You're probably thinking of this position the IRS took with respect to miles earned on business travel but used for personal trips.

http://www.irs.gov/pub/irs-irbs/irb02-10.pdf

The bottom line is that although one could reasonably argue that miles earned on business trips are a form of wages paid to employees, the IRS has decided that it would be impractical to treat them as income. Thus, the miles come to the business traveller free of tax liability, even if later used for personal travel.

For the reasons discussed above, the IRS appears to agree that the convenience fee for tax payments is a deductible business expense to the extent that such payments relate to the tax liability of the business. I would interpret that to include the portion of one's 1040 balance due or estimated tax payments that relates to a trade or business (e.g., Schedule C).

To the extent the payment covers personal, non-business tax liability, the convenience fee is not deductible: "The IRS does not receive or charge any fees for payments. Additionally, the IRS cannot pay or reimburse any convenience fee to taxpayers. The fee is a non-deductible personal expense; however, it is a deductible business expense."

http://www.irs.gov/efile/article/0,,id=101316,00.html

If anyone relies on the above, and you end up owing the IRS a bunch of money, I'll refund everything you paid me for this analysis.

FWIW, I agree with all that you say. One ought not try to deduct the credit card fees for payments of "personal" personal tax obligations, but should be able to do so where "business" tax obligations are involved?

While the fees are not deductible with "personal" payments, the miles come no strings attached. When the fees are deductible because the payments are for "business" taxes, are the miles that come with those transactions without any strings attached too, so they can be used however one wishes, including for vacation travel? I expect the latter miles are also without strings because why should they be any different from redeemable miles earned through business travel and other uses of the credit card to pay business expenses, but that doesn't seem quite so certain to me.

If one owns a business that makes substantial tax payments, then they may have the opportunity to buy a substantial number of miles at as little as .75 cpm net after taxes, a damn good price. But do ask your accountant.

Maybe in 2007 more of them shall offer this.

Did AAdvantage MC Offer Double Miles?
 

I spoke to Citicards yesterday to ask for an extension of the double mileage offer from April for the payment of taxes through officialpayments.com.

They told me that there was never an offer of double miles.

They asked me to produce any proof of such an offer and implied that if I can, they will extend it.

Any idea of what's going on here?

Was there an AAdvantage Master Card double mileage offer?

If so, can anyone get me proof?

Many thanks!

I was the one who received double miles on my AA card for my tax payment. HOWEVER - I recently got this month's statement posted, and I had double miles on that one as well!

Since it was my first time using my AA Mastercard, I had assumed the double miles were specifically from the tax payment. Now it seems that all my miles are being double, although I have no idea why. I don't remember signing up for any specific promos, and no one else has mentioned it in the AA forum.

You are indeed one lucky guy.

I've seen the past discussions of double miles on tax payments using a Citi AA card, and I think people have confused this with the UA and *wood promos. I don't think there ever was a promo offered to the general public for tax payments made with a Citi AA card (other than the reduction in the convenience fee).

I'm sure someone will correct me if I'm wrong.

Regarding the Delta business AmEx card:

You have successfully enrolled. You can earn double miles on all eligible purchases from June 1 - August 31, 2006. So be sure to use your Card for all of your purchases.

To learn more about other great offers, visit www.americanexpress.com/deltaoffers.

Thank you for your continued Cardmembership.

The fine print indicates a maximum bonus through this offer of 20,000 miles. So, if you have the DL Amex business card, this can give you 2x miles for your upcoming estimated tax payment (or any other charges).

Has anyone received their double miles bonus from tax payments on their Starwood AmEx?? I have not received mine yet, and we paid our taxes on April 15th.

check this thread out:
http://www.flyertalk.com/forum/showthread.php?t=563080

Mine haven't posted yet either.

no problems paying taxes with UA Visa, right?
 

I think it a good deal to get UA miles at 1.245 cpm, but not at 2.49 cpm. I think I got all that I was due from my use of the card for that purpose back in April, including the extra measure of EQM for going for >$35K. No one has had any problem with this, that is not gotten all the RDM they were entitled to, have they? I am about to do it again for 6/15/06 tax payments. (Was this "double miles" for tax payment deal with the UA Visa around in previous years?)

Also, any definitive answer to the AA miles with Citibank question? Was there never an offer of bonus AA miles for paying taxes with the Citibank card, in particular double miles for a 1.99% "convenience fee"? That was just misinformation? (I don't have that card or collect AA miles, but did think about looking into this possibility, if indeed it ever was a possibility.)

And will someone please shout out when they see bonus miles post to their SPG accounts.

When one clicks on this link, they are told that the offer is now expired, so cannot see the details anymore. I had assumed that this one for paying taxes with the Citibank AAdvantage Mastercard was like the one for the UA Visa, giving double miles for the added "vigorish" or "convenience fee," and was even a bit better at 1.99% rather than 2.49%. But maybe I assumed double miles for the AA card like for the UA card, when in fact there was no such offer. (If that is true, then the UA offer is even more special, since nothing to rival it.)

Yes, my bonus posted to my account the following month after making the payment, on 4/14/2006.

I just made a payment because I needed a quick 2000 points to top off a hotel award, at 2 points/$.

Yeah, yeah, I know all about poor ratios and all that, but I needed the points quickly and it costs a lot less than a couple of hotel stays.

You say you "needed a quick 2000 points to top off a hotel award, at 2 points/$." Are you speaking about a payment made with the SPG card, and are you expecting 2 points per $1 of taxes paid and 2.49 cents of "convenience fee" per $1? If so, I think you may be disappointed because if I am not wrong that "double miles" offer for up to a $5K spend on taxes ended 4/17/06, and all you will see now is 1 point per $1 of taxes and 2.49 cents of "convenience fee."

Credit card for tax payments = ripoff
 

OK I am an IRS employee in my day job as a contact rep on the biz hotline ...

so here's my .02

USING CARDS TO PAY YOUR TAXES IS A RIPOFF IF YOU WANT MILES!

At least if the tax payment sites want more than 2.5 per cent to give your credit limits to your uncle :mad:

Most airlines SELL their miles for less than .03 per mile. Research your airline, research your tax payment site, do the math, and watch your mind get blown!

And for small employers, the temptation to use CC to get FF miles can be LETHAL! The tax payment sites themselves warn their systems are not for payroll deposits, because even in their moneygrubbing hearts they know it's suicide for those guys to use CC cards to get more FF miles!

And the businessmen and women scream to high heaven when I parrot the tax payment site line!

If you would read the previous posts in this thread, you would see that is about the opportunity to buy miles/point at less than 1.245 cents each. Official Payments collects 2.49% "vigorish" ("convenience fee"), but SPG AmEx and UA Visa were giving "double miles" for use of their cards to make these tax payments. At 1.245 cents per UA mile or SPG point, I don't think it a ripoff at all.

No comment on the value. But got mine today (UA double) two months after I paid the extentsion...promptly cancelled the card...time for a new 20,000 miles. Cheers to all... ^

5000 SPG points posted 6/29 ^ ^

Mine posted 6/29 as well! ^ :D :)

cincypix:

Sorry - but you are wrong. I got 5,000 + 5,000 (bonus... today) = 10,000 Starpoints for $124.50 .. That is 1.245 cent/point.I can exchange this to airmiles and get 25% (20,000P = 25.000M),
AND: You can receive (another) 30% more BA Miles when you transfer your hotel points to BA Miles between April 20 and July 20, 2006.
http://www.britishairways.com/travel...ct=RD_HOTELPTM

Even with Starwood it's a good deal: I pay $124.50 for a nice hotel, which would have cost $200+...OK, I don't get points for that night, but I kept $5,000 for another month 'in my pocket'

I'll agree with you - to a point! :rolleyes: (I am an ex-IRS tax auditor! :eek: )

I agree that at 2.5%, it does not make sense to pay for your tax bill with plastic. But at the times that the credit card companies (such as with the UA Visa) offer double miles, the cost is esentially $0.0125/mile! :D That is the only time I use plastic for the IRS!

I just had a $25+K bill that yielded over 51,000 miles. The cost was $522 or ~$0.0103/mile! :cool:

Although it cost a few miles more, it felt good to get a trip to Asia for paying your IRS bill! :D

Earlier in this thread, there is a post stating that you could charge an additional $5k to your wife's card in addition to your personal card. There was a suggestion that this would net an overall 10k Star Point bonus (instead of the 5k bonus for just your card).

I did this and have only received the 5k bonus for my card...anyone been able to score the 10k bonus? Is there a way to appeal this lack of bonus for the wife's card (which is linked to my Starwood point account and I receive Starwood Points for her other charges).

It seems by 07 even more receipients of taxes, etc will accept them.

If your wife is an authorized user on your card, then you can't get an additional 5K bonus. It only works if each of you is the primary owner of a Starwood AIX car.

I appreciate the sentiment and in general your point is spot on. But for double Starpoints where I know I have a near-term redemption need at a real value between 3 and 4 cents per point, I will happily run my tax payment through Amex to buy the points for 1.3-ish cents apiece. It's an easy win for me.

Would I run a massive tax payment through on my Amex, buying a huge pool of Starpoints at 2.5 cents each? Probably not - I'd have to be pretty darn certain I had a near-term redemption for a trip I absolutely needed to take where no other hotel options were available. But I only owed the Man around $6k this year, so it was an easy call to do it for the Double Points promo.

Well, cincypix, a month later, several folks have posted the research they have done (don't underestimate FT'ers ability to do the math around points), and we've yet to hear back from you. I've redeemed SPG points at 4-8 cents each over the last year and also feel that buying points this way, at about 1.25 cents each, is a valuable approach.

Do you still feel THIS IS A RIPOFF? If so, please reply to the points raised.

And so did mine!

I've read through the thread and I didn't see anything explicit regarding this subject, so let me pose the question here:

For those of you who are doing quarterly payments, which ("good") offers are still open? From what I can tell:
- MP Visa is still doing double bonus through 12/31/06 on federal/state/local
- SPG and Delta AmEx are no longer doing any bonus

For what it's worth, I did my June payment on the Juniper US MC. I figured that 1.5x bonus was better than nothing, and that (with an extra 1.5 month's worth of interest in HSBC online savings) gets me down to around 1.4 CPM. However, I'm considering getting the MP Visa for the double bonus (taxes add up quick!)

It's probably too late for this quarter for you, but the Amex Delta business card I have keeps having "double bonus on everything" offers. The bonuses require an online signup.

If you pay a 2.49% "convenience fee" and realize "double miles" for it, then you are paying 1.245 cents per mile purchased this way, right? (If you aren't getting "double miles," only the usual 1 mile/$1 charged, then you are paying 2.49 cpm.) If instead of 2 miles/$1 charged, you get 1.5 miles with the Juniper MC, ought it not come out to 4/3 x 1.245 cpm, or 1.66 cpm or thereabouts? An extra 1.5 months of interest may bring the net cost down a bit more (1.4 cpm?), but that interest income is presumably taxable, so not as sweet as might first appear.

I think that my offline, pen-and-paper analysis leading up to the 1.4 CPM number was fundamentally the same as what you wrote above, with the exception that I forgot to include the tax liability on the interest income (oops!), so maybe push that a bit higher. The numbers definitely look a lot nicer when you're talking about double miles though.

It's a tiny bit better than that, since you're also getting the standard 1 mile per dollar on the "convenience fee" portion of the payment.

Right. Since to satisfy a tax obligation of $100 one pays $102.49 and realizes 202.49 miles in the end, not 200.00 miles. I don't have a calculator at hand to say how much less than 1.245 cpm one spends to purchases miles this way, but it is "a tiny bit better." A greater sweetener for me than that small extra yield from the "convenience fee" portion, though, is the ability to get past $35K with the Platinum Visa with this "essential" expenditure and realize 5K of EQM as an added benefit beyond the basic (RDM) mileage one. That is how 1K-lite happens. ;)

0.98 cents per RDM
 

$2.49/202.49m = 1.23 cpm. If you're doing this with Starwood, and end up converting the points to airline miles with the 25% bonus for the 20k transfer, it works out to 0.98 cents per airline mile, which is pretty good. I personally value Starpoints at more than 1.25 air miles, so I'd keep them with SPG.

If you also figure that you can invest that money for an extra 45 days or so (billing cycle plus grace period), say you can get 4% net of taxes (not too hard nowadays), that's 0.5% over the 45 days, which would make the cost in the equation above $1.99 instead of $2.49 (so 0.98 cpp and 0.79 cpm).

I did the Starwood AmEx deal, as well as the UA Visa one. But I believe the former was capped at a total $5K payment, while there was no cap on the latter. Also, IIRC, the former was only good for 4/15/06 payments to the IRS(2005 fed taxes), whereas the latter is there for tax payments of various sort through 12/31/06. So the Starwood deal was a good one, but couldn't get that much of it and no EQM possibilities in it.

Others give Starpoints a somewhat higher relative value to them over air miles, which themselves vary in value depending on the particular carrier, and it should be noted that Starpoints don't convert at that same favorable rate to all carriers equally (UA).

45 days from charge to payment due date is about the very best that one can do, and all the stars must be alignment to get that much "free" time (i.e., date when tax payment due, date when statement cuts, and grace period for credit card payment). I'm not sure what highly liquid investments presently yield 4% after all taxes (>6 or 7% pre-tax?), but not impossible.

I have used Official Payments to pay taxes with my United Visa several times now and have been quite pleased. Something seems to have gone wrong with my quarterly IRS payment last week, however, and I can't get anyone on the phone at any of the numbers they list, only "automated" responses. I am some kind of p.o.'ed. There are substantial sums of money involved and I expect to talk to a live person, not a recording so my questions can be answered.

Anyone else have problems with Official Payments? (The double miles offer is on until at least the end of the year, and I intend to keep banging it, that is unless Official Payments does not perform satisfactorily, e.g., doesn't answer phones.)

In the phone tree, try the option for payment over $100,000, or whatever the large number is. I think that will get you a human.

Thanks. I had the same thought, but it didn't work. Not good, especially for a company which would handle large payments. I do seem to recall speaking to a rep months ago when I called, but can't get around, through, over, etc. the automated answers now, when I do need to speak to them ASAP.

Push 4.