It’s Tax Day! It Keeps Getting Better To Pay Your Taxes With A Credit Card, 2024 Is Now The Best Year Ever To Pay Your Taxes On A Card!

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Update, 4/15/24: It’s tax day, which card will you use to make a payment?

Originally posted on 1/1/24:

Paying taxes on a credit card:

Credit card processing fees are updated annually on January 1st.

Luckily not everything is subject to inflation. You can now pay just 1.82% to process your tax payment via credit card! You can make estimated payments at any time. 2023 Q4 estimates are due 1/16/24.

If you aren’t able to use your card to make a payment, try paying via Paypal.

Here is a history of what credit card processing fees for taxes have cost:

• 2003-2009: 2.49%
• 2010: 1.95%
• 2011: 1.9%
• 2012: 1.89%
• 2013: 1.88%
• 2014-2020: 1.87%
• 2021: 1.96%
• 2022: 1.87%
• 2023: 1.85%
• 2024: 1.82%

• You can make 2 payments per credit card processor for each quarterly estimate (1040-ES).
• You can make 2 payments per credit card processor for your year end bill (1040).
• You can make 2 payments for an extension of time to file (4868).
• You can make 2 payments for past amended returns (1040X).
• You can make another 2 payments each time by using a spouse’s information to pay, though you may have to call the IRS to confirm that they link that payment to your joint return as that doesn’t always happen automatically. You can also call the IRS to reallocate payments.

You can view all previous tax payments made to the IRS here.

The tax payment fee may be considered a business expense, which will significantly change the math below based on your marginal tax rate. Be sure to speak to a tax professional about that.

Tax payments are considered a regular purchase, not a cash advance.

You can also request a refund for any overpayment and the IRS will cut you a check or a direct deposit into your checking account. You may even wind up getting paid interest by the IRS if the refund check is delayed.

You can also request that up to $5,000 of overpayments per return be converted into I Bonds. That’s on top of the regular $10,000 per person limit for I Bonds purchases.

Big welcome bonuses:

It can definitely make sense to pay your taxes via credit card if you are signing up for a card and are trying to reach a spend threshold to earn a signup bonus that you won’t be able to reach without some help. The 1.82% fee pales in comparison to earning a mega signup bonus as well as the regular miles for the purchase.

Chase:

• Chase Ink Business Preferred Card: 100,000 Chase Ultimate Rewards points for opening the card and spending $8,000 in 3 months.
  • Read more.

• Ink Business Cash® Credit Card: $350 in the form of 35,000 Chase Ultimate points for spending $3,000 in 3 months and another $400 in the form of 40,000 Chase Ultimate points for spending another $3,000 in 6 months for a total of 75,000 Chase Ultimate points, plus if you have a Chase business checking account on your first card anniversary date next year, you earn a one-time 10% bonus of all eligible cash back earned from spending in your first year!  
  • Read more.
• Chase Ink Business Unlimited Card: $750 cash back in the form of 75,000 Chase Ultimate Rewards points for opening the card and spending $6,000 in 3 months
  • Read more.
• Ink Business Premier℠ Credit Card: $1,000 cash back for spending $10,000 in 3 months. 
  • Read more.
• Chase Sapphire Preferred® Card: 60K Chase Ultimate Rewards points for spending $4,000 in 3 months.
  • Read more.
• Chase Sapphire Reserve® Card: 60K Chase Ultimate Rewards points for spending $4,000 in 3 months.
  • Read more.
• United Club℠ Infinite Card: 80K United miles for spending $5,000 in 3 months.
• The Chase Southwest Business Premier card: 60K points for spending $3K in 3 months.
  
• The Chase Southwest Performance Business Credit Card: 80K points for spending $5K in 3 months.
• The Chase World Of Hyatt Business Credit Card: 60K points for spending $5K in 3 months. 
• The Chase IHG Premier Business Card: Up to 175K IHG points (140K for spending $4K in 3 months plus another 35,000 bonus IHG points for spending another $3,000 within 6 months.)
  • Read more.

AMEX:

• AMEX Consumer Platinum card: 80K bonus points for spending $8,000 in 6 months.
  • Read more.
• AMEX Business Platinum Card: 120K bonus points for spending $15,000 in 3 months. 
  • Read more.
• AMEX Business Gold Card: 70,000 bonus points for spending $10,000 in 3 months. 
  • Read more.
• AMEX Consumer Gold Card: 60,000 bonus points for spending $4,000 in 6 months.
  • Read more.

Capital One:

• Capital One Venture Rewards Credit Card: 75,000 bonus miles for spending $4,000 in 3 months.
  • Read more.
• Capital One Venture X Rewards Credit Card: 75,000 bonus miles for spending $4,000 in 3 months. Plus get a $300 annual travel credit, 10K miles anniversary bonus, and much more.
  • Read more.
• Capital One Venture X Business Card: 150,000 bonus miles for spending $30,000 in 3 months. Plus get a $300 annual travel credit, 10K miles anniversary bonus, and much more.
  • Read more.
• Capital One Spark Cash Plus: $1,200 bonus cash back (convertible into 120,000 bonus miles) for spending $30,000 in 3 months.
  • Read more.

Citi:

• Citi Premier® Card: 60K bonus points for spending $4,000 in 3 months.
  • Read more.
• The CitiBusiness AAdvantage Platinum World Mastercard: 65K miles for spending $4K in 4 months.
  • Read more.
• The Citi AAdvantage Executive World Elite Consumer Mastercard: 70K miles for spending $7K in 3 months.
  • Read more.

Best Cards To Pay Taxes With:

Even if you don’t have a new card, it can still make sense to pay your taxes with a credit card for the rewards and the extra time to pay.

In order to determine if it’s worth earning miles at a 1.82% rate, you’ll need to assign a value to each currency. Values are highly subjective and will vary based on what you use the miles for, so YVMV (Your valuation may vary!).

• The Ink Business Premier℠ Credit Card earns 2.5% cash back on $5,000+ purchases and 2% cash back on small purchases, so you’ll come out .68% ahead of the 1.82% tax processing fee on $5,000+ payments. There are no limits on the 2.5% cash back. Note that this card doesn’t earn transferable points like other Chase Ink cards.
  • A $5,000 tax payment will cost $91, but you will earn $127.28 cash back.
  • A $10,000 tax payment will cost $182, but you will earn $254.55 cash back.
  • A $100,000 tax payment will cost $1,820, but you will earn $2,545.50 cash back.

• The Blue Business℠ Plus Credit Card from American Express offers 2 points per dollar spent everywhere. If you open this card now you would also earn 15K points for spending $3,000 in 3 months. No annual fee.
  • A $10,000 tax payment will cost $182, but you will earn 20,364 points. If you value your AMEX points at 1.4 cents each, that a value of $285.10 worth of points. You can transfer those points into miles with airlines like Avianca, British Airways, Delta, Singapore, Virgin Atlantic, and more.
  • Note that you only earn 2 points per dollar on $50,000 of annual spending, though if you have multiple primary cards they would get 2 points per dollar on $50,000 of annual spending on each card.

• The Chase Ink Business Unlimited Card earns 1.5 Chase Ultimate Rewards points per dollar spent everywhere. If you open this card you would also earn $750 in the form of 75K points for spending $6,000 in 3 months. No annual fee.
  • A $10,000 tax payment will cost $182, but you will earn 15,273 points. If you value your Chase points at 1.5 cents each, that a value of $229.10 worth of points. If you or someone in your household has a Sapphire Preferred, Sapphire Reserve, or Ink Preferred then you can transfer points to one of those cards and from there to airlines like United and hotel programs like Hyatt. Alternatively if you have a Sapphire Reserve you can also redeem those points for 1.5 cents each towards travel, while having the Sapphire Preferred or Ink Preferred would also you to redeem those points for 1.25 cents each towards travel.

• The Chase Freedom Unlimited® card earns at least 1.5 Chase Ultimate Rewards points per dollar spent everywhere and 3 points per dollar spent during the first year of cardmembership on up to $20K of spending via this link. No annual fee.
  • With an existing card, a $10,000 tax payment will cost $182, but you will earn 15,273 points. If you value your Chase points at 1.5 cents each, that’s a value of $229.10 worth of points.
  • If you get this card with an offer to earn 3 points per dollar, a $10,000 tax payment will cost $182, but you will earn 30,546 points. If you value your Chase points at 1.5 cents each, that’s a value of $458.19 worth of points. If you or someone in your household has a Sapphire Preferred, Sapphire Reserve, or Ink Preferred then you can transfer points to one of those cards and from there to airlines like United and hotel programs like Hyatt. Alternatively if you have a Sapphire Reserve you can also redeem those points for 1.5 cents each towards travel, while having the Sapphire Preferred or Ink Preferred would also you to redeem those points for 1.25 cents each towards travel.

• The Business Platinum Card® from American Express offers 1.5 points per dollar spent everywhere on transactions that are $5,000 or more.
  • A $10,000 tax payment will cost $182, but you will earn 15,273 points. If you value your Business Platinum AMEX points at 1.5 cents each, that a value of $229.10 worth of points. You can transfer those points into miles with airlines like Avianca, British Airways, Delta, Singapore, Virgin Atlantic, and more.
  • You can earn 1.5 points per dollar on up to $2,000,000 of annual spending.
  • Having this card allows you to get 35% of your AMEX points rebated on all business/first paid airfare and on coach airfare with the airline of your choice, up to 1,000,000 bonus points per calendar year.

• The Capital One Venture X Rewards Credit Card, The Capital One Venture Rewards Credit Card, and The Capital One Spark Miles for Business earn 2 Capital One miles per dollar spent everywhere.
  • A $10,000 tax payment will cost $182, but you will earn 20,364 Capital One miles. If you value your Capital One miles at 1.4 cents each, that a value of $285.10 worth of points. You can transfer those points into miles with airlines like Avianca, Flying Blue, Turkish, Singapore, Qantas, and more.

• The Citi Double Cash® Card earns 2% cash back, so you’ll come out .18% ahead of the 1.82% tax processing fee. Even if you don’t want to deal with the miles aspect of this, the 2% cash back makes it a no brainer to use.
  • You can also transfer points from this card to a Citi Premier® Card Card, from where you can transfer points to airlines like JetBlue, Turkish, Qantas, and more. A $10,000 tax payment will cost $182, but you will earn 20,364 Citi ThankYou points. If you value your Citi ThankYou points at 1.4 cents each, that a value of $285.10 worth of points. If you also have a Citi Rewards+® Card you’ll get a 10% rebate on point redemptions and transfers, making the points even more valuable!

• Capital One Spark Cash Plus earns 2% cash back, so you’ll come out .18% ahead of the 1.82% tax processing fee. Even if you don’t want to deal with the miles aspect of this, the 2% cash back makes it a no brainer to use.
  • A $10,000 tax payment will cost $182, but you will earn 20,364 Capital One points. If you value your Capital One points at 1.4 cents each, that a value of $285.10 worth of points.

Earn Status And More!

Earn AA elite status and companion certificates:

• The Citi Business AA Platinum card offers a free domestic companion certificate for spending $30K/year and earns 1 loyalty point per dollar spent to earn AA status.
• The Citi AA Executive card earns 1 loyalty point per dollar spent to earn AA status plus earns a bonus 10K loyalty points for earning 50K loyalty points in a year and another bonus 10K loyalty points for earning 90K loyalty points in a year.
• The Citi AA Platinum Consumer card earns 1 loyalty point per dollar spent to earn AA status, plus offers a $125 AA flight discount if you spend $20K/year.
• The Citi AAdvantage MileUp Consumer Mastercard earns 1 loyalty point per dollar spent to earn AA status.
• You’ll need to earn 39K loyalty points for Gold, 74K for Platinum, 124K for Platinum Pro, and 199K for Executive Platinum status after the 1K bonus. At 175K loyalty points you can choose 25K bonus miles or 2 systemwide upgrades, and at 250K loyalty points you can choose 60K bonus miles or 4 systemwide upgrades.
  • I value AA miles at about 1.4 cents each, so if you’re paying taxes at a cost of 1.82 cents each, that would be valuing each loyalty point at roughly 0.42 cents each, but at 175K and 250K that cost goes down if you select 25K miles or 60K miles. That would put the cost of Gold status at $168, Platinum at $315, Platinum Pro at $525, or Executive Platinum 200K at $490 after backing out the 25K bonus miles or Executive Platinum 250K at negative $140 after backing out the 85K bonus miles. Status earned starting 3/1/24 would be valid through 3/31/26.
  • Read more here.

Earn Southwest elite status and Companion Pass:

• The Southwest® Rapid Rewards® Premier Business Credit Card, Southwest® Rapid Rewards® Performance Business Credit Card, Southwest Rapid Rewards® Premier Credit Card, Southwest Rapid Rewards® Priority Credit Card, or Southwest Rapid Rewards® Plus Credit Card gives companion pass status with unlimited free uses until the end of the next calendar year if you earn 125K points in a year across all Southwest cards if you hold a card by 1/1/24, otherwise you’ll need 135K points. The cards also offer 1.5K tier points towards A-List status for every $10K spent, with no cap on earnings.
  • Southwest points are a fixed value currency, so there are no aspirational aspects to this program as points will typically be worth between 1.3-1.6 cents each. You’ll need to determine how to value having Companion Pass and A-List status to see if its worth putting tax payments on this card.

Earn Hyatt elite status, upgrades, and bonus free nights:

• The Chase World Of Hyatt Consumer Credit Card offers a 2nd annual anniversary night if you spend $15K in a calendar year. If you open a new card you can also earn up to 60K bonus points with $15,000 of spending within 6 months.
• This card also offers 5 elite qualifying night credits every year and you’ll earn an additional 2 night credits towards elite status with every $5,000 that you spend.

• The Chase World Of Hyatt Business Credit Card earns 5 night credits towards elite status with every $10,000 that you spend. If you open a new card you can also earn 60K bonus points with $5,000 of spending within 3 months.
• It also offers a 10% rebate on award stays, up to 20K rebated points, after you spend $50,000 on the card in a calendar year.

I value Hyatt points at about 1.5 cents each, so depending on how many additional free nights and elite status benefits you can rack up and how you value those free nights and benefits, it can make sense to put tax payments on this card.

As of today, you can also earn new milestone benefits described here.

Earn Marriott elite status and bonus free nights:

• The Marriott Bonvoy Business® American Express® Card offers a 2nd annual free night for spending $60K in a calendar year.
• The Marriott Bonvoy Brilliant Consumer AMEX offers a 2nd 85K award night for spending $60K in a calendar year.
• The discontinued Ritz-Carlton card offers Platinum status for spending $75K in a calendar year. You’ll need to determine how to value having Platinum status to see if its worth putting tax payments on this card.
  • I value Marriott points at about 0.6 cents each, so depending on how many additional free nights and elite status benefits you can rack up and how you value those free nights and benefits, it can make sense to put tax payments on this card.

Earn JetBlue elite status:

• JetBlue cards offer 1 (Mosaic qualifying) tile for every $1,000 spent. Spend $50K for Mosaic Tier 1, $100K for Tier 2, $150K for Tier 3, or $200K for Tier 4.
  • JetBlue points are a fixed value currency, so there are no aspirational aspects to this program as points will typically be worth between 0.9-1.3 cents each. You’ll need to determine how to value having Mosaic status to see if its worth putting tax payments on this card.

Earn Delta elite status:

• The Delta Platinum Consumer and Delta Platinum Business cards offer 1 MQD per $20 spent and 2,500 MQDs each just for having them. You can earn Silver with 5,000 MQDs, Gold with 10,000 MQDs, Platinum with 15,000 MQDs, or Diamond with 28,000 MQDs.
• The Delta Reserve Consumer and Delta Reserve Business cards offer 1 MQD per $10 spent and 2,500 MQDs each just for having them. You can earn Silver with 5,000 MQDs, Gold with 10,000 MQDs, Platinum with 15,000 MQDs, or Diamond with 28,000 MQDs.
  • I value Delta miles at about 1 cent each. You’ll need to determine how to value earning qualifying miles and the flight spending requirement waiver to see if its worth putting tax payments on this card.
  • Here is how many MQMs you need to earn Delta status.
  • Here is how you can earn Delta status with no spending.

Earn United elite status:

• The United℠ Business Card, Chase United Business Club Card, and United℠ Explorer Card earn 25 PQPs for every $500 spent, up to 1,000 PQP for spending $20K.
• United Quest℠ Card earns 25 PQPs for every $500 spent, up to 6,000 PQP for spending $120K.
• United Club℠ Infinite Card earns 25 PQPs for every $500 spent, up to 10,000 PQP for spending $200K.
• The discontinued Presidential Plus Card earns 25 PQPs for every $500 spent, up to 10,000 PQP for spending $200K.
  • I value United miles at about 1.4 cents each. You’ll need to determine how to value earning qualifying miles and the flight spending requirement waiver to see if its worth putting tax payments on this card.
  • Here is how many PQPs you need for status.

Earn Air Canada Aeroplan status or a companion pass:

• The Chase Aeroplan Card offers 25K status for spending $15K/year through the following calendar year.
• If you spend $50K in a calendar year you will gain a level of status.
• Upon spending $100,000, $250,000, $500,000 and $750,000 in a calendar year you’ll earn a 50% off Priority Rewards redemption certificate.
• If you spend a whopping $1,000,000 in a year you’ll get a companion pass that allows unlimited free companion award travel systemwide in any class of service. That pass will be valid for the rest of the calendar year in which you spend the million bucks and for the following calendar year.
  • I value Aeroplan miles at about 1.3 cents each. You’ll need to determine how to value earning qualifying miles and the flight spending requirement waiver to see if its worth putting tax payments on this card.

Earn a British Airways companion pass:

• The British Airways Visa Signature® Card offers a free one-time use companion pass for spending $30K/year. If you open a new card you can also earn 75K bonus Avios for spending $5,000 in 3 months, plus 5 Avios per $1 spent on gas, grocery store and dining purchases for the first 12 months of your account opening or up to $10,000.
• The free companion pass is valid on BA award tickets worldwide, though fuel surcharges will apply. You can now also get 50% off an award for 1 person if you don’t have a companion.
  • I value BA Avios at about 1 cent each. You’ll need to determine how to value the companion pass to see if its worth putting tax payments on this card.

Earn an Aer Lingus companion pass:

• The Chase Aer Lingus offers a companion ticket good when booking a paid economy Aer Lingus ticket if you spend $30,000 in a calendar year. If you open a new card you can also earn 75K bonus Avios for spending $5,000 in 3 months, plus 5 Avios per $1 spent on gas, grocery store and dining purchases for the first 12 months of your account opening or up to $10,000.

Earn a $1,000 Iberia voucher:

• The Chase Iberia: offers a $1,000 discount voucher off 2 tickets on the same Iberia flight if you spend $30,000 in a calendar year. If you open a new card you can also earn 75K bonus Avios for spending $5,000 in 3 months, plus 5 Avios per $1 spent on gas, grocery store and dining purchases for the first 12 months of your account opening or up to $10,000.

Earn Hilton elite status and bonus free nights:

• The AMEX Hilton Honors Business card offers a free annual night for spending $15K/year, another annual night for spending another $45K/year, and Diamond status for spending $40K/year. The ability to earn free nights ends 6/30.
• The AMEX Hilton Honors Surpass card offers a free annual night for spending $15K/year and Diamond status for spending $40K/year.
• The AMEX Hilton Honors Aspire card offers a 2nd free annual night for spending $30K/year and a 3rd free night for spending $60K/year.
• Spending on all Hilton cards count towards Elite tier qualification and Lifetime Diamond Status. Learn more about elite status here and lifetime diamond status here.
• Read more on these cards here and here.
  • I value Hilton points at about 0.45 cents each. You’ll need to determine how you value the free night and status benefits to determine if it’s worth putting tax payments on this card.

Is it worth it?

If you’re coming out ahead of the cashback earned on a card, this is a no-brainer.

As for earning miles, it all depends on what you do with your miles. This isn’t the cheapest way to earn miles, but it’s painless. The ability to overpay your taxes to reach a threshold is also helpful.

The value of airline miles is huge if you fly last-minute, one-way, or in business or first class internationally.

• If I need a last minute short-haul flight like Cleveland-NYC that can cost $500 each way, I can instantly transfer 6K miles to Air Canada, 6K points to Qatar, 6.5K points to Avianca Lifemiles for travel on United or 8.25K points to British Airways to book a short-haul on American with no last minute booking fees. That’s a value of up to 7 cents per point.
• With 10K Turkish miles I can book a one-way flight on United to anywhere in the US, even Hawaii or Alaska. In business class it’s just 15K miles each way!
• 86K points transferred to Singapore is enough for a ticket in a private couples suite on an A380 one-way from JFK to Frankfurt with no fuel surcharges.
• If I want to fly in a $25,000 ANA First Class Suite round-trip from the US to Tokyo, I can instantly transfer 145K or 170K points to Virgin Atlantic. That’s a value of up to 18 cents per point.
• If I want to stay in a 5 star Park Hyatt in the Maldives, Melbourne, NYC, Paris, Sydney, or Tokyo that would cost over $1,200/night, I can instantly transfer 20K-40K points to Hyatt to do that, a value of up to 6 cents per point.
• Learn more about which points transfer to which airlines and how long those transfers will take here.

Which card do you use to you pay your taxes? Or is it too pricey of a method to get miles? Sound off in the comments!