Primer on Paying Taxes With a Credit Card

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ZinCO
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Re: Primer on Paying Taxes With a Credit Card

Post by ZinCO »

international001 wrote: Tue Jan 12, 2021 7:13 pm So each processor can classify the payment under a different category? How to know in advance?
Assuming you are talking about the BoA Cash Rewards card, I believe they start with any charge with Card Not Present (implies online or I guess phone order), then they have a long list of exclusions to drop charges they don't want to support the bonus for. That's in contrast to other cards that use the MCC of the vendor to determine travel, dining, etc.

So in answer to your question, how to know in advance? You ask people on a site like this to find out what worked for others.
international001
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Re: Primer on Paying Taxes With a Credit Card

Post by international001 »

Yes BoA cash Rewards.

I have other BoA cards (not cash Rewards). It doesn't tell me to which categories purchases belong (just if there is any bonus). Some times purchasing a plane ticket gets the travel bonus, sometimes it doesn't (depending on the merchant).

But all purchases must have associated a category, right? What category could be for taxes other than 'Card Not Present' ?
djheini
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Location: Boston area

Re: Primer on Paying Taxes With a Credit Card

Post by djheini »

international001 wrote: Thu Jan 14, 2021 7:43 pm Yes BoA cash Rewards.

I have other BoA cards (not cash Rewards). It doesn't tell me to which categories purchases belong (just if there is any bonus). Some times purchasing a plane ticket gets the travel bonus, sometimes it doesn't (depending on the merchant).

But all purchases must have associated a category, right? What category could be for taxes other than 'Card Not Present' ?
They are two completely separate things. A sample charge details from the BoA site on my cash rewards (click the little arrow next to the transaction on your transaction history:

Code: Select all

Merchant description:	CHARITABLE AND SOCIAL SERVICE ORGANIZATIONS
Transaction Category: Giving: Giving
Online Purchase:	Y
So in order to count it would have to have the Online Purchase flag set (by being a card not present transaction), and not be in a category that BoA excludes for the bonus
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whodidntante
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Re: Primer on Paying Taxes With a Credit Card

Post by whodidntante »

I do not know of any card that considers Federal tax payments a bonus category. But here are some examples of how you can earn more:

- A sign-up bonus on a new credit card
- Utilize the 5% Paypal bonus that comes up for Discover and Chase Freedom cards about once per year. There is one processor that accepts Paypal, and it works to trigger the Paypal bonus.
- A targetted spending bonus, such as the ones that are frequently offered to Fidelity Rewards cardholders.
- Purchase discounted pre-paid Visa or Mastercard debit cards under a category bonus, e.g. grocery store, drug store, office supply store, etc. with certain cards. Then use the debit cards to pay your taxes for a lower fee.
czaj
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Re: Primer on Paying Taxes With a Credit Card

Post by czaj »

Anyone considering trying for the Southwest Companion Pass for 2021-2022? There is an 80k offer on the Southwest credit card, combined with 25k Companion Pass qualifying points that they're giving to everyone. It still would require $20k spending, but doable (at least for me) for prepaying 2022 taxes.

However, before knowing about this, I had just applied for the Hyatt card (for 50k bonus points) in December, so hoping I can apply and approved for the Chase Southwest credit card in early February. (I've only gotten 3 cards within the last two years)
international001
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Re: Primer on Paying Taxes With a Credit Card

Post by international001 »

djheini wrote: Thu Jan 14, 2021 7:58 pm
international001 wrote: Thu Jan 14, 2021 7:43 pm Yes BoA cash Rewards.

I have other BoA cards (not cash Rewards). It doesn't tell me to which categories purchases belong (just if there is any bonus). Some times purchasing a plane ticket gets the travel bonus, sometimes it doesn't (depending on the merchant).

But all purchases must have associated a category, right? What category could be for taxes other than 'Card Not Present' ?
They are two completely separate things. A sample charge details from the BoA site on my cash rewards (click the little arrow next to the transaction on your transaction history:

Code: Select all

Merchant description:	CHARITABLE AND SOCIAL SERVICE ORGANIZATIONS
Transaction Category: Giving: Giving
Online Purchase:	Y
So in order to count it would have to have the Online Purchase flag set (by being a card not present transaction), and not be in a category that BoA excludes for the bonus
THanks, I never bothered to click that arrow.

I see now why a flight I bougth didn't get the travel bonus. It had the category 'Shopping & Entertainment: Clothing/Shoes'. I guess because I bougth it in the travel agency of a retail store. So would a given merchant always classify its transactions with the same category, regardless of what you buy or in which category you do it?

But if you select 'online' for BoA Cash Rewards, what you need? 'Online Purchase: Y', I guess. But you say also certain categories? I see when I paid, my taxes the category was 'Finance: Taxes '. Is that excluded from the bonus? Is there a list of categories excluded.


Interestingly you can edit the category? Does this have any meaning for the rewards?
djheini
Posts: 111
Joined: Fri Jul 29, 2016 5:53 pm
Location: Boston area

Re: Primer on Paying Taxes With a Credit Card

Post by djheini »

international001 wrote: Sat Jan 16, 2021 7:23 pm
djheini wrote: Thu Jan 14, 2021 7:58 pm
international001 wrote: Thu Jan 14, 2021 7:43 pm Yes BoA cash Rewards.

I have other BoA cards (not cash Rewards). It doesn't tell me to which categories purchases belong (just if there is any bonus). Some times purchasing a plane ticket gets the travel bonus, sometimes it doesn't (depending on the merchant).

But all purchases must have associated a category, right? What category could be for taxes other than 'Card Not Present' ?
They are two completely separate things. A sample charge details from the BoA site on my cash rewards (click the little arrow next to the transaction on your transaction history:

Code: Select all

Merchant description:	CHARITABLE AND SOCIAL SERVICE ORGANIZATIONS
Transaction Category: Giving: Giving
Online Purchase:	Y
So in order to count it would have to have the Online Purchase flag set (by being a card not present transaction), and not be in a category that BoA excludes for the bonus
THanks, I never bothered to click that arrow.

I see now why a flight I bougth didn't get the travel bonus. It had the category 'Shopping & Entertainment: Clothing/Shoes'. I guess because I bougth it in the travel agency of a retail store. So would a given merchant always classify its transactions with the same category, regardless of what you buy or in which category you do it?

But if you select 'online' for BoA Cash Rewards, what you need? 'Online Purchase: Y', I guess. But you say also certain categories? I see when I paid, my taxes the category was 'Finance: Taxes '. Is that excluded from the bonus? Is there a list of categories excluded.


Interestingly you can edit the category? Does this have any meaning for the rewards?
Yes, I think the "Transaction category" is just for your own display/recordkeeping. What they call merchant description seems to be the merchant category code that determines what bonus categories it qualifies for (or is disqualified for).

There is a list of exclusions on page 4-5 of https://www.managerewardsonline.bankofa ... 02_ADA.pdf . Government Services and Taxes is listed as one of the high level excluded categories from the online shopping bonus.

I think most brick and mortar stores generally have one category that all purchases there go into, though it gets fuzzy where some places may be separate merchants with their own MCC (e.g. starbucks or optical department in a big box store).

Edit to add: Visa has a tool where you can look up a merchant's MCC at https://www.visa.com/supplierlocator-ap ... er-locator . If you're using a BoA Cash Rewards Mastercard no guarantees it'll match 100% but is a good place to start
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