How can I benefit from this much in taxes? I have the cash on hand but I also want to maximize my payment…
I’ve heard of paying through a credit card and racking up points… anything else I can do?
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comments
Used to be a golden opportunity last year using PayPal key which counted as a debit card but was a proxy to your cc so you just had to pay a flat $2.20 fee, but sadly PayPal key went away 😭
You can sign up for a new cc and use this to hit the sign up bonuses. There’s a few that give outsized bonuses for large spends like 20k+ for the first year that you can easily hit with this tax payment. You can also split and use two cards per payment processor for one tax payment and there are three of those so you can do up to 6 sign up bonuses this way.
You can buy visa gift cards that count as debit cards and use that to pay taxes at the flat fee, although the largest denomination is 1k so you are capped to paying 5k this way at the lower fee and the rest you have to use your cc directly.
Pay USA tax allow PayPal payments and discover had 5% cash back category on this but limited to $1500.
Supposedly the best is nearside debit which is giving unlimited 2.2% cash back for using its debit card until 2023. Since it’s a flat $2.20 fee, this can potentially work but need to double check tax payments work.
Look at this for more information about it all: https://frequentmiler.com/pay-taxes-via-credit-card/#
In short use your cc to do it, and ideally if you find a debit card way and still earn cc rewards then you hit the jackpot. But you are just saving 2% or so typically this way.
I don’t think there really is an optimal way really. More like cutting your loss. Credit card payments to IRS seem to charge 1-2% fee (and also assuming you have the credit limit)
If people want to take advantage of 0% APR to pay their taxes, to get points, sign up bonus etc, i usually suggest them to do that by signing up for a business card instead of a personal. The above is not a problem for business cards.