Earn Points Paying Taxes with a Credit Card (+ Latest Deals/News)

Credit Cards

Chris Hutchins explores the intriguing possibility of using credit cards to pay taxes, a method that can earn points and miles. He highlights three IRS-approved payment processors: payUSAtax, Pay1040, and ACI Payments, each with fees ranging from 1.82% to 1.98% 1. Chris notes that while these fees are lower than typical credit card processing fees, the key is to ensure the points earned outweigh the costs 2. He emphasizes the potential benefits, stating, "You can pay your taxes on a credit card directly at three sites that the IRS allows, probably more" 3.

   

Bonus Tactics

Using tax payments to meet credit card bonus thresholds is a strategic move discussed by Chris. He suggests leveraging tax payments to hit spending requirements for lucrative welcome bonuses, such as the Hilton Aspire card's 175,000-point offer 4. This approach can be particularly beneficial for those who struggle to meet high spending thresholds through regular expenses 5. Chris explains, "If you now all of a sudden could put the six, seven, $8,000 I need to hit a welcome bonus on a tax payment, pay a few hundred dollars in fees and get points I never would have had otherwise" 6.

   

Profit Analysis

Chris analyzes the profitability of using credit cards for tax payments, focusing on rewards and cashback. He explains that while a 3% cashback card can yield a profit, the decision depends on the amount owed and the credit limit available 7. For instance, paying $10,000 in taxes with a 3% card could net $118 after fees, but larger sums could be more lucrative 2. Chris advises caution, noting, "If you are thinking, ooh, I'll overpay my tax payment by $50,000 this year so I could earn some points first" 2.