Author Topic: Charging Estimated Taxes on a Credit card  (Read 495 times)

NoNonsenseLandlord

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Charging Estimated Taxes on a Credit card
« on: July 29, 2017, 08:43:28 AM »
I assume that many people would think charging the taxes owed on a credit card would be foolish.  Here is what I do.

I have a Fidelity 2% cash back Visa card.  I can charge my taxes on my Visa card at pay1040.com.  They charge 1.87%.  "The convenience fee for this service is 1.87% of the tax payment amount for credit cards"

If I charge $5,000, I get two charges on my credit card.  One for $5,000.00 and another for $93.50.  I get 2% back from the $5,000 charge, or $100.  I also get 2% back from the $93.50 charge, or $1.87.  Total tax free money I just made is (($100 + $1.87) - $93.5) = $8.37.

A bit over $8 is not enough to get too excited over, but it is a free $8.  Do it 4x a year, and it is $33.48.  Most millionaires never made a million dollars at one time.  People make a million a few cents or dollars at a time.

kpd905

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Re: Charging Estimated Taxes on a Credit card
« Reply #1 on: July 29, 2017, 09:05:24 AM »
I paid my owed federal tax with that site this year.  I put $3,000 on a new Barclay Arrival+ card, paid $56.10 fee, but got roughly $588 credit toward travel expenses, so 17.4% cash back on my spending.
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Rubic

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Re: Charging Estimated Taxes on a Credit card
« Reply #2 on: July 29, 2017, 03:43:09 PM »
I would do it to hit minimum spend requirements for a credit card bonus, i.e. churning
for points/miles/cash.

It you decide to go this route, I'd recommend first contacting your bank and lowering
your cash advance limit to $100, so you'll be assured that the transaction is coded as
a purchase and not a cash advance.

DavidAnnArbor

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Re: Charging Estimated Taxes on a Credit card
« Reply #3 on: July 29, 2017, 08:23:52 PM »
Yes I do this too.