**This article is no longer updated and may contain expired offers. See our current ToP Guide to Paying Taxes with a credit card.**
You heard that right: turn lemons into lemonade. If you owe Federal taxes (or think you might), it's time NOW 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
There are three official websites that accept credit cards for your federal tax bill:
- www.payusatax.com accepts Amex, Discover, Mastercard and Visa for a fee of 1.96%.
- www.pay1040.com accepts Amex, Discover, Mastercard and Visa for a fee of 1.87%.
- www.officialpayments.com/fed accepts Amex, Discover, Mastercard and Visa for a fee of 1.99%.
Of these, #2 is obviously the best. It is 0.09% cheaper than the 2nd best option, which can really add up if you face a large tax bill!
But wait, there's sometimes a better option: Plastiq. This is a service that allows you to use a credit card for almost anything (Amex has some restrictions) for a fee of 2.5%. However, over the last 6+ months, Plastiq is regularly emailing promotions for 1.0% or 1.5% fees on 3 payments up to $10,000 each. If you've never used Plastiq before, I recommend using it ASAP and then hoping for a promotion email. To sweeten the deal, you can use our referral code (607438) for $500 fee-free dollars!
Either way, you can pay your federal tax bill via credit card for between 1.0%-1.87%.
Best Credit Cards for Tax Bills
As with most things in the award travel world, the best card for any bill is the card you working on a minimum spend for a sign-up bonus or opening a new card to hit another sign-up bonus. If for some reason you need to take a break from opening new cards, or you're not sure what is the best card for these (potentially) large bills, these are our recommended cards for paying taxes and earning rewards that outweigh the 1.0%-1.87% fees:
- Citi Double Cash: You earn 1% when you make a charge and 1% when you pay it off. This is earning a profit of 0.13%-1.0% when paying your taxes. If you have a Citi Premier or Prestige, you can covert the cashback to Thank You Points (worth over 1.8 cents each) for 2x earnings on your tax bill. This allows you to “buy” Thank You Points for 0.5% to 0.935% each, which is well below their value! Details: this card has no sign-up bonus, but has $0 annual fee and no limits on 2x earnings.
- 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. Amex MRs are worth 2.0+ cents per point, so you earn 4.0%+ per dollar spent! It has a $0 annual fee and earns 2x on all spend up to $50,000 annually.
- Chase Freedom Unlimited: You earn 1.5 Chase Ultimate Rewards per dollar spent, with no cap. Chase Ultimate Rewards are worth 2.0+ cents per point, so you earn 3.0%+ per dollar spent. It has a $0 annual fee and 1.5x on all spend with no cap.
- Amex Biz Platinum: If your tax bill is over $5,000 (or any other bills or expenses), you earn 1.5x on those charges. Otherwise, it earns 1x for tax bills. Earning 1.5x for a $5,000+ tax bill nets you a 3.0%+ return per dollar spent. It has a $695 annual fee.
Although we all dread paying our tax bill, it's fairly easy to use this unpleasant experience to turn a nice cash profit, earn a lucrative sign-up bonus or both! 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!
