Federal Estimated Taxes

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SlowMovingInvestor
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Federal Estimated Taxes

Post by SlowMovingInvestor » Thu Jan 11, 2018 3:20 am

I need to pay some estimated Fed taxes for 2017, and I also need to run up some credit card spending to hit required spend for a bonus. I am thinking of paying a portion of q4 taxes via CC (maybe even 2 CCs), just enough to meet required spend, and then pay for the rest using either bank transfer or via check. I know there will be a fee for CC, and I'm fine with that.

I have not done this before, so my questions are
1) Is it possible to send multiple payments for q4 taxes by multiple modes (CC + check etc., and have them be credited properly ?
2) From what I gather, you can pay online by e-check (or is it ACH) , rather than actually mailing a check in ?
3) I'm assuming one can make either CC or e-check payment as late as the 16th (since Jan 15th is a Federal holiday) and it will be counted as a Q4 payment even if it takes a while for the payment to be posted ( a paper check payment would take even longer to process, so it seems obvious this should be the case). Is that correct ?

ivk5
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Re: Federal Estimated Taxes

Post by ivk5 » Thu Jan 11, 2018 5:53 am

SlowMovingInvestor wrote:
Thu Jan 11, 2018 3:20 am
1) Is it possible to send multiple payments for q4 taxes by multiple modes (CC + check etc., and have them be credited properly ?
Yes.
SlowMovingInvestor wrote:
Thu Jan 11, 2018 3:20 am
2) From what I gather, you can pay online by e-check (or is it ACH) , rather than actually mailing a check in ?
Yes, you can use Direct Pay to pay directly from your bank account. You will need to provide some basic info to verify identity (Name, Address, SSN, DOB, Filing Status - all need to match a specific year's return that you select from past six years).

I prefer EFTPS, but if you are not already enrolled, it's too late to do it for Q4 payments since they have to mail you a PIN.
SlowMovingInvestor wrote:
Thu Jan 11, 2018 3:20 am
3) I'm assuming one can make either CC or e-check payment as late as the 16th (since Jan 15th is a Federal holiday) and it will be counted as a Q4 payment even if it takes a while for the payment to be posted ( a paper check payment would take even longer to process, so it seems obvious this should be the case). Is that correct ?
With Direct Pay, I believe that's correct.

With EFTPS, I believe online payments need to be submitted by 8pm ET the prior business day.

SlowMovingInvestor
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Re: Federal Estimated Taxes

Post by SlowMovingInvestor » Thu Jan 11, 2018 5:08 pm

Thanks !

I have a related question. Is it also possible to pay the IRS via Credit Card after Jan 16th ? I actually signed up for a CC a few days ago and might not get the CC in time for that deadline.

if I use a CC after Jan 16th (say the 20th or so) but well before filing 2017 return, I realize there will be interest (but I do need to put up some required spend on the card, and am willing to pay the interest). I'm wondering more whether the payment sites (which seem to be private parties authorized by the IRS) would still allow me to make an estimated payment after Jan 16th ? And I'm assuming that the IRS (and tax software such as TT) will correctly stop the interest clock on the payment date.

So if I have $4k still due and pay on the Jan 20th, my additional interest because I'm paying late will be 4Q interest on 4k (which shouldn't be that much at 4% annual rate) + the extra 3-4 days ?

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Pajamas
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Re: Federal Estimated Taxes

Post by Pajamas » Fri Jan 12, 2018 4:48 pm

You probably are already aware, but just in case you're not, there are fees for using a debit or credit card.

https://www.irs.gov/payments/pay-taxes- ... debit-card

SlowMovingInvestor
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Re: Federal Estimated Taxes

Post by SlowMovingInvestor » Fri Jan 12, 2018 6:01 pm

Pajamas wrote:
Fri Jan 12, 2018 4:48 pm
You probably are already aware, but just in case you're not, there are fees for using a debit or credit card.

https://www.irs.gov/payments/pay-taxes- ... debit-card
I am aware of the CC fees, but it's a very cheap way of getting the signup bonus, since I really don't have any other easy way to run up spend without actually (horrors !) spending, and I'm not willing to use ethically dubious (to me anyway) methods of manufacturing spending using gift cards or the like.

Invest4lt
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Re: Federal Estimated Taxes

Post by Invest4lt » Sat Jan 13, 2018 1:09 am

ivk5 wrote:
Thu Jan 11, 2018 5:53 am
With Direct Pay, I believe that's correct.

With EFTPS, I believe online payments need to be submitted by 8pm ET the prior business day.
Is that correct? EFTPS payments need to be submitted by 8pm ET the prior business day? That was today.

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Pajamas
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Re: Federal Estimated Taxes

Post by Pajamas » Tue Jan 16, 2018 9:38 am

SlowMovingInvestor wrote:
Fri Jan 12, 2018 6:01 pm
ethically dubious (to me anyway) methods of manufacturing spending using gift cards or the like.
I don't see any ethical problem with buying gift cards to meet a required spending amount on a credit card as long as it is allowed under the terms of the agreement. The credit card issuers aren't stupid and they know exactly how they are setting up their offers in order to make a profit. They could prohibit it if they wanted to. They make the same amount of money in fees as with any other spending you might do and the merchants are happy because selling gift cards is very profitable for them. The ethical problem that I see is that gift cards are so profitable at the consumer's expense because of the time value of money and the failure to redeem them.

SlowMovingInvestor
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Re: Federal Estimated Taxes

Post by SlowMovingInvestor » Tue Jan 16, 2018 11:25 am

Pajamas wrote:
Tue Jan 16, 2018 9:38 am
SlowMovingInvestor wrote:
Fri Jan 12, 2018 6:01 pm
ethically dubious (to me anyway) methods of manufacturing spending using gift cards or the like.
I don't see any ethical problem with buying gift cards to meet a required spending amount on a credit card as long as it is allowed under the terms of the agreement. The credit card issuers aren't stupid and they know exactly how they are setting up their offers in order to make a profit. They could prohibit it if they wanted to. They make the same amount of money in fees as with any other spending you might do and the merchants are happy because selling gift cards is very profitable for them. The ethical problem that I see is that gift cards are so profitable at the consumer's expense because of the time value of money and the failure to redeem them.
I didn't mean to imply that buying gift cards itself was ethically problematic. I was thinking more of methods I've heard about such as buying GCs and converting them to cash or MOs through various methods (other than selling them).

I don't know too many of the details, but I've read about people going to multiple stores in a chain, running up 100K a month, sometimes giving fake name, staying just below $10K reporting guidelines etc etc.

None of that is illegal (except possibly breaking up transactions to stay below 10k), but it does strike as ethically dubious.

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Pajamas
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Re: Federal Estimated Taxes

Post by Pajamas » Tue Jan 16, 2018 12:34 pm

SlowMovingInvestor wrote:
Tue Jan 16, 2018 11:25 am
e going to multiple stores in a chain, running up 100K a month, sometimes giving fake name, staying just below $10K reporting guidelines etc etc.

None of that is illegal (except possibly breaking up transactions to stay below 10k), but it does strike as ethically dubious.
I don't know about that. Using false names and going to multiple stores in a chain to structure transactions sounds illegal to me and would probably make it more difficult to claim innocence and plea bargain to stay out of a federal prison. It's not illegal in many places to carry a concealed weapon, but if you carry one while committing a crime, it might very well be.

If you are just buying a few thousand dollars worth of gift cards, I don't see an ethical problem with that. The credit card companies could easily exclude gift cards and cash advances from the bonus spending if they wanted to. Some like American Express already do.

Not trying to talk you into doing something you don't feel comfortable doing but I like to sleep well at night and it wouldn't bother me at all.

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