Travel on Points

Earning Points & Miles by Paying Taxes (2022 Edition)

Nothing in life is certain, except death, taxes, and earning credit card rewards with your tax bill. You read that right: turn lemons into lemonade. If you owe federal taxes (or think you might), now is the time to open a new credit card and hit a minimum spend with that tax bill!
Travel on Point(s) has partnered with CardRatings for our coverage of credit card products. Travel on Point(s) and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

Earning Points & Miles by Paying Taxes (2022 Edition)

Nothing in life is certain, except death, taxes, and earning credit card rewards with your tax bill. You read that right: turn lemons into lemonade. If you owe federal taxes (or think you might), now is the time to open a new credit card and hit a minimum spend with that tax bill!

Travel on Point(s) has partnered with CardRatings for our coverage of credit card products. Travel on Point(s) and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

Nothing in life is certain, except death, taxes, and earning credit card rewards with your tax bill. You read that right: turn lemons into lemonade. If you owe federal taxes (or think you might), now is the time to open a new credit card and hit a minimum spend with that tax bill! Using the right card can make this otherwise undesirable time of year a joyous occasion.

Paying Taxes with a Credit Card

Official Tax Payment Processors for 2022.
There are three official websites that accept credit cards for your federal tax bill:
  1. www.payusatax.com accepts Amex, Discover, Mastercard and Visa for a fee of 1.96%.
  2. www.pay1040.com accepts Amex, Discover, Mastercard and Visa for a fee of 1.87%.
  3. fed.acipayonline.com accepts Amex, Discover, Mastercard and Visa for a fee of 1.98%.
Of these, #2 is the best, as it has lowered it's fee by 0.12% since last year!

Best Credit Cards for Tax Bills

The best card for any bill is the card you're working on a minimum spend for a sign-up bonus or opening a new card to hit another sign-up bonus. Always check our monthly recommendations for the best sign up bonuses here. However, if you need to take a break from opening new cards, you're in a time crunch, or you can't get a new card for whatever reason, we have you covered. Here are our recommended cards for paying taxes and earning rewards that outweigh the 1.87%+ fees:
  1. Citi Double Cash: You earn 2% cash back with this card (1% when you make a charge and 1% when you pay it off). This is earning a profit of 0.13% when paying your taxes, which is nothing to write home about. However, if you have a Citi Premier or Citi Prestige, you can covert the cash back to ThankYou Points (worth over 1.8 cents each) for 2x earnings on your tax bill. This allows you to “buy” Citi ThankYou Points for 0.935 cents each, which is well below their value! Details: this card has no sign-up bonus, but also does not have an annual fee and there are no limits on 2x earnings. You can read our review here.
  2. Amex Blue Business Plus: You earn 2 Amex Membership Rewards points per dollar spent, up to $50,000 per year. Afterwards, it is 1x for any additional spend. This allows you to “buy” MRs at 0.95 cents each, which is an instant profit with an Amex Charles Schwab Platinum card (which allows you to cash our MRs at 1.10 cents per point). Amex MRs are worth over 2.0 cents per point, so you earn over 4.0% per dollar spent! Details: this card currently has no sign-up bonus, no annual fee, and offers 2x MRs on all purchases on up to $50,000 annually. After $50,000, all earnings are 1x. You can read our review here.
  3. Capital One Venture X: You earn 2 Capital One Miles per dollar spent, with no cap. Capital One Miles are worth 1.5 cents each (or more), so you are earning a 3% or greater return on your spend. Additionally, this card comes with a 100,000 Mile bonus after $10,000 spend in 6 months, which can be worth $2,000+ when transferred to travel partners. The card has a $395 annual fee, but has numerous perks to help offset the fee. You can read our review here.
  4. Chase Freedom Unlimited: You earn 1.5 Chase Ultimate Rewards per dollar spent, with no cap. Chase URs are worth over 2.0 cents per point, so you earn over 3.0% per dollar spent. Details: this card has a 20,000 UR sign-up bonus after spending $500 in the first 3 months of account opening. It has no annual fee and earns 1.5x on all spend, 3x on dining and pharmacy, 5x on travel through the Chase Portal, all with no cap, and an additional 1.5x on all purchases on up to $20,000 spent in the first 12 months.
  5. Amex Business Platinum: If your tax bill is over $5,000 (or any other bills or expenses), you earn 1.5x on those charges. Otherwise, this card earns 1x for tax bills. Earning 1.5x for a $5,000+ tax bill nets you over 3.0% in return per dollar spent. Details: with this card's current welcome offer, you can earn 150,000 MRs after spending $15,000 spend in 3 months. It has a $695 annual fee.
  6. Capital One Spark Cash Plus: You earn 2 Capital One Miles per dollar spent, with no cap. Capital One Miles are worth 1.5 cents each (or more), so you are earning a 3% or greater return on your spend. Additionally, this card comes with a $3,000 bonus (300,000 miles if you hold a Venture, VentureX or Spark Miles) after $50,000 spend in 6 months. The sign-up bonus is tiered, with $500 earned after spending $5,000 and another $2,500 earned after spending a total of $50,000. The card has a $150 annual fee, but the sign up bonus is worth $6,000+ when transferred to travel partners. You can read our review here.
  7. Alliant Credit Union Visa Signature Card: 2.5% cash back, up to $250 back per billing cycle (max of $10,000 spend). $99 annual fee, which is waived the first year. This card is one of the highest cash back cards on the market, but the $10,000 cap per cycle isn't very helpful for those with large tax bills.

Final Thoughts

Although we all dread paying our tax bill, it's easy to turn a cash profit from this unpleasant experience, earn a lucrative sign-up bonus, or both! With fees as low as 1.87%, spending the $3,000 or $4,000 for an average minimum spend requirement costs you only $56.10 or $74.80, respectively. With numerous sign up bonuses worth $1,000 or more, paying your tax bill is a perfect time for a new card. As always, come join us in our Facebook Group to learn many other tips and tricks like this to save money and earn valuable points and miles!
Travel on Point(s) has partnered with CardRatings for our coverage of credit card products. Travel on Point(s) and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

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