Well, at 2 1/2%, with double miles, you aren't far off. UA has no cap right now.

As an aside, when CCs were first going to be considered for tax payments, the bankruptcy code was amended a few years back to make debts incurred to pay taxes (including CCs) follow the same dischargeability rules as unpaid taxes (a complicated analysis), as opposed to regular credit card dischargeability rules. [See 11 U.S.C §§523(a)(14), (a)(14A)]

You make a good point, but I just have so much energy and time for this game and I found that chasing the bonuses was starting to distort my (usually) rational purchasing behavior. Its kind of like double coupons at the grocery which we have in my area. Its nice to get two bucks off, but how many poptarts do I really need?

And, at least with poptarts, I can always eat 'em. With miles, who knows when a vast devaluation might come along. Or the miles might just disappear (unlike my uneaten cherry poptarts) So far, miles have come through the bankruptcy courts okay, but it doesn't have to always be that way.

not talking poptarts
 

This conversation is taking place on the MilesBuzz forum, where "information related to the latest frequent flyer program buzz" gets posted and discussed by those interested in "a miles or points offer." Someone may participate in FT because they are after low fares or other travel-related information that can be gained through FT, but if they are little interested in miles or points, then on this particular forum they will be like a vegan listening to non-vegans sharing recipes for meat, poutry, or fish. (I have never eaten a poptart or looked at the package labeling, so I don't know whether they are made with dairy products that a strict vegan would abjure.)

FTers differ as to the value of miles/points. I myself would not rush to buy airline miles at 2 cents per mile, because that is too expensive a plug-in when all is taken into account for me. (The Citibank Aadvantage MasterCard reduced "convenience" fee of 1.99% on federal tax payments appears to yield AA miles at approximately 2 cpm, which is 60% more expensive than what one can get UA miles for with the UA VISA card offer, and perhaps still more unfavorable in comparison to the SPG AmEx deal, since SPG points transfer more favorably than 1:1 into airline miles other than UA ones.) But when UA miles are there for purchase at 1.25 cpm, or maybe less on other carriers through SPG, and there are additional benefits to use of the charge card, then I am interested, notwithstanding threats of airline bankruptcies, limits on award seat availability, etc. And a deal like this one can yield me a great deal more than can double coupon savings on poptarts, even if I did eat them.

I have a balance transfer out with Discover now for a couple of years. The interest rate is 0 and I don't use the card to charge anything. It was up to $13,000 now just under $10,000 since I must pay the minimum balance each month. I had little or no balance transfer fee. Also did this with a couple of other offers a couple of years ago. I figure I have made $1000 just borrowing their money. The banks don't like people like me!

Lots. Those S'mores ones are mighty tasty. ;)

That's a great point, and it's why your earn-burn pattern is extremely important when deciding to voluntarily buy more miles than necessary. (We are all somewhat forced to buy miles and points because, Priceline aside, they come involuntarily bundled with our airline tickets and hotel rooms, but we certainly don't need to "buy" them each and every time we use a credit card.)

With each of my major FF/hotel accounts, I know roughly what the flow is. My Starpoints live & die quickly - maybe a year, tops, on a FIFO basis. I burn 'em on 2-night Cat 2's as much as I do on 5-night Cat 4's. I'm always using them. My Marriott points live longer - 24 to 36 months - because I hoard for the bigger Travel Packages.

I have my arbitrary redemption values for both currencies, but I require a much bigger "discount" against my personal value before I'll buy a Marriott point vs. a Starpoint. I pretty sure I'm going to monetize my existing Starpoints before the program changes (and leave little on the table if a major change is announced); I don't really know that for the Marriott points, simply because of the longer lifespan.

poptarts vs. pudding
 

BTW, I presume that reaching for something with which to illustrate your points, you pulled "poptarts" out of midair. Had you chosen "pudding" for that purpose, though, it would have really resonated with MilesBuzz. A search on "pudding" will get you the details of the mythic figure (kinda like DB Cooper, though this one was entirely legal) who saw the opportunity to realize mega-miles with a promo offer for pudding and creamed it. Not many opportunities like that one, though, where one can have one's pudding and one's miles too. But this pay-your-taxes-with-credit-card promo may make the whole thing go down a little more smoothly.

State Taxes
 

What about State taxes?? any services to get points/miles?

Official Payments Corp., which I am only using as an example, says that it handles state income tax payments for 26 states. (Nine states have no personal income tax.) Their list includes the largest ones. It works the same way as paying your Federal tax bill in terms of using a credit card and adding a fee. There are other firms that offer this type of service as well. Some of them may also work with some of the 15 states that OPC doesn't cover.

double miles for state taxes?
 

But do the double miles offers (UA Visa and SPG AmEx) apply to the payment of state taxes, or only to federal ones? If there are not to be double miles for use of the card to pay, then the miles will come at a cost of 2 cpm or more, which is not too appealing, at least to me. (Are other card issuers besides UA Visa and SPG AmEx offering double miles or other special incentives to use them?)

I didn't get into that, since the question to which I responded didn't ask that.

I suspect, though I do not have specific information, that these bonuses are handled the same way most such bonuses are. Merchants are coded as to whether they're supermarkets, gas stations, or in this case third-party tax payment services. The credit card company then applies the bonus to all charges to appropriately coded merchants. If the usual method is used, and I doubt any CC issuer would have gone to the trouble of coming up with a totally new way to handle bonuses for this, then double miles offers would apply here as well.

Specific information would have to come from each CC issuer individually.

My understanding is that MP Visa results in double miles for both State and Federal taxes and SPG Amex results in double miles for Federal taxes only. I would verify this with each site.

Right, but I thought to ask it because without double miles, these deals would be half as appealing, if appealing at all, and might not make much sense (or cents). Double miles put the offers in my zone of consideration; no double miles, no interest on my part in a 2.5% fee to pay with credit card rather than by check.

But different strokes for different folks, as neurologists are wont to say. Another FTer did relate how he had bought miles at 2.5 cpm to use for an expensive international ticket and how satisfied he was with the way it worked out. So what does or doesn't work for some, will or won't work for others. The thing is to know what you are getting before you take the plunge, e.g., double miles or not for paying state taxes with a card?; a cap on how many miles can be gained this way?; etc.

MP Visa gives on State and Fed.

But "double," that is the key question. (I imagine that cards which routinely give 1 mile for $1, give 1 mile for $1 of taxes paid. Don't they?)

With UA Platinum Visa, there may be an added advantage, that being the prospect of 5K of EQM if total annual spend is >$35K. 5K of EQM that way is 5K less of BIS to achieve UA status.

You get the standard 1-point-per-dollar on the "convenience" fee. The double
points offer applies only to the $5K portion of the payment. So 10,124 should be
about right.

--ss

And double is the answer. I have no doubt I wouldn't have earned about 200K in MP Visa credit for tax payments last year if my state taxes weren't doubled :) :mad:

Stop with the tax avoidance schemes and you could have that many more frequent flyer miles.

If you can't find a way to raise your tax liability so as to collect more frequent flyer miles through these credit card deals, the federal government does have a fund to which people can, for whatever their reasons, simply contribute money that goes into the general treasury. You might explore that rather obscure possibility. For me, the ability to earn double miles by paying with a credit card is just an anodyne to ease (not eliminate) the pain of paying taxes.

These double miles promos are really just a way for airlines and hotels to sell miles/points to retail customers at wholesale prices. They'd like to sell you miles for 2.6 cpm, but sometimes they'll settle for half that.

The IRS does, however, encourage direct withdraw. No checks mailed because money is taken directly from your account. Easy for the taxpayer, too, because you can "file" your taxes in, say, March and have the payment withdrawn April 15 (or April 17 this year).

Can anyone tell me what kind of fees are involved in paying taxes by credit card and whether the fees are worth the miles? For instance, what would it cost in credit card fees to pay a $10,000 tax bill?

To help streamline the decision process, the following equation assumes you will get double miles on your entire tax payment:

P = payment
W = worth of mile

0.0249*P = W*2P, which reduces to:

0.0249 = 2W

0.01245 = W

So if you value a mile at more than 1.2 cents, charging is worth it.

A previous post valued 10,000 miles at $125. This value is very low if using SPG. I just paid 60K points for six nights at a St. Regis (12K/night plus one free). That works out to 10K/night and the rooms, with tax, were around $800.

Tax payment
 

Tax payment cost
 

Can anyone tell me how much it costs in credit card fees to pay taxes on a credit card. So you think it is worth the miles to pay the charges? As an example, what would the fees be to pay $10,000 and $15,000 in taxes by credit card -- assuming the credit card statement is paid on time and there are no late fees.

You asked the same question less than ten minutes earlier (post #60 in this thread). That's a little quick to get impatient that nobody has answered.

The answer is in lots of places in this thread already, too. See posts nos. 4, 5, 6, 12 and especially 16 above, among others.

For the official answer, as these things can change, check with the third party payment company you have in mind.

One minor adjustment -- don't forget the 1x miles one gets for charging the convenience fee.

Actually, if you work it right, you may be able to . . .

Remember, the Gummint doesn't care if you *overpay* them; they'll refund that overpayment, just without paying you interest.

With that in mind, one way to get miles "for" a refund is to arrange to overpay your taxes, then claim back the money as a refund. Example: You calculate that you will owe no tax (or will get a refund anyway) for 2005. If you can make an estimated (or advance) tax payment of $5,000 to the IRS using the Starwood card, you'd get the 10,125 Starwood points (5000 x 2 for the tax, plus 125 for the transaction fee). If you file your final return shortly thereafter and ask for the refund to be deposited directly into your bank account, it should be in the account before the bill comes from AMEX (or shortly thereafter, but usually before the bill has to be paid).

Your cost: the transaction cost (~$124.50) less any interest earned on the tax refund before you pay off your AMEX bill.

So, if you want more exactitude, instead of 0.0249*P = W*2P, which tells you that you will be paying 1.245 cents per mile obtained this way (provided there are no flat fees to be paid in addition to the percentage one), make it: 0.029*P = W*2.01245P. That will lower the cost per mile ever so slightly. (Don't have a calculator handy, but imagine it means only a couple of $s per 10K of miles.)

value of SPG points
 

If you burned 60K of SPG points to avoid paying $800, then those SPG points were worth 1.33 cents each to you. Is that a good return on SPG points, or is it possible to redeem them for substantially more value? If 1.33 cents is all one should expect to realize from SPG points, then paying taxes with the card is not a very good deal.

I suspect that Family Flyer meant $800/night. $800 in total for six nights at a St. Regis would be quite a deal.

If the room charge really was $800/night, that would work out to 8 cents per point.

Then, that is one hell of a good return on SPG points, and if that is what one can do with SPG points, then I will start putting some serious charges on the SPG card I recently got after hearing its praises sung by other FTers. There would be more opportunities for me to spend SPG points than to burn airline miles (principally UA) for returns of 8 cpm. (But did Family Flyer really mean $800 a night or $800 for 6 nights?)

I am pretty sure it is $800/night - probably the St. Regis in NY. I do not think there is a St. Regis anywhere that has a rate of $133/night including tax.

Starpoints are definately the way to go. Not only for these kinds of returns on hotel rooms, but if you do need airline miles you can transfer them.

Go to the site and it will tell you, type in the amount to pay and it will tell you the fee. For example, for double points with SPG Amex:

https://www.pay1040.com/Starwood/Terms_Starwood.aspx

Definately 800 per night

You are correct - it was per night at the St. Regis Aspen. The standard rate is about $850, $931 with tax. Prepaid rate is $650, $712 with tax.

Obviously, you aren't normally going to get an 8 cents/point return. But a SPG point - as opposed to an airline mile - can easily be valued at more than 1.2 cents.

Your advice about the return on hotel rooms is appreciated. The Starpoints are not so great, though, when transfering to UA miles, given the unfavorable conversion rate from Starpoints to that particular airline, for whatever the reason may be.

Interest rates having risen, there are opportunities to play the float that are becoming very compelling.

If you set your statement closing ("drop") date right, you get a lot of time to pay. Ask your CC provider and tell them it has to do with the day you get paid; mine changed it for me. Have your statement drop on the 14th, use the card on the 15th, and you get one month plus the grace period of about 15-25 days to get your payment in. Pay electronically on the last day or the day before.

Since home equity lines of credit (a likely source for the funds) are now charging about 6.5% annually, you are pushing 1% in float (albeit tax-deductible). That gets these deals, obviously especially the double-miles one, close to excellent.

I assume this also helps your credit score somehow; it certainly gets them to increase your CC line of credit nicely over time.

Yeah, at this moment, the Starwood AMEX is the best loyalty program for tax payments because a point is CONSERVATIVELY worth at least 2 cents. It's hard to make a case that an airline point is conservatively worth more than a penny (except perhaps to the few among us who would happily pay thousands of dollars of their own money for int'l biz class).

Given the recent inflation in hotel prices, I wish I could buy more than 10,000 Starwood points for $125. And unlike with the airlines, you generally don't have to worry about capacity controls with Starwood.

Of course this likely means that the program is "too good to be true," so I fear future reward inflation, too.

another twist when paying taxes with Chase card?
 

I am interested in various ways to game this and don't want to rule out any before knowing and understanding the details. It's certainly reasonable to time the posting of charges and later payment of them, taking into account when the statement cuts and the last day to pay so as to avoid interest, late fees, and the like, which could turn a "good" deal into a "bad" one quickly. (I don't know that the cost of home equity lines is the right benchmark here. I suppose, though, if you can get 4+% out of some bank or money mark account, 45+ days use of the money might provide sufficient interest income to produce an after tax subsidy of around .3%, bringing the finance charge on the credit card transaction down to under 2.2%, and in turn the cpm down to less than 1.1.)

Now, how about this for another wrinkle: Chase has some offer meant to protect against death, disability, job loss, etc. Just the sort of thing I immediately turn away from because I think it is one of the more exploitative schemes the credit card companies offer after they have encouraged us to pay their usurious interest charges. But there is something to this offer about payment "holidays." I haven't scrutinized it yet, but I wonder if it might be worthwhile to sign up, carry no balance for them to charge their low (yeah, right, 10% added vigorish) additional fees, and then pop in with a big charge for tax payment, getting the added deferral from one of those "holidays," then cancel the plan. (I don't have an ethical concerns when it comes to dealing with credit card companies, my only concern vis-a-vis them to be sure that they don't take advantage of me, which they would if I allowed them to.) So would be interest in "fisking" this:
https://www.chasepaymentprotector.com/learnmore.cfm

How about this offer:

http://www.gmcard.com/taxes/

Is 5% return on tax payment really true? That makes it 2.51% after convenience fee deduction.

The GM Card offers 5% "back" on everything. The catch is you can only spend it on GM cars and the amount you can redeem per car is capped.