mistake (duplicate, edited)

Yes, UA is United Airlines, and if you don't live in a city UA flies to/from, then their FFP (MileagePlus) will be less attractive to you. (BTW, which city do you fly to/from?) But if you are really intent on gaining miles with a substantial tax payment in coming months, and if it is true that AA only offers that opportunity once a year, then you could act quickly to join MP and get a UA Visa, then later make use of the UA/MP miles earned to fly on other *A carriers domestically (US/HP) or internationally (see list).

Things to consider
 

The 2.49% fee charged is consider a business expense if paying business tax and thus a write off and since miles aren't taxed by the IRS you are fee to use your miles for personal travel. Thus depending on what tax bracket your in minus that amount from the cost of your miles... Make sense?

It makes sense to me, but that doesn't mean the IRS won't challege it as not being an actual and necessary business expense. Of course, that would only happen in an audit, which is very unlikely for most people.

Should I Do It?
 

I was referred here from another thread (I'm a newbie). Here's my question:

Due to some complicated real estate and corporate deals, I owe approximately $500,000 in federal and local taxes for which payment will be made shortly.

I am Platinum on AA and have verified that I am not subject to an annual limitation for miles on my Citibank Platinum AAdvantage Master Card.

Citibank's Citicards division has worked out a way for me to charge the full $500,000 with no problem. (They want a check in advance :) )

The cost of charging this entire bill on official payments is $12,450. This will earn me 500,000 AAdvantage miles plus lifetime Gold status and get me a good deal further along the road to lifetime Platinum status.

I usually redeem my miles for upgrades.

I can afford the $12,450.

Should I do it or should I just write a check?

Your thoughts and advice would be appreciated.

It seems you are not getting the double miles with a fee of 1.99% deal that was there a month ago. If you were, you would be realizing 1M AAdvantage miles for under $10K, not 500K miles for $12,450. 500K of miles for $12,450 gives you 2.49 cpm. And because you will be pre-paying the credit card issuer, you will be loosing interest on that $500K for however many days you might otherwise hang on to it before forking it over to the tax authorities, so your effective cost will be still higher. This "opportunity" with the Citibank card wouldn't tempt me.

Okay, I read you.

I want to make a call and see if they are willing to work something out.

Who was offerring the double mileage, Citibank or Official Payments?

I assume the 1.99% was Official Payments.

Hello OP,

I may as well throw my two cents in. I am a big fan of using credit card to get miles. And there's a many people who disagree with me. And that's where agree to disagree.

There's a huge advantage to you using your credit card to get 500,000 miles for $12,xxx. The advantage is that you get at least three people first class to Australia or four people (I think) in business class. Considering a first class ticket to Australia is $12,000 -- you are ahead because you have to pay the taxes anyway.

But the other part of me says.... hey pal, if you have to pay IRS $500,000 -- you ain't got to worry about how much a first class ticket class ticket costs.... you know what I'm saying?

I'm a miles hog and proud of it.

Other people have already heard mile trip... I charge all my taxes -- US, California and property on my UA Visa -- got double miles and flew first class to Sydney last June. The seat was 120,000 miles... therefore $60,000 worth of taxes..times whatever... I think I paid around $2,000 in fees. And I'm sitting first class on 747 to Sydney that would have cost $12,000.

I'm behind you regardless what you do... but them miles look pretty good from here.

David

Thanks, David. Now if only I could find out who was offering DOUBLE MILES. . .

Hello Landing Gear,

You may have to "spread the wealth." But I think you are out of luck for the full $500,000. I guess... somehow use an UAL Visa..... but that's as far as I know.

Good luck, Landing Gear. Should you be caught you or killed, the secretary will disavow any knowledge of your actions.

David

Have a look at earlier posts to this thread and your question will be answered for you. You could get double miles with a SPG AmEx for 2.49%, but only up to $5K of taxes, then it was the usual $1 = 1 mile. With the Citibank AA card, I believe (no personal experience) it was double miles with no cap on how much you could pay and a fee of only 1.99%, but I gather that offer is no longer there. With the United Visa you get double miles with no cap on how much you can pay, a fee of 2.49%, and the offer is still out there.

Thanks very much.

Once my accountants give me the final numbers, I will start calling and see if anyone is willing to cut me some slack on the deal.

I'll report the results back here if anyone expresses interest in me doing so.

Yes please let us know any all breaks, although my tax bill will hopefully
be under or about the $100,000. (Got to love the capital gains cap!)
I am still wondering about putting in on the SPG Amex card and using the
miles for some first class travel or first class upgrades.

At the risk of sounding like a tout for a particular airline and credit card, let me say one last time, U-N-I-T-E-D V-I-S-A is the deal because it serves up twice the fun (double miles) for the price (2.49% of tax bill paid), giving a net cost of 1.245 cpm. The SPG AmEx double mile offer, of which I availed myself to the max last month, is over, and from other posts to this thread I gather the Citibank AA double mile one is over too.

If in your own personal equation, however, AA miles are worth 1.99 cents and/or SPG points are worth 2.49 cents, then go ahead and use them for your tax payments. I would be very surprised to hear that either Citibank or SPG AmEx was going to make a special exception for anyone to charge their taxes now and get double miles.

As soon as I have my tax forms done, I will approach Official Payments, Citicards, and whoever else I need to ask to see if they will give me at least the double miles. A $12,000 fee is nothing to sneeze at, no?