Hi,
As many of you know, you can pay various taxes (mostly property and income tax) with credit card. But has anyone voluntarily pay estimated tax mostly to get points/miles from the credit card? I'm considering doing the estimated tax payments rather than having my employer withhold tax from my paycheck. That way I can pay my tax with a credit card, get points and even be able to deny the gov't a bit of interest on the withheld money.
I'd like to hear about your experience with this, if you've done it before?
Originally posted by UA_Eagle:
Pay Taxes Online! | Town of Dunstable, MA::
(However, until further notice, Unibank has suspended acceptance of Visa cards for online tax payments. ) If you pay by credit card, the fee for your
http://dunstable-ma.gov/pay-taxesHOME |
I'm considering doing the estimated tax payments rather than having my employer withhold tax from my paycheck.
I would consult a tax expert before doing this. I think, but am not sure, that the IRS frowns on this.
Originally posted by nwchgo:
I would consult a tax expert before doing this. I think, but am not sure, that the IRS frowns on this.The estimated payments are credited to the applicable quarter while witholding is credited to the whole year. If you missed paying tax on some large amount of income in the first quarter you can make up for it with extra withholding. An extra 4th quarter payment won't help, though.
Questions like this should really be asked of an accountant, a category into which I do not fall.
i can see bill gates putting microsoft tax on his amex...
"thanks! 2 billion FF points!"
I've never heard of being able to pay the IRS (estimated payments or otherwise) with a credit card directly. I think you have to use a middleman "Official Payments" comes to mind. The fees charged for the service are typically equal to or greater than the value of the miles you'll earn.
Do a search many other threads going on this subject. Yes you can make estimated payments using offical payment corp. Yes they can handle any large $$. Now does anyone know of any double point deals other than amex starwood that has a limit of 5k bonus limit right now?
For a few years Fairfac County would accept Discover for real estate taxes for a fixed, $5.00 fee. Alas, no more. The fee is now MUCH more than the 1% Discover reward. So back to checks.
I know it's sort of splitting hairs, but it's not the government that is charging the fee: it's the middleman that takes the fee and they pay your exact tax amount to the government entity. (At least that's the way it reads on the website.)
http://www.officialpayments.com/
The fee for Federal payments is 2.49% I will admit, that's actually better than I expected, and it is certainly low enough that you'd at least think about it if you were getting double miles.
I think a few years ago there was a tiered fee structure that usually resulted in 4-5% juice when it was all said and done.
Fee for state/local varies - I plugged in my state/local agencies and the juice was anywhere from 2.5 to 3.5 percent.
Another factor: if you happen to have access to a 0% teaser that includes all charges including purchases, this is definitely worth considering.
I usually pay my taxes using officialpayments.com when there's a specific goal to reach, i.e. $25k with Delta Platinum AMEX to get the 10k bonus miles, or a double/triple bonus program. I've done this to pay estimated taxes. I've also done this to pay county taxes.
I've paid estimated taxes by credit card before when I could have waited and paid the entire bill in April, but that was during a double miles on ALL purchases on Delta AMEX (Dec 2001). Splitting the State tax between '01 and '02 allowed me to hit the federal itemization threshold both years.
Assuming the IRS has no problem with your idea, I'm not sure I would do it to earn 1:1 miles/dollar. The fees involved might make your award tickets kind of expensive!
That's the key: you have to be getting at least triple miles, or be closing in on a big threshold bonus, for this to pay off. The up-front juice is way too high for this to be a long-term profitable source of FF miles.
Originally posted by UA_Eagle:
I'm considering doing the estimated tax payments rather than having my employer withhold tax from my paycheck.
I'm a bit confused. Is your employer withholding more than the minimum from your paycheck -- so you are going to file a new withholding form to change it? You cannot put payroll withholding on a credit card, and your employer cannot withhold less than the minimum amount.
The general advice I'd give you is that if you are considering "unconventional" schemes, even if not fraudulent or illegal, whatever miles you may earn aren't worth the trouble of jerking around with the IRS.
I use officialpayments when they run bonuses with my credit cards -- one year they did a 5K mile bonus for any charge amount, and another year, they did double miles for tax payments.
[edited for typo]
[This message has been edited by pynchonesque (edited Dec 17, 2003).]
Originally posted by pinniped:
That's the key: you have to be getting at least triple miles, or be closing in on a big threshold bonus, for this to pay off. The up-front juice is way too high for this to be a long-term profitable source of FF miles.
I think this is an important point. My understanding is that the govt charges a fee 2% for credit card payments. If so, this would hardly be worth it just for 1 mile/$.
Have your employer withhold $0 then pay the tax liability quarterly via CC. You get more in your paycheck but you do have to pay the "fee" So is it really worth it? Could be. If you have a $120K per year tax liability, that's a 1st class ticket most places. To Europe it could be worth $8K so if you were going to pay for a ticket anyway then the fee is certainly worth it.
 What dress should i wear for an interview ?
 Financial Representative =Insurance salesman?
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Pay tax with credit card...