the best rate I found is 1.9%

Last edited by Cous; Aug 26, 2011 at 4:24 pm Reason: update
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Old Aug 26, 2011, 4:26 pm
  #102  
 
Join Date: Oct 2010
Location: GGG, DFW, IAH
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Originally Posted by Cous
Has anyone been able to pay their individual or corporate income taxes by credit card with no fees or low convenience fees?

I'm specifically looking at IL's site, and the fees from the 3 options provided are higher than I'd like. I cannot think of another option to pay by cc to get points on these taxes.

Any ideas? Please PM me. Thanks!
There's been multiple posts on this board essentially concluding that there are not obviously cost-efficient ways to pay your taxes and mortgage with your credit card.

Being a CPA let me give you an honest advice - if you have a relatively decent tax bill (if you tax bill is not a decent just fight your obsession to earn mile from any transaction on the earth - pay cash and call it a day), just pay cash and bring whatever amount you would have paid in fees (to IL state to use your credit card) to your local CPA and ask how you could minimize your next year's tax bill. If you get to a good CPA I bet you he will help you save much more than you will pay him/her - this will probably be a much better return on your investment than if you will spend hours figuring out how to get an extra thousand miles (which may or may not be possible).
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Old Aug 26, 2011, 4:30 pm
  #103  
 
Join Date: May 2011
Posts: 668
I think the general consensus is that paying taxes or paying rent always incurs a 2.something% fee.

But it can still make sense if you are trying to get spending up to meet minimum spends for sign up bonuses. And it has the benefit that you're not buying gift cards, or charging yourself on Amazon payments, etc. These are activities that banks hate, and rightly regard as you doing a cash advance without paying their cash advance fees.

So paying taxes/rent with a CC is maybe a good way to get spending up without incurring an AMEX or other financial review. Although again, it's not worth it for the miles you make off the spend (because you're paying 2.5 cents on the dollar), only for bonus sign-up miles that you can't get from your regular spend.
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Old Aug 26, 2011, 6:04 pm
  #104  
 
Join Date: Jun 2011
Location: MDW / ORD / LIT / PHX
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Posts: 15
Thank you very much for the feedback. I really appreciate it.
I'm still learning on maximizing my miles.

Total taxes to pay is in excess of $600k, which got me excited, thinking not only will I pass the AA's 1MM threshold, I'll earn some SPG stays, as well as Southwest flights, and Cap1 Venture points, but I guess I got excited for nothing

Plus my search shows a 2-pay limit, and a 1.9% fee for the mastercard only; all others are 1.95% or higher.

I guess cutting a check is the way to go this time around. At least I save on the convenience fees. ::sigh::
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Old Aug 26, 2011, 6:59 pm
  #105  
 
Join Date: Aug 2009
Posts: 237
Originally Posted by Cous
Has anyone been able to pay their individual or corporate income taxes by credit card with no fees or low convenience fees?

I'm specifically looking at IL's site, and the fees from the 3 options provided are higher than I'd like. I cannot think of another option to pay by cc to get points on these taxes.

Any ideas? Please PM me. Thanks!

Edit: UPDATE: I should add that the best rate I found is 1.9%
I had a large tax bill last year and I explored every scenario possible and researched it online to no avail. Best option was to cut a check.
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