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Paying taxes with a credit card can be beneficial for earning rewards, meeting big spend requirements, or earning welcome bonuses.
Paying other taxes, such as state, local, or property taxes, with a credit card may vary depending on the location and the fees involved.
Overpaying taxes with a credit card is allowed, and you will receive a refund for any overpayment. However, it's crucial to ensure that you have the means to pay off your credit card bill while waiting for the refund.
Deep dives
Paying Taxes with Credit Cards
Paying taxes with a credit card can be beneficial for earning rewards, meeting big spend requirements, or earning welcome bonuses. There are various credit cards that offer 2x rewards on all spend, making tax payments a great way to maximize earning. Additionally, some credit cards offer perks for big spends, such as free hotel nights, elite status boosts, or companion tickets. However, it's important to be aware of any fees associated with paying taxes with a credit card and ensure that you have the funds to pay off your credit card bill. Overpaying taxes is allowed, but be prepared to wait for the refund, as it may not come immediately.
Other Taxes and Options
Paying other taxes, such as state, local, or property taxes, with a credit card may vary depending on the location and the fees involved. Some bill payment services like PayPal offer the option to pay taxes with a credit card, while others may restrict payment to debit cards. It's worth checking with your local tax authority to see if there are any options available. Using gift cards or bill payment services like Plastic can also be a way to pay taxes, but be aware of any fees involved. Ultimately, it's important to consider the specific benefits, fees, and rewards associated with different credit cards and payment options to determine the best strategy for your tax payments.
Overpayment and Caution
Overpaying taxes with a credit card is allowed, and you will receive a refund for any overpayment. However, it's crucial to ensure that you have the means to pay off your credit card bill while waiting for the refund. It's not advisable to overpay taxes if you don't have the necessary funds to cover the credit card bill. Timing is also important, as refunds may not come immediately, and it's essential to avoid incurring interest on your credit card balance. It's always prudent to carefully plan and consider your financial situation before using a credit card for tax payments.
Using credit cards to pay taxes and earn rewards
One option for paying taxes with a credit card is to potentially earn a profit if the card earns better than 2% cashback. Another option is to buy points cheaply by using cards that earn more than 2 points per dollar, as transferable points can be worth at least 1.5 cents per point. Reducing withholdings and paying estimated taxes is another way to earn rewards, as payments can be made through online processors. If a credit card is not accepted, using PayPal as a workaround can still allow for earning rewards. It is important to note that taxes can be paid online up until the day they are due at midnight. Overall, paying taxes with credit cards can be a way to earn big rewards, especially when making use of welcome bonuses and favorable redemption options.
Transferring points when closing a credit card account
When faced with the situation of having to use or lose points due to a closed credit card account, there are several transfer options to consider. For Chase, transferring points to Hyatt or airline partners such as United or Southwest can offer great value. American Express points can be transferred to Air Canada's Aeroplan program, offering flexibility and a wide range of partners. Citi ThankYou points can be transferred to Choice Hotels for good value, or to Flying Blue for access to a comprehensive airline network. Capital One points can also be transferred to Aeroplan for increased options in the Star Alliance network. Ultimately, the choice of transfer partner depends on individual travel preferences, airline alliances, and available award options.
