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-   -   Tax Payment Bonus Thread (https://www.flyertalk.com/forum/milesbuzz/527045-tax-payment-bonus-thread.html)

itsme Feb 19, 2006 1:27 pm

poptarts vs. pudding
 

Originally Posted by biggestbopper
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...

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.

FFSaver Feb 21, 2006 7:23 am

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

Efrem Feb 21, 2006 9:23 am


Originally Posted by FFSaver
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.

itsme Feb 21, 2006 11:01 am

double miles for state taxes?
 

Originally Posted by Efrem
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.

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?)

Efrem Feb 21, 2006 1:39 pm


Originally Posted by itsme
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.

ned Feb 21, 2006 6:50 pm

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.

itsme Feb 21, 2006 10:39 pm


Originally Posted by Efrem
I didn't get into that, since the question to which I responded didn't ask that.
...
Specific information would have to come from each CC issuer individually.

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.

Eastbay1K Feb 21, 2006 10:40 pm


Originally Posted by ned
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.

MP Visa gives on State and Fed.

itsme Feb 21, 2006 10:57 pm


Originally Posted by Eastbay1K
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.

ss Feb 23, 2006 9:46 pm


Originally Posted by itsme
Does the processing fee fold in, so that one would wind up with a total of 10,124 SPG points (or 10,249?) for paying $5K in taxes with the card?

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

Eastbay1K Feb 23, 2006 10:42 pm


Originally Posted by itsme
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?)

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:

itsme Feb 24, 2006 8:47 am


Originally Posted by Eastbay1K
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.

dhuey Feb 25, 2006 4:46 am

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.

Family flyer Feb 25, 2006 6:50 am


Originally Posted by pinniped
In a way, I'm kind of surprised that the IRS doesn't encourage credit card use. It seems like they would save on both labor and the risks inherent with paper checks, collections, etc. if they just accepted plastic directly.

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).

luvtoscrab Feb 25, 2006 7:33 am


Originally Posted by itsme
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?)

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?


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