I value my credit card rewards at a minimum of at least 2%.
I had seen that some IRS approved credit card processors charge as little as 1.87%.
http://www.irs.gov/uac/Pay-Taxes-by-Cre ... Debit-Card
If I pay after April 7 by CC my bill will not be due until June 5 which also works out nicely for cash flow.
So I was planning to utilize a 1.87% fee processor.
I was disappointed to get to the payment section of Turbotax and found they used a "captive" credit card processor that charges 2.49%.
So I indicated I would mail in payment, e-filed and I now have a paper mail-in payment voucher due April 15.
Any problem with now using a 1.87% processor instead of mailing in the 1040-V voucher? 62 basis points savings using a 2-step process.
Paying IRS taxes with a credit card when e-filing
Paying IRS taxes with a credit card when e-filing
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
Re: Paying IRS taxes with a credit card when e-filing
If your credit card charges a 1.87% fee but rewards are 2.00%, then you save 13 basis points by using your card. On a $10,000 tax bill this earns you $13. How much do you value your time? I would be inclined to just write a check.
Re: Paying IRS taxes with a credit card when e-filing
direct debit ACH
Stay hydrated; don't sweat the small stuff
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Re: Paying IRS taxes with a credit card when e-filing
You can pay the balance due on your 1040 return any way that is permitted, including going to another payment provider other than the one TT uses.
Re: Paying IRS taxes with a credit card when e-filing
At least 2% - most of the reward cards I use because of how I use them reward at 3% or better.Jack wrote:If your credit card charges a 1.87% fee but rewards are 2.00%, then you save 13 basis points by using your card. On a $10,000 tax bill this earns you $13. How much do you value your time? I would be inclined to just write a check.
And the float is almost an additional two months.
The CC pay sites take about as much time as writing a check with no stamp or visit to the post office.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
Re: Paying IRS taxes with a credit card when e-filing
Client of the firm I work for has an estimated $11 million tax bill he wants to pay with his rewards debit card at $35,000 a day. The low man on the accountant totem pole (me) gets to punch in the numbers everyday for over a year. Got to get those extra sky miles.
Re: Paying IRS taxes with a credit card when e-filing
Why assume OP's bill is $10,000? Working in an H&R Block office in the 90's, I surprisingly encountered a client who'd made $1.5 million from very astute stock trading and owed IRS ca. $500,000. .0013 x $500,000 = $650.Jack wrote:If your credit card charges a 1.87% fee but rewards are 2.00%, then you save 13 basis points by using your card. On a $10,000 tax bill this earns you $13. How much do you value your time? I would be inclined to just write a check.
Harry at Bradenton
Re: Paying IRS taxes with a credit card when e-filing
Unless one of the websites is coded as a gas station or something, I suspect you'll only be getting the 2% on this though.MnD wrote:At least 2% - most of the reward cards I use because of how I use them reward at 3% or better.Jack wrote:If your credit card charges a 1.87% fee but rewards are 2.00%, then you save 13 basis points by using your card. On a $10,000 tax bill this earns you $13. How much do you value your time? I would be inclined to just write a check.