Travel on Points

Nothing in life is certain, except death, taxes, and earning credit card rewards with your tax bill.

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.
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.

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.

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.

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:

  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. 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:

  1. 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.
  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. Amex MRs are worth 2.0+ cents per point, so you earn 4.0%+ per dollar spent! Details: this card has a 15,000 MR sign-up bonus for $5,000 spend in 3 months. It has a $0 annual fee and 2x up to $50,000 annually.
  3. Chase Freedom Unlimited: You earn 1.5 Chase Ultimate Rewards per dollar spent, with no cap. Chase URs are worth 2.0+ cents per point, so you earn 3.0%+ per dollar spent. Details: this card has a 20,000 UR sign-up bonus for $500 spend in 3 months. It has a $0 annual fee and 1.5x on all spend with no cap.
  4. 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. Details: this card has a 75,000 MR sign-up bonus for $20,000 spend in 3 months. It has a $595 annual fee.

Conclusion

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!

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.

SIGN UP TO RECEIVE
ToP TIPS STRAIGHT TO YOUR INBOX

We promise to keep things short, sweet, and packed with awesome insights!