The Money Mustache Community
Learning, Sharing, and Teaching => Taxes => Topic started by: NoNonsenseLandlord on July 29, 2017, 08:43:28 AM
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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.
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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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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.
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Yes I do this too.