Is This A Smart Way To Pay Uncle Sam & The Governor?
Tax Day is 41 days away (April 18th this year). Some will get refunded a portion of the free loan they gave the government. Others will be scrambling at the 11th hour to come up with cash to pay The Man, man.
Whatever your situation, making your payment(s) via three IRS Approved websites can be very profitable! Yes, make money paying your taxes.
Pay1040, OfficialPayments and PayUSATax allow you to pay personal and business taxes by credit or debit card. All three accept Federal tax payments. OfficialPayments accepts State as well as Fed. You might think paying the fee to do this is a waste of money vs. writing a check. Pay1040 charges the least to use a credit card (1.87%). For every $1,000 paid in taxes, they take another $18.70 scoop in convenience fees.
But… here are 5 Ways using a credit card can be a GOOD (and profitable) idea:
- Paying taxes this way is not a cash advance. So if you are tapped out, but know you are going to have money to cover it later, you could slap it on a card that has a 0% introductory interest rate up to 21 months. Then pay the card off when you have the cash. Consider Citi Simplicity (21 months), BankAmericard (18 billing cycles), Chase Slate (15 months), Chase Freedom (15 months), Wells Fargo Platinum (15 months), Discover it (14 months), American Express Blue Cash Everyday (12 months), Citi Thank You Preferred (12 months), and Chase Ink Business Cash (12 months).
>>> At the top right side of this site, under “Chip’s Favorite Credit Card Offers” click “O”% APR Credit Cards” for up-to-date info on these cards. Email me any questions. <<<
- If you have a credit card that pays you 2% cash back (Citi DoubleCash & Capital One Spark Business), you’d actually profit $1.30 per $1,000 paid. Under “Chip’s Favorite Credit Card Offers” click “Cash Back Credit Cards”
- Using a card might be worth it for the convenience and knowing the payment got there. The IRS considers it paid when you charge the payment.
- You can make partial payments on more than one card. This is handy in case you have different airline, hotel and rewards cards. This way you could top off those accounts to get to the next level for a free flights, hotel stays, and what-have-you. Delta, American and Alaska will give new cardmembers 30,000 bonus miles if you spend $1,000 on their respective card in the first 3 months. Southwest and United have 50,000 mile bonuses for $2,000 and $3,000 spending requirements respectively. You could get rack up some nice bonus mileage for an $18.70 fee. Under “Chip’s Favorite Credit Card Offers” click “Travel Rewards Credit Cards”
- You can pay someone else’s taxes with your card. Maybe you need to meet a big spending requirement to get a sweet, tax-free credit card bonus. Some of my personal favorites: Chase Sapphire, Ink Bold, and Ink Plus come to mind. With those cards, it would be worth paying someone’s taxes + the convenience fee. They write you a check for what they owed the IRS. You eat the $18.70 convenience fee per $1,000 in tax.
Look under “Chip’s Favorite Credit Card Offers” at the top right side of this website for up-to-date deals, terms, and conditions on these cards and more. Email me if you have any questions about which card might be right for your situation.
If your brain is firing with possibilities, here’s a nice scenario to haul in hundreds in tax-free cash. Right now (3/9/17) with Chase Sapphire Preferred’s personal credit card sign-up bonus, you can earn 50,000 bonus points when you spend $4,000 on purchases (and/or tax payments) in the first 3 months from account opening. You get an additional 5,000 bonus points if you add an authorized user and make a purchase in that first 3 months. Those 55,000 bonus points alone can be redeemed for $550 in tax free cash. Plus you’d get 4,000 more points, redeemable for $40, for spending $4,000. Just like that, you have points redeemable for $590 in tax free rebate cash!
If you used Pay1040 to pay $4,000 in taxes, they’d tack on $74.80 in fees. You’d meet the Sapphire spending requirement instantly. You’d still be ahead of the game $475.00 – tax free! That’s a pretty good reason to use a credit card to pay your taxes.
You don’t have to use any of these cards to pay your taxes. I suggest using them to pay your taxes as a way to quickly meet the spending requirement for the huge bonuses. You could get the cards and meet the spending requirements for the bonuses however you’d like!
Thank you for clicking on links under “Chip’s Favorite Credit Card Offers” at the top right side of this website for up-to-date deals, terms, and conditions on these cards and more. I appreciate it! Not only will that ensure you get the correct offer, but we may get a referral credit from approvals. That support helps keep the 1s and 0s spinning around cyberspace bringing great Chip’s Money Tips to you!! Many graciases. Email me if you have any questions about which card might be right for your situation.