Can we return this thread to the topic as was 1st posted???

Hi all,

I stumbled up on FlyerTalk a few weeks ago, been reading through it day and night since, and went from not even having a frequent flyer account to booking 4 Fri-Sun MR's over the next 2 months (missing work was not an option for my situation) which will give me EXP with DBEQM on AA... I guess what I'm trying to say is, I haven't been on this forum a long time but I've been learning quickly and want to thank everyone. There is a lot of great information here.

Anyway, to my question. I apologize if this has been covered before, but I haven't seen it addressed in what I've been reading so far: suppose I want to make estimated tax payments for 2009 using my AMEX SPG card, and assume that the value of the starpoints, TO ME in my situation, is worth more than the 2.49% cc charge. I understand that in many cases for many people this may not actually be the case, but assume that for me right now it is the case. Two questions:

1. If the credit limit on my SPG card is lower than the payment I need to make, then will the method that somebody suggested above work: first making a payment on the cc (bringing the balance to a negative number, i.e. a credit) and then charging the amount. It should work in theory, but does anybody know for sure if it actually works OK in practice, even with very large amounts, hypothetically say on the order of a few hundred thousand dollars?

2. In the case of estimated payments, since the assumption is that the starpoints are worth more than 2.49% cc charge for me, is there anything stopping me from doing the following: make an arbitrarily large estimated payment for the 1/15/2010 date, which will then get refunded to me by the IRS 3 months later. Assuming that my personal liquidity / solvency during this period isn't an issue, and hypothetically assuming that even counting the 3 months of interest opportunity cost that the value of the starpoints are worth it to me, is there anything illegal about this / other costs that I am missing?

3. Hypothetically, if somebody racked up >$250k annual spending on their AMEX using the above method, and then contacted AMEX for the centurion card, will they be considered just like anybody else who charged the same amount via non-tax charges? i.e. When AMEX is reviewing your spending for qualification for centurion, do they care what type of charges it is, perhaps reasoning, "Most of his charges were from taxes this year, he did it just to qualify, he's never going to spend this much again"? Whether the centurion is worth $5k+$2.5k/year is a separate discussion, I'm just wondering hypothetically if one WOULD qualify by the above.


Thank you everyone!

Apply for a new SPG Amex with the 15,000 point bonus for $15,000 in charges in the 1st 3 months.

Have you filed your 2008 return yet?
If not, make a large extention payment with your SPG Amex and then immediately file your return showing the large overpayment and get your refund electronically deposited to your bank account.

I did this and the $ was in my bank over a month before my Amex payment was due.

I don't think you can pay beyond your credit limit, at least online.

My tax bill was higher than my SkyMiles Amex. So I paid it in two chunks, charting up to the credit limit for the first, then paying that balance off online, then charging again.

Tried transferring more than the Amex balance at the time (from my bank) in order to have extra credit but the Amex site doesn't let you.

bigbootch, welcome to FlyerTalk!

Hard for me to imagine that SPG can be worth more than a smidgeon greater than 2.49 cpp after the big devaluation in early 2007, but if that works for you, then it does. (What use do you make of your SPG that you would pay 2.49 cpp for it?)

Can't give you the various answers you are seeking, but I would suggest caution here for several reasons, including the relatively limited upsight when the pay off is miles or points from card use, and the downside might be problems with the credit card issuer and your credit if things mess up, as they can, especially when you hope to do something out of the ordinary. Official Payments will advise people who want to make large tax payments by means of their credit cards how to go about it, and I think you would be well advised to speak to them directly in order to navigate it. (You may never get through their menus to speak to a live person, so you should go online to find their corporate headquarters in TN and try to get to them that way.) There are some pitfalls that they can steer you away from (e.g., my understanding is that because of agreement with IRS, Official Payments can't let you break you transaction up into a number of smaller ones).

I personally value SPG points at $0.04 each. As such, I pay my taxes using Official Payments, and even buy the maximum amount of SPG points allowed per year at $0.035 each. As to how I use them, I transfer them to AA and redeem them for int'l premium cabin air travel.

It's something similar to that for me as well - specifically, my situation is that for an elaborate & extended international trip that I'm planning, and the hotels that I would like to stay at in each city, using the starpoints saves me significantly more than 2.5cpm. In this particular case it actually is "money saved", because if I do not have the starpoints then I will actually pay the cash for these rooms, as opposed to just going to a different hotel or whatever. I know that I will not rack up nearly enough starpoints for this through my normal spending, so I was trying to think if I could take advantage of paying taxes...

itsme, your point is well taken about the limited upside vs. very significant downsides to this. I will def talk to both Official Payments as well as AMEX about this. But the question re: qualifying for the centurion, I'm not sure the AMEX person would tell me?? :confused:

I have done your plan for 3 years now with no effect from IRS. Like you, I think of it as buying miles for 2.5c rather than 3.5 c / mile. It also gets me bonus miles and EQMs. 50k on Delta Amex costs 1245. Gives me 70k miles total with 20k EQM. cost of card = 145/yr = 1400 total for 70k miles = 2c / mile. Gold Amex does give bonus, so you can transfer to Alaska or Continental for 2c/mile. A pity that SPG does not give EQM or bonus miles.

Amex will only consider you after 250k in Charge Card use.
Somehow they do not consider credit card use!
Last year I split 250k in 2 Delta for 40 EQM and the rest in Amex Gold.
I got a letter thanking me for my high use of 150k and pointing out that the average small business user uses only 47k / yr and upgrading me to a "Premium" agent when i call for customer service, whatever that means.
I guess that even though I had 250k total, they only counted 150k in charge card use.

My concern would not be IRS or other tax authorities, who just want to see the money, 100 cents on the dollar. My concern would be that all go smoothly with OfficialPayments and the credit card company, especially the latter, so that I wouldn't be screwed when trying any maneuver to exceed my credit limit, break a big payment until multiple smaller ones, prepay the credit card company so as to overcome the credit limit issue, etc. While one can be entirely on the up and up, it is possible to run into "money laundering" and other traps unwittingly and have headaches one doesn't want, fees one didn't expect, etc., for miles or other advantage that aren't worth it if things don't go smoothly. (I was surprised to discover a couple of years ago that I couldn't just make multiple "installment" payments, learning from OfficialPayments that for whatever reason IRS required them to block more than one payment per Social Security number. Also, while I have without problem split payments toward our joint return between my wife and me using our respective SSNs for two rather than just one payment, I think that might invite some screw up.)

My point is not to discourage anyone from taking advantage of these opportunities, especially the double mile/points promos to the extent they allow (be aware of the caps), but to advise checking it all out if you plan to try anything other than a plain vanilla approach.

A business class reward ticket on Star Alliance with 4 allowed stopovers in China for a mere 105,000 using ANA is worth way more than $.0249 / point. Just a round trip on ANA discounted business would cost $4,500 ish throw in the three stop overs all in business and you will get up to $.06 $.07 range.

In my experiences, tax payments will most definitely count toward Centurion qualification.

This is not true. Charge card as well as credit card use in combination is considered for Centurion qualification, regardless of what Platinum customer service tells you.

The problem in your situation is that you had a split between small business and personal cards (at least I'm inferring this is the case based on the letter you got). You need $250K spend and payments on any combination of personal charge and/or credit cards to qualify for a personal Centurion, or $250K spend and payments on any combination of business charge and/or credit cards to qualify for a business Centurion.

I don't dispute you that when used for premium class international awards, miles can bring the highest redemption values, greater than $.0249. (A couple of years ago, before the big devaluation, I think it was 120K UA for an F ticket to OZ, when asking the .bomb would get one a >$18K fare. My wife and I flew upfront on F awards then, and not only did I enjoy flying that long haul in F, I also greatly relished the return per mile.) But for various reasons, I and many others don't think that a reliable way to set the value of miles for ourselves, viewing it as an overstatement thereof. So, I will take as much UA as I can get at $.01245 cpm, which is what they come to with the double miles promo (actually a tad less in cpm, since the "convenience fee" folds in too), and the added benefit to me of getting closer to a $35K spend for the year and the 5K EQM that brings using a Platinum Visa card.

I made my tax payments at officialpayments.com with my Platinum Sky Miles Amex as two separate transaction, several days apart.

My account on the Amex site shows two payments to the US Treasury.

So I assume my payments are good.

Now, just have to make sure I'm getting miles for those charges as well as having those charges count towards the MQM bonuses for $25k spending levels.

You will not have any problems.
Think of it as getting not only miles but also elite status for the same price.