You might not like paying taxes, but when you pay taxes via credit card can be quite rewarding. The key is to earn credit card rewards that more than offset tax payment fees. For example, if you’ve signed up recently for a card that requires large spend to get a big welcome bonus, paying taxes via credit card can be the solution.
Here’s everything you need to know about paying taxes with credit cards…
Important due dates
2023 Tax Year Due Dates
- January 16, 2023: 4th quarter 2022 estimated taxes due.
(Payable online from 10/15/22 – 2/1/2023) - April 17, 2023: End of year taxes due for 2022.
- April 18th, 2023: 1st Quarter 2023 estimated taxes due.
(Payable online from 3/1/2023 – 5/15/2023) - June 15th, 2023: 2nd Quarter 2023 estimated taxes due.
(Payable online from 5/15/2023 – 7/15/2023) - September 15th, 2023: 3rd Quarter 2023 estimated taxes due.
(Payable online from 7/15/2023 – 10/15/2023) - January 16th, 2024: 4th Quarter 2023 estimated taxes due.
(Payable online from 10/15/23 – 2/1/24)
Deals
Current Deals
- Peruse best credit card welcome offers here.
- Simon Mall has been offering near-weekly discounts on fees for bulk orders of $1K gift cards. You can see the current (or most recent) deal here.
Future Deals
- TBD
5 reasons to pay federal taxes with a credit card or gift card
1. Profit w/ a 3% Cash Back card
A number of credit cards earn cash rewards greater than 2%. Some even earn 3% cash back:
- The new/updated Paypal Mastercard will earn 3% cash back on all PayPal purchases. Details here. This approach will work only with the services that allow payment through PayPal.
- The Discover It Miles card earns 3% for the first year of card membership (you earn 1.5% and then at the end of the year all cash back earned is doubled).
Since you’ll earn 3% cash back on both the base tax payment and the processing fees with the above cards, your profit will be slightly more than 1% of your tax payment.
Example:
- $10,000 tax payment + 1.96% fee = $10,196
- Cash back earned at 3% = $305.88
- Profit = $305.88 – $196 = $109.88 (1.1% of $10K)
For more examples of cards that earn better than 2% rewards, see: Best Rewards for Everyday Spend.
2. Meet minimum spend requirements
If you recently signed up for new credit cards, chances are good that you have to spend thousands of dollars in order to earn the associated signup bonuses. Paying taxes is a cheap and easy way to accomplish that.
Below are some of the most valuable current welcome bonuses for consumer cards. If you’re interested in business cards, please click here to see the best business card offers.
Click on a card for details; Press “Next” to see more offers:
Card Offer
![](http://cdn.nextinsure.com/imaging/opt/73e79a4a-2cdd-4bf0-abd8-fd194139ebae.png?w=300" alt="Capital One Venture X Rewards Credit Card" />){kind=small}
![](http://cdn.nextinsure.com/imaging/opt/534df778-fadf-4350-9e01-291110eaf2a9.png?w=300" alt="Capital One SavorOne Cash Rewards Credit Card" />){kind=small}
3. Buy points cheaply
Several credit cards offer up to 1.5 transferable points or miles per dollar. In these cases, a 2% tax payment fee (rounding up a little) means that you can essentially buy miles for 1.3 cents each. Even better, some cards earn 2 transferable points per dollar for all qualifying purchases. With these 2X everywhere cards you can essentially buy points/miles for 1 cent each. Either way, if you plan to use your points toward high value awards, this is a cheap way to acquire those points.
2X Example:
- $10,000 tax payment + 2% fee = $10,200
- Miles earned at 2X = 20,400
- Cost per mile = $200 / 20,400 = 0.98 cents per mile (round up to 1 cent per mile)
1.5X Example:
- $10,000 tax payment + 2% fee = $10,200
- Miles earned at 1.5X = 15,300
- Cost per mile = $200 / 15,300 = 1.3 cents per mile
Cards that offer 2X transferable points per dollar:
Note that some cards offering 2x everywhere are not included below because their points are worth much less than airline miles. An example is that most Marriott cards offer 2x everywhere rewards.
- Citi Double Cash: Earns 2 cents per dollar, uncapped. Cash rewards can be converted to ThankYou points, and when paired with a Citi Premier or Prestige card, those points can be transferred to a selection of airline and hotel programs.
Card Offer and Details - Amex Blue Business Plus: Earns 2 Membership Rewards points per dollar on up to $50K spend per calendar year. Points can be transferred to a large selection of airline programs or to a few hotel programs.
Card Offer and Details - Capital One Venture, Venture X, or Spark Miles. Capital One offers three cards that earn 2X “Miles” per dollar on all qualifying spend. These “miles” can be transferred to airline miles & hotel points, usually at a 1 to 1 rate. This means that the following cards are capable of earning 2X miles everywhere:
Card Offer and Details
Cards that offer 1.5X points or airline miles per dollar:
- Chase Ultimate Rewards. Two no-fee cards in Chase’s lineup earn 1.5 Ultimate Rewards points per dollar for all spend. Pair either one with a premium card (e.g. Sapphire Reserve, Sapphire Preferred, Ink Business Preferred) to transfer points to several airline or hotel programs:
Card Offer and Details - Amex Membership Rewards. Amex offers two cards that are capable of earning up to 1.5X. In either case, points can be transferred to a large selection of airline programs or to a few hotel programs. Note that the Everyday Preferred card requires 30 charges per billing cycle to earn 1.5x, and the Business Platinum card requires purchases of $5K or more to earn 1.5x when paying taxes.
Card Offer and Details - Airline miles. A few airline branded cards offer 1.5 miles per dollar for all spend:
Card Offer and Details
4. Earn valuable big spend bonuses: elite status, free nights, companion pass, etc.
Many credit cards offer bonuses for meeting high spend thresholds. You can find a comprehensive list here: Best big spend bonuses. Here are a few examples:
- Amex Delta Reserve or Delta Reserve Business: Spend $30,000, get 15,000 Medallion Qualifying Miles (towards elite status). At $60,000, $90,000, and $120,000 you’ll get another 15,000 Medallion Qualifying Miles.
- Amex Delta Platinum or Delta Platinum Business: Spend $25,000, get 10,000 Medallion Qualifying Miles (towards elite status). At $50,000 spend, get another 10,000 Medallion Qualifying Miles.
- Southwest Plus, Southwest Premier, or Southwest Business: With Southwest, when you earn 125,000 points in a calendar year (including points earned from credit card spend) you get a companion pass good for an unlimited number of flights for the rest of that year and all of the next calendar year.
- Barclaycard JetBlue Plus, or JetBlue Business: Spend $50,000 and get Mosaic status which offers free changes and cancellations; free checked bags; expedited security; early boarding; free drinks; enhanced point earnings; and 15,000 bonus points upon qualifying.
5. Liquidate Visa/MasterCard gift cards cheaply
Visa and MasterCard gift cards are debit cards. As such, they qualify for low flat fees for debit tax payments: $2.20, $2.50, or $2.55 (depending upon the tax processor you use). In other words, your cost to liquidate $500 gift cards will be approximately half a percent. That’s pretty cheap.
If you use $500 Visa/MasterCard gift cards, then you can pay the following amounts:
- PayUSAtax.com ($2.20 fee): Make a $497.45 payment with a $500 gift card.
- What is known to work:
- What sometimes works:
- Vanilla brand Mastercard gift cards sometimes work with PayUSAtax and sometimes do not. The ability to pay with these Mastercard gift cards through PayUSAtax seems to come and go.
- What is known to not work:
- Vanilla brand Visa gift cards are not recognized as debit cards at PayUSAtax.com and so they will incur the higher credit card processing fee.
- Metabank issued Mastercard gift cards are reportedly not working at PayUSAtax (Reported again on 5/26/21 by Dokus).
- Pay1040.com ($2.50 fee): Make a $497.50 payment with a $500 gift card.
- What is known to work:
- Metabank issued Visa gift cards (including from Simon Mall) appear to be working again. Reported by Rosco in October 2021. But Vince reports otherwise in November 2021. YMMV.
- Metabank issued Mastercard gift cards are working as debit cards. Reported by StepheH. Reported again on 5/26/21 by Dokus.
- Sunrise Visa working as debit at Pay1040.
- Vanilla brand Mastercard gift cards work at Pay1040. Reported by Yue.
- What is known to work:
- ACI Payments (Previously named “Official Payments”) ($2.20 fee): Make a $497.80 payment with a $500 gift card.
- What is known to work:
- Metabank issued Visa gift cards (including from Simon Mall) appear to be working (note though that this seems to come and go over time). Vince reported problems with Simon gift cards in November 2021. YMMV.
- Vanilla brand Visa gift cards work at ACI
- What is known to work:
The biggest problem with this (besides the fact that what works and what doesn’t work keeps changing!) is the IRS imposed 2 payments per processor limit. This means that you can liquidate no more than 6 gift cards per type of tax payment. In the past, Official Payments allowed more.
See also: Best options for buying Visa and MasterCard gift cards.
How to pay taxes via credit card: Key Information
Here is key information you’ll need to know about paying taxes with credit or debit cards:
Credit card fee 1.85% to 1.98%
The IRS maintains a list of companies that accept credit and debit cards towards tax payments. You can find the current information by clicking here. Currently there are three separate payment processing companies on the list. At the time of this writing, debit card fees range from $2.20 to $2.50 per transaction and credit card fees range from 1.85% to 1.98%. Alternatively, you can pay taxes via the Plastiq Bill Pay service, but that will cost you more: 2.85%.
Additional Info Direct from the IRS
The IRS page that lists options for paying by credit or debit card also lists the following “Additional Information”:
- No part of the card service fee goes to IRS.
- You don’t need to send in a voucher if you pay by card.
- Card processing fees are tax deductible for business taxes.
- You must contact the card processor to cancel a card payment.
- IRS will refund any overpayment unless you owe a debt on your account.
[Editor’s caution: In recent years the IRS has been very slow to do so] - Your card statement will list your payment as “United States Treasury Tax Payment” and your fee as “Tax Payment Convenience Fee” or something similar.
- Federal tax lien releases can take up to 30 days after we receive full payment; liens may remain for other individuals who haven’t fully paid their portion.
- When you pay while filing your taxes through online software, different card fees apply.
Two payment limit per processor
The IRS maintains a table of frequency limits for paying taxes via credit or debit card (found here). In general, they say you can make up to two payments per tax period per type of tax payment. For example, you can make 2 payments every quarter to your quarterly estimated taxes, and you can make 2 payments every year to your annual taxes. Important: In my experience, these limits are enforced per payment processing company. That means that you can really make up to 6 payments per tax period per type of tax payment (or more if you make Plastiq bill payments as well). An IRS advisor I spoke with several years ago did not think that there would be any problem with making more than 2 payments by using different processors. Since then, I have made more than 2 payments per tax period many times and never had any issues. That is, of course, just my own personal experience. I can’t guarantee that your outcome would be the same.
Twice as many potential payments when filing jointly
If you file jointly with a partner, you can make payments in each person’s name, separately. These payments will still apply to the one overall tax return, but not always automatically. According to reader reports, in some cases the IRS matches these payments to the combined return automatically. In other cases, people have reported the need to call the IRS to ask them to combine the payments. I recommend calling shortly after filing your annual taxes to ensure that the IRS has correctly applied both sets of payments to the same return.
Obviously if you are filing separately, you can each make your own payments without any issues.
Unlimited payments via Plastiq
If you’re willing to incur higher fees, you can make an unlimited number of tax payments via the Plastiq bill pay service. Plastiq usually charges 2.85% to pay bills (including taxes) via credit card, but they occasionally offer lower fees via short term promotions. For details, please see: Plastiq Bill Payment Service.
To pay taxes via Plastiq, use Plastiq’s tax payment screen: plastiq.com/us-taxes.
Pay with Paypal
Both ACI Payments and PayUSATax allow payments via PayPal. Sometimes cards like the Discover It, Discover It Student, and Chase Freedom offer 5% rewards for Paypal purchases (up to $1500 combined spend per quarter). Tax payments during these times should count!
NOTE: There is a weird issue with selecting to pay with PayPal on the PayUSATax website. When clicking the PayPal button, a screen flashes up and disappears. Here is a work-around that has worked for some people, but not all: Put in valid credit card information first (for any credit card) and then press the PayPal button. When doing it this way, I got the PayPal screen to successfully load.
Pay with Samsung Pay & Google Pay
Some tax payment websites support mobile wallet payments such as Samsung Pay or Google Pay. The US Bank Altitude Reserve card earns 3X for mobile wallet payments, so it should be a great match. However, readers have reported that Samsung Pay and Google Pay are only supported through Visa Checkout and that this does not trigger the Altitude’s 3X rewards.
Frequently Asked Questions
Will I be charged a cash advance fee when paying taxes with a credit card?
I’m often asked whether credit card companies charge cash advance fees when paying taxes by credit card. The answer is no. All three official IRS payment processors agree (via their FAQ pages) that the payment is treated as a purchase not a cash advance. You can find FAQ info here, here, and here.
Are tax payment fees deductible?
Fees are no longer deductible for personal taxes: Tax preparation fees used to be deductible when itemizing deductions for personal tax returns, but that is no longer the case.
Card processing fees are tax deductible for business taxes: This can substantially reduce your net cost of using payment services.
How can I see my tax payment history online?
Once you’ve made payments through online processors, Plastiq, or other means, you may want to see proof that the IRS received the amount you sent. You can view past payments by signing up here: irs.gov/payments/view-your-tax-account.
When should I report estimated tax payments?
Estimated payments should be reported when filing your annual taxes. In my experience, if you make a mistake and forget to report some of these payments, the IRS will eventually catch the error and refund the difference.
How should I pay end of year taxes?
Tell your tax preparer or tax software that you’ll pay via check. Then, browse to the appropriate tax payment site (e.g. Pay1040.com, OfficialPayments.com, PayUSAtax.com, or Plastiq.com/us-taxes) to pay your taxes. There is no need to mail in the 1040V payment voucher.
What happens if I over-pay my taxes?
Overpayments will be refunded: The IRS will refund any overpayment unless you owe a debt on your account. Update/Caution: In recent years the IRS has been very slow to refund overpayments.
How do I request a refund if it doesn’t come automatically?
Schedule an appointment with the Taxpayer Assistance Center by calling 844-545-5640. When you finally speak to an agent, explain that you overpaid and would like a refund rather than applying the extra to next year’s taxes. Hat Tip: Rapid Travel Chai via personal communication.
Do I need to mail in payment vouchers?
No. No payment voucher is required. You don’t need to send in a voucher if you pay by card.
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I just paid my individual federal tax through pay USA using my consumer amex platinum and chase ink business cash card but they don’t accept chase business card. I am wondering because I do have small business and card is associated with TIN/EIN with my business. GA DOL does not accept it either (through ACI). I was hoping to be able to use business card for paying my individual tax but …however I have not tried paying my payrol tax through my business. Just wondering if anyone else experienced this or is it common knowkedge this would happen?
The section “Liquidate Visa/MasterCard gift cards cheaply” has data points that are from 2021…probably time to update those
My new chase INK will work $6k it’s property Tax time 5/1..ALOHA
So I pay quarterly estimated taxes, but I did not use a credit card for that. I am currently working on my personal tax return, and I am estimated to receive a refund and not owe anything. Two questions related to this:
1) Can I still pay money towards my taxes as a part of my tax return even though I am estimated to get a refund?
2) If I overpay now, would it be counted towards my 2023 tax payment (and thus not receive the refund/have to float the cash) until next year? Or would it count towards 2022 and I would just receive the refund once my tax return is processed?
Thanks.
1) Yes
2) I’m not sure. Anyone know?
1) Yes
2) Yes …MAKE SURE u pay the Right Slot to get ur Refund for 2022 Fed or State..TELL ur CPA too.
2A) Tell ur CPA what amount u want Back and or What u want put forward for 2023 before he Files it..
C) or Pay for First 1/4 2023 and get it Next year..
SAVE EVERYTHING FOREVER !!!
Done All of the above many Times !!!
V. Bernie
Do the processors give you a form to include when filing your taxes that states how much you paid? Or do you just need to keep track of it yourself and check the IRS website that your payment posted?
No, they don’t give you a form.
I’ve read that Paceline is shutting down.
Thanks for the reminder. I removed that example.
Vanilla visa gc from metabank stopped working at both pay1040 and officialpayments today. It worked a week ago.
Just had a Vanilla Visa work at ACI (Official Payments) for 1040ES.
Hoping the community can verify if I have my facts correct.
Wife and I are MFJ and owe federal taxes for 2022. There’s currently a giftcards.com deal for 6 $250 gc which I would like to use for both P1 and P2 (so 12 total gift cards to max out the 5% discount).
My understanding is if I can pay twice with the three payment processors per person that would be 6 payments each, 12 in total between wife and I if we make payments under our own name (and should go to the same 2022 return for MFJ.
Am I understanding this correctly? TIA
That’s correct but I can’t promise that all three processors will be able to handle those virtual gift cards correctly. Does anyone have recent experience trying to use those for tax payments?
Vanilla MCGC does not work in Payusatax today. It says that the billing zip code is not correct. But there is no way to set the zip code in Vanilla’s website or phone. I remember that it worked In Jan. I use the same card in ACI successfully.
ditto experience yesterday…except Vanilla VISA card (Sutton Bank) – same zip code issue.
Used ACI instead – works. $500 gift card. FIrst time paying with gift cards.
Nice to read about Greg’s experience with 2 per payment processor, not 2 per year. Saw also on The Frugal Tourist article.
How long does it take for payments to show up on the IRS website?
Says CHECK or MONEY ORDER – up to 3 weeks….but payments by DEBIT card?
Vanilla VGC doesn’t work either, same zip code issue.
Is there still issue to pay estimated tax with Chase Ink if not going through PayPal? Is there any recent DP of using Amex to pay estimated tax to satisfy Amex SUB? Thanks!
my dp: success using Amex to pay estimated tax to satisfy Amex SUB
Thank you for the dp. Can you share which vendor did you choose? Pay1040? ACI? PayUSAtax? Did you pay directly or link to PayPal first? Thanks
Payusatax. Pay directly. Amex biz platinum.
How are people able to make payments after Jan 17 (i.e. when Q4 estimated taxes are due) and then claim 1-2 months later.
I don’t quite understand the maneuvering re: Form 4868 payments
PayUSAtax still allows you to pay 2022 taxes via credit card I just did it today. It does not seem to accept any of my Chase VISA cards now, but my AMEX Bus Plat was fine.
Has anyone tried using the American Express Business Checking debit card? Pays .5 points per dollar spent, seems too easy? The daily limit is $5,000 but you could break that up across all the processors over a week or so.
The more expensive ACI payments worked, obviously.
Getting this error on payUSATax with two different Ink cards:
Anyone know what’s going on? Seems like a glitch but it’s strange nonetheless.
Also had similar error on the Pay 1040 website. No issue with my cards to my knowledge. Tried on Firefox and Safari.
May just try again tomorrow?
I ran into the same issue on payUSAtax with my Chase Ink Business Unlimited. I got it to work by paying via PayPal (same credit card).
Great tip, thank you. I was also getting the error multiple times. PayPal all good!
Thanks for the tip! I am having the same issue
Seems not only the Ink cards but my Hyatt Business card as well today.
Just wanted to confirm that this will trigger the Chase SUB
Two questions relating to the 6 x Form 4868 payments that can now be made:
Can someone confirm that I don’t actually need to file Form 4868, and that I just need to make a payment via one of the 3 processors?If yes to the above, do I just enter any rough estimate of my total tax liability for 2022 (Line 4)?Thanks!
Yes to both. paying = filing the form and just need a rough estimate
Under the tax due dates at the top, it says that the taxes due January 16, 2023 are payable online from 10/15/22 – 12/31/22. Is this an error, or why would this be the case? This is unlike the other due dates. Why can’t you pay the taxes due January 16th in January by the 16th? If you make an online payment in early January, is the payment late? Or is it simply not possible?
Sorry I should have fixed that a while ago. That wasn’t right.
I’m having trouble with the logistical details.
Hypothetically, let’s say my federal withholding is around $110k per year. (22.5k per quarter).
So if i stop the withholding and pay the IRS with my credit card. Each quarter i’d have to pay around (22.5/6 = ) $3.75k per payment or $7.5k per processor per quarter.
But the maximum each gift card could be is ~$500. That means I would have to eat the 2% fee with high spend bonus cards like amex biz plat NLL to pay my taxes.
At that payment rate ($22k per quarter). I’m concerned that I can’t get enough NLL amex biz plats to cover my taxes for the year… Is that a legit concern?
I think you are confusing credit cards and debit/gift cards.
When you make a payment to a processor, it can be for any amount. The reason people make multiple debit card payments is because they are using gift cards with limited amounts on them.
So, if I want to pay $6,000 using Simon Gift cards, I have to make six separate payments of $1,000 each (since you can’t get a Simon gift card with more than $1,000 on it).
On the other hand, if I’m using a credit card, I could make a single, one-time, $6,000 payment on any credit card and that’s all I would need to do.
FEES USING DEBIT CARDS TO PAY $6,000: If you made six $1,000 payments with Simon gift cards, the fees would be: (1) the cost of buying the cards from Simon, maybe $30 with a discount code or $50 without, plus (2) the cost of paying your taxes with a debit card, which is $2.20 per payment, in this case 6x$2.20 or about $13. So, $30 + $13 = $43.
FEE USING CREDIT CARDS TO PAY $6,000: In this case, you would simply pay just under 2%, or $120.
So, in your case, if you have a credit card that has a $22,000 credit limit, you could pay your quarterly taxes with one payment on that card and pay a fee of about $440.
If you wanted your fees to be lower, you could go through the hassle of buying $1,000 gift cards, but you could only make six payments per quarter up to $1,000 each, as two payments at each of the three payment processors, or $6,000 total. If you have a spouse, you could each pay $6,000. Either way, you couldn’t use this method to pay the full $22,000 each quarter. But you would save a lot on fees for whatever you paid with a debit card (vs. a credit card).
Hope that helps. I suggest going back and re-reading this entire article in full, as they do a great job of laying it all out.
Thank you so much for the reply. I think we are on the same page. I just didn’t know that the max per gift card is $1k.
Let me rephrase my questions:
1. Since one person can have 6 payments per quarter, that gives me the ability to pay $12k in gift cards. But I would need to pay $23k. So the most fee-optimal way would be to pay $11k in gift cards (fee of about ~$100) and pay the last $12k with a credit card. But I would have to eat the 2% fee on the $12k, which is $240. I believe I understood this correctly? No?
2. To optimize the points return on the $23k tax bill per quarter, I would have to get around 2-3/3 credit card sign up bonuses. (Otherwise I’m losing money as most cards only give you 1 point per dollar spent). Assuming I’m not buying gift cards with Amex, the easiest way would be have 2 chase inks to buy the gift cards and have 1 NLL Amex plat biz for the rest of the $12k. That’s 3 big credit cards just to cover my taxes alone per quarter or 12 credit cards just to cover taxes. I’m worried about the velocity of getting 20 credit cards (additional cards with SUBs for daily spend) with big SUBs, specially as I’d have to be targeted for the NLL amex plat biz. I have never had such high velocity in getting this many credit cards. Is this not a big concern?
Also I’d be kinda concerned about chase shutting me down because I’m buying so many gift cards with inks. Is this not another concern at this scale?
The max per gift card is $1,000 only because you can’t obtain a gift card with more funds on it than that (as far as I know). In fact, you can pay as much as you want with a debit/gift card. For example, if you have a debit card tied to a checking account, you could make as large a tax payment as you wanted and pay only the $2.20 fee. But doing that doesn’t help you in the points-and-miles game. (I so wish that Simon would sell $10K gift cards, or allow one to combine balances on multiple cards, as that would make all of this easier and lower fees dramatically)
Regarding your questions:
Yeah unfortunately the 2% fee is a high hurdle to get through. I might start withholding again, this just feels like a lot of time for not enough return on time and investment.
Forgot to mention: another approach is to reduce rather than eliminate your withholding. So, if you reduce your withholding by just $12K per quarter, you could do the gift card thing on that amount. Might make your task more manageable.
Another point: I like loading up a lot of this into the first quarter, for several reasons. First, you can make triple the number of payments with each processor (another Q4 payment, which I just learned about via someone on these comments; 4868 payments; and regular 2022 payments). Second, I get that money back fairly quickly via my refund, which means that I’m not losing much interest by locking up money with the IRS.
I assume that there is no problem in filing for an extension with a Form 4868 even though you will file before April 15? By regular 2022 payment, is this the amount that is due with the return? How will these payments be shown on the Form 1040 if there is no amount due but rather an overpayment?
Correct, no problem asking for an extension and then not using it.
Yes, the amount due with the return.
Just enter the payments you’ve made; don’t worry about whether or not they are “overpayments” because you really won’t know until you calculate what your tax bill is for the year. There are places on the 1040 (or TurboTax or wherever) where you specify your payments (via withholding, credit card, with form 4868, or various other payment options).
Once you’ve calculated your taxes on the 1040 and entered all your various payments, you will then calculate either how much tax is still owed (if payments made < tax) or your refund (if payments made > tax).
Thanks. Have you previously filed returns making all of these different payment types? I am still unclear where the regular 2022 payments go on the 1040. I don’t see any line that is appropriate. I believe that these are actually intended to be used for payments made after the return has been prepared and the tax due is determined. So if you make these payments earlier, I see no place to put them. I do see the appropriate lines for all of the other payment types that you mention.
OK, I see your point of confusion. I went back and looked at my 2021 forms, and TurboTax lumped those regular 2021 payments together with my estimated (1040-ES) payments. I have no idea if I did it right, but my refund came surprisingly quickly last year.
I guess the “right” way to do it is to not make those regular 1040 payments UNTIL you’ve calculated how much you owe, and using that to guide you in how much to pay via credit/debit card (which is the point you are making). In that approach, you aren’t recording that payment at all on your return, but the amount due on the return is what you end up paying. Similar to sending in a check with your return, but paying the amount due via credit/debit instead.
This is an awesome tip! Thank you!
ISn’t INK card linked to PayPal zero fees?
works with county taxes no fees not sure about ˆRS.
“I ran into the same issue on payUSAtax with my Chase Ink Business Unlimited. I got it to work by paying via PayPal (same credit card).”
Having problems with Pay1040 and PayUSATax, two services I’ve used before with no issues. Here’s the relevant info:
So are there are there new limitations on paying personal taxes with a business credit card?
I’m seeing the same issue trying to pay estimate tax on Pay1040 and PayUSATax using the Chase Ink Unlimited (business) card. Haven’t tried using a personal card.
Were you able to successfully pay using your Chase Ink card? Thank you.
Same issue, tried to pay personal taxes with Chase ink cash business card, Unsuccessful.
Ugh. Same. And was counting on this toward SUB. Pay1040.com and payUSAtax
Also not working for Chase World of Hyatt Business.
Just tried with my Business Ink Unlimited and it didn’t work. Says, error due to technical difficulties.
I’m also getting this same issue on both pay1040 and payusatax
Update: Successfully made a payment with a business American Express card.
So perhaps it’s only an issue with Chase business cards.
I was also able to use a business AMEX on payusatax without issues but the Chase Ink Business Unlimited seems to not work. I called and spoke to pay1040 and they weren’t aware of any issues with specific cards so they couldn’t help. I did find a workaround though, I used Paypal instead and was able to pay through Paypal with the Chase Business Unlimited.
Both pay1040 and payusatax are blocking Chase business cards. I was able work around payUSAtax by going through Paypal. That is a recent development since they worked as recently as Q3 for me.
Can you please elaborate how to pay the estimated taxes via paypal? Thank you.
Paypal is one of the payment method choices. I just choose Paypal and added my Business Unlimited to my Paypal and selected that card. It’s pretty straight forward unless you haven’t used Paypal prior
I had a $497.80 Vanilla payment on ACI fail on 12/31. Same combination had worked earlier in December. Now the card shows a pending charge so I’m hoping to just run it again once the pending charge drops off, but would be interested in hearing any other recent DP’s for that combination.
In order to take advantage of the %5 bonus for PayPal with my chase Freedom cards in 4th quarter 2022, I made estimated tax payments with both ACI and payUSAtax in December and had no issues with either.
Greg–think I made this comment in past years, but do you have any data points that you can’t pay estimated federal taxes from January 1-15 using a credit card? You wrote: “January 16, 2023: 4th quarter 2022 estimated taxes due. (Payable online from 10/15/22 – 12/31/22). I have been doing this every year for many years. Just for fun , I tried making a payment using Pay1040 just now (I choose that service because of Rocco’s comment below that he didn’t think it would work) and it went through just fine. Also, it was my third payment of 4Q estimated taxes using a credit card, which is also another data point validating two payments per processor and not two per quarter. Hope these data points help1
“you can really make up to 6 payments per tax period per type of tax payment” I need to add a warning to this.
I made 6 payments (2 each processor) a couple of years ago in the first quarter. After that, I was unable to make any payments using all three companies (they all said I was over the limit of payments) until the 4th quarter. It was if I pulled the 2nd & 3rd quarter payment allotments forward. So, the 2 online payment company limit was exactly how it worked for me. As Greg says in the article, it could be highly YMMV.
(note that I am only talking about myself and not using an EIN or a spouse to get a higher payment allotment.)
Metabank MC gift card debit work for a 2022 1040-ES payment today on PayUSATax with a $2.20 fee.
ACI and PayUSATax usually allow 2 additional 1040-ES payments for the prior year (2022 in this case), even after maxing out ES payments in Q4. My attempt today work on PayUSATax but was rejected at ACI (and Pay1040). I will have to try ACI again in a few days.
Metabank Visa gift card debit also worked for a 2022 1040-ES payment today on PayUSATax with a $2.20 fee.
Interesting to know that additional Q4 ES payments might be possible. I guess I missed that tidbit!
Something weird might be going on with ACI today because I made two 4898 payments, followed by an attempt at a regular 2022 tax payment. The latter was rejected with an error message that I had already made two of those regular 2022 tax payments, which wasn’t true. I should be able to make two 4898 and two regular 2022 payments, but at the moment ACI isn’t allowing that. I assume it’s a beginning-of-the-year glitch.
I copied the following information on personal federal tax credit/debit card payments from a website (not this one?) into my notes. I’ve found it to be accurate (with slight date changes) in prior years – we’ll see if it continues to hold for the “bonus” 2022 ES payments at ACI this year.
You can make a total of 40 online payments per tax year:
1) 28 payments using the Form 1040-ES for 5 periods:
– 03/01/20 – 05/14/20
– 05/15/20 – 07/14/20
– 07/15/20 – 10/14/20
– 10/15/20 – 12/31/20
– 01/01/21 – 01/31/21 (available on PayUSAtax and ACI Payments only)
2) 6 payments using the Form 1040 before the deadline 04/15/21.
3) 6 payments using the Form 4868 before the deadline 04/15/21.
Rosco–just tried using Pay1040.com today for 4Q2022 taxes and no issue.
Interesting data point @DSK – I was unable to replicate it. I tried to make my third Q4/2022 ES payment (two prior payments made 10/15/22) at Pay1040 yesterday and today – both failed with a Maximum Payments Exceeded message on each attempt. My third and fourth Q4/2022 ES payments succeeded at PayUSATax on Jan. 1 and at ACI on Jan. 2 (attempts failed @ ACI on Jan. 1).
Not sure how large your payment was, but I put $14,725 on Surpass which, with the fee, was just enough to get my annual Hilton free night certificate–went through with no problem (actually, it failed the first time because I probably typed my credit card information in incorrectly, but worked a minute later). Now, I can safely return Surpass to its rightful place in the sock drawer. Perhaps there is some maximum payment amount with Pay1040.com that you aren’t allowed to exceed which isn’t published. Several years ago, I think several of the processors had a $10K limit online (they would take a higher amount over the phone), but I’m pretty sure that has been lifted.
Metabank MC and Metabank Visa debit gift cards both worked today for 2022 1040-ES payments on ACI with a $2.20 fee.
On January 1 & 2, 2023, Metabank Visa and Metabank MC debit gift cards worked for me at each of PayUSATax, ACI, and Pay1040. I used them to make either 1040-ES or 4868 payments (9 in total). I didn’t use any Vanilla debit gift cards this time around.
Sorry for the multiple posts, but I like to keep my records and public ones current on the prepaid debit card payment methods that work at the federal payment processors.
In case it matters to anyone, I just noticed that PayUSATax dropped their fees to 1.85% for credit cards (minimum $2.69) and $2.20 for debit (was $2.55). This makes them the lowest price for credit cards and tied for the lowest for debit cards.
Also, options to pay 2022 taxes via two other methods are now available: (1) Regular 2022 tax payments (not 1040-ES), and (2) 4868 (extension to file). Payments for 1040-ES for 2022 are still available but probably not for long.
How much overpayment is too much compared to total taxes due?
I’m not aware of any limit other than your own ability to float the loan to the IRS
I’m mostly worried about getting audited if my refund is in the tens of thousands. Nothing to hide but it would be a hassle.
PayUSAtax won’t accept a SecureSpend prepaid Visa, issued by Metabank – says that the zipcode doesn’t match. Anyone else having this problem? I’m sure I’ve used these before and not had a problem.
You probably have to register it first. I have a detailed posting on that (related to cards from Simon, but it likely applies to other cards as well) in this thread.
I don’t think there’s a way to register these specific prepaid cards. There’s nowhere on the page to do so.
I’ve been buying these SecureSpend prepaid Visa cards and using them on all three sites – payUSAtax, pay1040 and ACI and don’t think I’ve ever had an issue before yesterday/today. I’ve already used up my 2 quarterly instalments on the other sites so can’t try those.
I was hit with the $10 Cash Advance fee for my September payment. I had never used ACI before but i decided to try it for the slightly lower fee. I saw the $10 extra charge when I got my statement and I was annoyed, but it was to small for me to worry about, I thought it was just their policy and I wouldn’t use them again.
Today I got an e-mail from Paypal apologizing for the erroneous charge (even though it wasn’t they who charged it). and they said they will credit the $10 back to my account.
Anyone tried to pay tax through Paypal on ACI or PayUSA in the last week or so? Did you get charged the cash advance fee? Thanks.
I just used Chase Freedom via Paypal on Sunday Dec 18 to pay $1500 ($1471.17 toward tax and the rest for fees) at PayUSA and was not charged a cash-advance fee.
Unfortunately when I try to do a 2nd payment with my other Freedom, it is erroring out and not letting me pay. I am going to try to figure it out, but I can always switch to ACI if needed (and just pay a bit more in fees).
Nevermind on that 2nd comment. Apparently I made a different payment on Oct 08 via PayUSA so I hit my limit of 2/quarter.
Anyone else not have their payment code 5x for Chase Freedom family but the separate fee did code with 5x?
BofA offering 2x extra points on Nov 5th this year. 3x Alaska miles is a good deal here.
I have property taxes coming up in a few days. If I were to put them on a credit card with welcome bonus (say chase ink cash or personal Amex platinum), will they count as part of the minimum spend? I saw some individuals discussing here that some did not have success with paying federal taxes, so curious what everyone’s experiences are with property taxes for those two cards?
Works Perfect for Me on Min spend or debit my checking so I Don’t have to Go ..Just got the WH discount @ 65 last year then 6% for this year..Debit is no fee CC I THINK 2%..
I would be 100% comfortable doing so. I think that some people have been caught in situations where for some reason the automated system didn’t award the welcome bonus and so agents were searching for a reason and erroneously explained it as being due to tax payments not counting. They absolutely should.
Perfect way to meet the Min spend on any new card. Prepay any bill then put every spend on the card. After 2.5 months pay some Taxes as Done u get the points $$$$.
A Zillion times as in Simple to do…
CHEERs
I filed late like a month ago and I got Fed in 3 weeks just like when I filed on time. No state refund yet but usually 4 weeks+..
CHEERs
Greg, I have tried, with no success, to ascertain why the two processors charge their credit-card rate on business debit cards (Nearside is a business debit card).
I would like to understand the argument of the two processors as to why they feel justified in doing this. Do merchants get charged a higher interchange fee for business debit cards versus consumer debit cards? If so that would be a somewhat acceptable answer.
In any case, these three processors struck a contractual deal with the IRS to collect and remit these payments. If that deal calls for the processors to accept all debit cards at their advertised rate they are in violation. Obviously none of us knows the terms of the deal, and good luck getting anyone at the IRS to explain or even appreciate this issue.
I’ve complained to the National Consumer Affairs Department and received no response
It is maybe more important than most people appreciate. For those who need to make large payments, each $20,000 payment results in >$400 savings when using a 2%+ card such as Nearside. Thats’s $3,200+ of potential cashback each quarter (8 payments for a married couple) that is not able to be utilized due to the restriction by the two processors.
Do you have any ideas as to who to contact? You have more of a voice than most of us. Please, lead the charge in finding out if the processors are justified in treating these debit cards differently. Many of us would be grateful.
Thank you
I don’t know the answers to your questions, but on the IRS site Pay1040 does explicitly state that the rates are only for consumer debit: “ *Example fee amounts in this column (“Debit Fee” for Pay1040) are for consumer or personal debit cards. For all other debit cards, see the amounts in the “Credit Fee” column under Pay1040.”
So I’m pretty sure that the only result we could get out of pushing this question is to get a similar disclaimer published for the other processors.
Two other ideas not mentioned by Greg that I haven’t tried yet so no idea if or how well they will work:
(1) If I pay up to $5000 of estimated taxes (including fees) on the first of each month (other than February) on Bilt, I will earn 2x Hyatt points (which beats 1x on the Hyatt card and 1.5x on Freedom Unlimited).
(2) I think the new AMEX debit card will earn 0.5 Membership Rewards points per dollar and the maximum transaction can be up to $5000. So, I would earn 2500 MR points at a cost of $2.20 per transaction, as opposed to 7500 Ultimate Rewards points (or 10,000 Cap One points or 10,000 Thank You points) at a cost of $93.50 per transaction. Depending on how you value points vs. cash or the different currencies, the debit card could come out ahead.
1. Right! Need to add this to the post. Thanks for the reminder.
2. I’m sure that the payment processors wouldn’t recognize the Amex card as a debit card so you would have to pay credit card rates. I’d love for someone to prove me wrong though.
Data point–used ACI with Paypal on my Freedom card on October 19. No cash advance fee–everything posted as normal. Read over DofC after I saw this post, and it sounds like it is kind of a mess out there as far as whether payments will be treated as a cash advance or not (some had the same experience as I did–others were coded as a cash advance). Also I did receive 5x points. However, now that I’ve done it once, having seen other people’s experiences, I’m not sure I’d do it again.
If you pay via Paypal on PayUSATax with the Paypal MC do you get 3% back?
Why would you expect to get 3%?
Strike that, meant to say 1%, and to see if it made sense to pay taxes with it. On a 10K tax payment the rewards are $100 less the flat debit card fee. Better than the $0 I get for eCheck payment. Or am I missing something.
Has anyone tried making two estimated tax payments for processor, total 6 payments, for Q4 2022? For some reason Pay1040 and ACI are telling me I have exceeded the number of payments allowed by IRS even though I haven’t done any Q4 payments yet.