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This is just a quick note before the tax filing deadline: A reader reported via FlyerTalk that you can pay your taxes with Visa gift cards purchased from Office Depot. I reported recently that you can earn 5 points per dollar by buying these gift cards (see Almost too good to be true), so it’s possible to do really well paying your taxes this way!
Here are the instructions that were posted on FlyerTalk. Note that I have not confirmed this:
1. Go to office depot and buy $500 visa debit cards with Ink card (5 points per $1). Fee $4.95. HT to frequentmiler.com
2. Add your zip code online.
3. Call 1-888-9-PAY-TAXtm (did not work for me online @ payUSAtax.com) and pay $3.49 fee per transaction.
4. You can do 2 transactions a day. Tom. by noon (per them)considered before deadline.
So, each card fee of $8.44 ($4.95 plus fee of $3.49) = 2500 UR points
They said that IRS will sent automatically check for overpayment, but I would not go wild with it for obvious reasons.
I’ll post a more thorough discussion of paying taxes with gift cards in the future. For now, here are a few other references:
- Reader Request: Earning Miles & Points on a $1.4 Million Tax Bill? By Million Mile Secrets
- Does it Make Sense to Pay Taxes With a Credit Card? By ThePointsGuy
- Tax Day – Can I pay with a credit card? By DeltaPoints
- See the IRS rate sheet here.
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I was hoping to pay my state taxes with this route but you can only pay state taxes for Alabama, New York and Kansas (not NJ) oh well!
I was able to pay a portion of my tax liability online using two Visa gift cards, one each in two separate transactions. It looks like you’re limited to two transaction per year. That is an IRS limit, not one from the processor. The transactions went through as debit so the fees were a flat $3.95 per card. Going forward, I hope do two transaction each quarter to pay my estimated taxes (allow by IRS). Also, I am trying to find out if my wife can also do two payments each quarter since we file jointly. All told, this would allow me 8 transactions plus two more for year end. If my wife can do this also we could do 20 transactions together each year. This would cost 20 X $3.95 (debit fee) plus 20 X $4.95 (card fee) for a total of $178. We would use new ink bold cards to buy the Visa gift cards and we would net 20 x 2500 ultimate rewards points or 100,000 points. 100,000 points for 178 bucks. Seem a good return if I’m doing my math right. Does this look right to you FM? It’s less than $500 per month for each of us on the cards so it’s pretty modest use of Visa purchases on the cards. I wish I could figure out a way to more do since I will more tax liability than I can cover through this method.
Piecerate: Yes, your math looks right. It’s a great plan!
Do you think if I make maximum 250k points on office depot cards on Ink it might get some negative attention from Chase?
al613: There’s no way to know for sure. My guess is that you would be safe if you spread it out over the year and also put lots of other spend on AND you have a very high credit limit (e.g. low utilization ratio).
In case your readers haven’t heard, Ink Bold spend requirement will be going up, lol. Kudos for you for recycling more useful Ink info today. Funny thing about the increased spend requirement, my only problem with Ink is trying to avoid putting too much spend on it, grin. Wish the $500 GCs had been around when I was paying my property tax bill. Even with a 2-3% processing fee, I’d still come out ahead vs. paying by check. That said, second half is due in November. I’m hoping OfficeMax starts selling these so I can leverage more spend on my DL reserve.
HikerT: I’m right there with you! It’s so tempting now to put all spend on the Ink that it will be hard to keep spending up on the Amex cards. I almost asked the OfficeMax manager the other day about stocking $500 cards…
FM, can you use multiple gift cards in a single transaction? Say 4 or 5? Thx.
I can confirm that this works as I recently used some Visa gift cards from Office Depot to pay my taxes online at payUSAtax.com. I did not have to call.
I was pleasantly surprised when it allowed me to process the gift cards as debit cards with the $3.49 transaction fee instead of the 1.89% credit card fee.
The total fees ended up slightly cheaper than by using my credit card directly with payUSAtax.com AND I will be getting 5 points per dollar.
The Ink Bold keeps on giving.
I paid my tax bill yesterday – $10k (ouch) – but all with Chase AARP. Fee was $189 which will be deductible for me next year, cash back will be $500, so that softens the blow of the tax bill itself!
Phil: Yes, the AARP card is a great way to go!
Elizabeth: Thanks for the info. That’s great that it worked online!
Piecerate: I don’t think so. I think you’re limited to 2 (I haven’t tried it myself yet)