I have an upcoming estimated tax payment of ~$90k, and I just discovered that federal taxes can be paid by credit card!
Any suggestions for the best cards to use for taxes? I prefer to earn points, but I’m also open to cash back options with at least 3%. Additionally, I’m considering using business cards if they can be used for personal tax payments, and of course, I’ll be applying for at least one new card to qualify for a sign-up bonus.
Thanks!
The PayPal Mastercard offers 3% cash back when you pay through PayPal, and I believe most tax websites accept PayPal. That’s how I handle my quarterly taxes.
Maris said:
The PayPal Mastercard offers 3% cash back when you pay through PayPal, and I believe most tax websites accept PayPal. That’s how I handle my quarterly taxes.
I paid mine this year using PayPal, so if they grant you a sufficient limit, consider this card.
Check if a full payment is required or if you can pay in installments. If it’s the latter, consider applying for multiple Inks (it’s recommended to open them every ~3 months). The Ink Preferred typically offers the largest bonus. Ink Cash is appealing because it has no annual fee and offers 5% back at office supply stores (which you can use to buy Visa gift cards for IRS payments). Look for referral links on Reddit.
@Paden
I plan to pay this all at once since this is my quarterly installment. Do you have recommendations for non-Chase cards? Unfortunately, I’m over 5/24 due to my Venture X.
Wesley said:
@Paden
I plan to pay this all at once since this is my quarterly installment. Do you have recommendations for non-Chase cards? Unfortunately, I’m over 5/24 due to my Venture X.
Here’s a helpful churning flowchart.
@Paden
Thanks for sharing!
If you pay your taxes through ACI Payments and PayPal, it gets classified as a utility payment, allowing 5% cash back with the U.S. Bank Cash+. Check this link.
@Tait
Is that cap specific?
Wesley said:
@Tait
Is that cap specific?
Yes, it’s capped at $2000 per quarter.
Wesley said:
@Tait
Is that cap specific?
Yes, it’s capped at $2000 per quarter.
That won’t help much since I need to pay 90k in taxes… a bonus on 2k is minimal.
@Wesley
Can you split the payments to pay quarterly?
Consider the US Bank Smartly card.
Dexter said:
Consider the US Bank Smartly card.
What’s special about that card?
Dexter said:
Consider the US Bank Smartly card.
What’s special about that card?
It’s a 2% cash back card that can go up to 4% if you maintain $100k in assets at US Bank or with their brokerage.
@williams
That’s great. I could easily achieve that, so I might go for it since 4% cash back is more appealing than just 2x points.
Wesley said:
@williams
That’s great. I could easily achieve that, so I might go for it since 4% cash back is more appealing than just 2x points.
To access that rate, you need to open the full suite of accounts at US Bank. Additionally, their investment services can be outdated, so ensure you understand the terms and any fees associated with your accounts.
@Montana
What are the minimum accounts I need to open? I wouldn’t mind holding $100k in a checking account since I typically keep $250k as a rainy day fund with Chase.
Wesley said:
@Montana
What are the minimum accounts I need to open? I wouldn’t mind holding $100k in a checking account since I typically keep $250k as a rainy day fund with Chase.
Why bother doing this for ~1% return if you’re keeping $250k in a checking account? You’d earn more by putting that in a high-yield savings account (HYSA) at around 4-4.5%.