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.