Update, 12/23/24: Did the IRS leak the processing fees for next year?

For a brief period of time, this IRS.gov page displayed the following:

The 1.75% rate would be a record low and continue the downward trend we have seen over the years, as documented below. If it is the 2025 rate, there would be an effective 0.921% spread between the rewards you can earn with BOFA Platinum honors and the cost to process a tax payment!

Notably, though, the page doesn’t mention the rate for PayUSAtax. Does that mean they won’t be offering tax payment processing in 2025? That would be a significant development, as you can only make two quarterly and annual payments per processor, leaving only two processors instead of three.

Or perhaps it doesn’t mention PayUSAtax because their rates weren’t finalized and the page was published early?

Or maybe it was just a test page, and those aren’t real rates at all?

We reached out to an IRS media relations spokesperson for comment when the page was live, and received a response 2 weeks ago that they were looking into it. In the meantime, the page was pulled and we haven’t received any further responses. This post will be updated if we do receive a response. 

Update, 9/16/24: Q3 estimated tax payments are due today. Which card will you use to come out ahead of the fees?

Update, 6/17/24: Q2 estimated tax payments are due today. Which card will you use to come out ahead of the fees?

Update, 4/15/24: It’s tax day, which card will you use to make a payment?

Originally posted on 1/1/24:

Paying taxes on a credit card:

Credit card processing fees are updated annually on January 1st.

Luckily not everything is subject to inflation. You can now pay just 1.82% to process your tax payment via credit card! You can make estimated payments at any time. 2023 Q4 estimates are due 1/16/24.

If you aren’t able to use your card to make a payment, try paying via Paypal.

Here is a history of what credit card processing fees for taxes have cost:

• 2003-2009: 2.49%
• 2010: 1.95%
• 2011: 1.9%
• 2012: 1.89%
• 2013: 1.88%
• 2014-2020: 1.87%
• 2021: 1.96%
• 2022: 1.87%
• 2023: 1.85%
• 2024: 1.82%

• You can make 2 payments per credit card processor for each quarterly estimate (1040-ES), which are typically due on April 15, June 15, September 15, and January 15.
• You can make 2 payments per credit card processor for your year end bill (1040).
• You can make 2 payments per credit card processor for an extension of time to file (4868).
• You can make 2 payments per credit card processor for past amended returns (1040X).
• You can make another 2 payments each time per credit card processor by using a spouse’s information to pay, though you may have to call the IRS to confirm that they link that payment to your joint return as that doesn’t always happen automatically. You can also call the IRS to reallocate payments.

You can view all previous tax payments made to the IRS here.

The tax payment fee may be considered a business expense, which will significantly change the math below based on your marginal tax rate. Be sure to speak to a tax professional about that.

Tax payments are considered a regular purchase, not a cash advance.

You can also request a refund for any overpayment and the IRS will cut you a check or a direct deposit into your checking account. You may even wind up getting paid interest by the IRS if the refund check is delayed.

You can also request that up to $5,000 of overpayments per return be converted into I Bonds. That’s on top of the regular $10,000 per person limit for I Bonds purchases.

Best Cards To Pay Taxes With:

If you open a new card, it can be a no brainer to pay taxes to help reach a signup bonus. But even if you don’t have a new card, it can still make sense to pay your taxes with a credit card for the rewards and the extra time to pay.

In order to determine if it’s worth earning miles at a 1.82% rate, you’ll need to assign a value to each currency. Values are highly subjective and will vary based on what you use the miles for, so YVMV (Your valuation may vary!).

• The Bank of America® Unlimited Cash Rewards credit card earns 2.625% cash back if you have Platinum honors status as described here, so you’ll come out .805% ahead of the 1.82% tax processing fee. There are no limits on the 2.625% cash back.
  • A $5,000 tax payment will cost $91, but you will earn $133.64 cash back.
  • A $10,000 tax payment will cost $182, but you will earn $267.28 cash back.
  • A $100,000 tax payment will cost $1,820, but you will earn $2,672.78 cash back.

• The Ink Business Premier® Credit Card earns 2.5% cash back on $5,000+ purchases and 2% cash back on small purchases, so you’ll come out .68% ahead of the 1.82% tax processing fee on $5,000+ payments. There are no limits on the 2.5% cash back. Note that this card doesn’t earn transferable points like other Chase Ink cards.
  • A $5,000 tax payment will cost $91, but you will earn $127.28 cash back.
  • A $10,000 tax payment will cost $182, but you will earn $254.55 cash back.
  • A $100,000 tax payment will cost $1,820, but you will earn $2,545.50 cash back.

• The Blue Business℠ Plus Credit Card from American Express offers 2 points per dollar spent everywhere. 
  • A $10,000 tax payment will cost $182, but you will earn 20,364 points. If you value your AMEX points at 1.5 cents each, that a value of $305.46 worth of points. You can transfer those points into miles with airlines like Avianca, British Airways, Delta, Singapore, Virgin Atlantic, and more.
  • Note that you only earn 2 points per dollar on $50,000 of annual spending, though if you have multiple primary cards they would get 2 points per dollar on $50,000 of annual spending on each card.

• The Chase Ink Business Unlimited Card earns 1.5 Chase Ultimate Rewards points per dollar spent everywhere.
  • A $10,000 tax payment will cost $182, but you will earn 15,273 points. If you value your Chase points at 1.6 cents each, that a value of $244.37 worth of points. If you or someone in your household has a Sapphire Preferred, Sapphire Reserve, or Ink Preferred then you can transfer points to one of those cards and from there to airlines like United and hotel programs like Hyatt. Alternatively if you have a Sapphire Reserve you can also redeem those points for 1.5 cents each towards travel, while having the Sapphire Preferred or Ink Preferred would also you to redeem those points for 1.25 cents each towards travel.

• The Chase Freedom Unlimited® card earns at least 1.5 Chase Ultimate Rewards points per dollar spent everywhere and 3 points per dollar spent during the first year of cardmembership on up to $20K of spending via this link. No annual fee.
  • With an existing card, a $10,000 tax payment will cost $182, but you will earn 15,273 points. If you value your Chase points at 1.6 cents each, that’s a value of $244.37 worth of points.
  • If you get this card with an offer to earn 3 points per dollar, a $10,000 tax payment will cost $182, but you will earn 30,546 points. If you value your Chase points at 1.6 cents each, that’s a value of $488.74 worth of points. If you or someone in your household has a Sapphire Preferred, Sapphire Reserve, or Ink Preferred then you can transfer points to one of those cards and from there to airlines like United and hotel programs like Hyatt. Alternatively if you have a Sapphire Reserve you can also redeem those points for 1.5 cents each towards travel, while having the Sapphire Preferred or Ink Preferred would also you to redeem those points for 1.25 cents each towards travel.

• The Business Platinum Card® from American Express offers 1.5 points per dollar spent everywhere on transactions that are $5,000 or more.
  • A $10,000 tax payment will cost $182, but you will earn 15,273 points. If you value your Business Platinum AMEX points at 1.5 cents each, that a value of $229.10 worth of points. You can transfer those points into miles with airlines like Avianca, British Airways, Delta, Singapore, Virgin Atlantic, and more.
  • You can earn 1.5 points per dollar on up to $2,000,000 of annual spending.
  • Having this card allows you to get 35% of your AMEX points rebated on all business/first paid airfare and on coach airfare with the airline of your choice, up to 1,000,000 bonus points per calendar year.

• The Capital One Venture X Rewards Credit Card, The Capital One Venture Rewards Credit Card, and The Capital One Spark Miles for Business earn 2 Capital One miles per dollar spent everywhere.
  • A $10,000 tax payment will cost $182, but you will earn 20,364 Capital One miles. If you value your Capital One miles at 1.5 cents each, that a value of $305.46 worth of points. You can transfer those points into miles with airlines like Avianca, Flying Blue, Turkish, Singapore, Qantas, and more.

• The Citi Double Cash® Card earns 2% cash back, so you’ll come out .18% ahead of the 1.82% tax processing fee. Even if you don’t want to deal with the miles aspect of this, the 2% cash back makes it a no brainer to use.
  • You can also transfer points from this card to a Citi Premier® Card, from where you can transfer points to airlines like JetBlue, Turkish, Qantas, and more. A $10,000 tax payment will cost $182, but you will earn 20,364 Citi ThankYou points. If you value your Citi ThankYou points at 1.4 cents each, that a value of $285.10 worth of points. If you also have a Citi Rewards+® Card you’ll get a 10% rebate on point redemptions and transfers, making the points even more valuable!

• Capital One Spark Cash Plus earns 2% cash back, so you’ll come out .18% ahead of the 1.82% tax processing fee. Even if you don’t want to deal with the miles aspect of this, the 2% cash back makes it a no brainer to use.
  • A $10,000 tax payment will cost $182, but you will earn 20,364 Capital One points. If you value your Capital One points at 1.5 cents each, that a value of $305.46 worth of points.

Big welcome bonuses:

It can definitely make sense to pay your taxes via credit card if you are signing up for a card and are trying to reach a spend threshold to earn a signup bonus that you won’t be able to reach without some help. The 1.82% fee pales in comparison to earning a mega signup bonus as well as the regular miles for the purchase.

Chase:

• Chase Sapphire Preferred® Card has a 60K signup bonus for spending $4K in 3 months, earns 2.1 points per dollar on travel after the card's 10% anniversary bonus, 3.1 points per dollar on dining, streaming, and online groceries after the card's 10% anniversary bonus, has a $50 hotel credit, can transfer all Chase points into miles, and points are worth at least 1.25 cents each for paid travel ($95 annual fee). Read more here.
• Chase Sapphire Reserve® has a 60K signup bonus for spending $4K in 3 months, earns 3 points per dollar on dining/travel, has a $300 travel credit, can transfer all Chase points into miles, and points are worth at least 1.5 cents each for paid travel ($550 annual fee with $300 travel credit). Read more here.
• Ink Business Preferred® Credit Card has a 90K signup bonus for spending $8K in 3 months, and earns 3 points per dollar on up to $150K of annual spending on shipping, advertising, and travel, can transfer all Chase points into miles, and points are worth at least 1.25 cents each for paid travel ($95 annual fee). Read more here.

• Ink Business Unlimited® Credit Card has a $750 signup bonus in the form of 75K points for spending $6K in 3 months, and earns 1.5 points per dollar on business purchases ($0 annual fee). Read more here.
• Ink Business Cash® Credit Card has a $350 signup bonus in the form of 35K points for spending $3K in 3 months and another $400 signup bonus in the form of 40K bonus points for spending another $3K in 6 months for a total of 75,000 Chase Ultimate points, plus if you have a Chase business checking account open on the card's first anniversary you will get a 10% points bonus on all earnings from card spending, this card earns 5 points per dollar on the first $25,000 in combined purchases on cable, TV, telecom, cellular, and office supply stores, plus 2 points per dollar on dining and gas on up to $25,000 in purchases ($0 annual fee). Read more here.
• Chase Freedom Flex has a 20K signup bonus, plus 5 points on rotating categories, 5 points per dollar on travel purchased through Chase Travel, and 3 points per dollar on dining and drugstores ($0 annual fee). Read more here.
• Chase Freedom Unlimited® has a signup bonus that earns an extra 1.5% cash back in the form of 1.5 points per dollar everywhere on up to $20K of spending during your first year, on top of at least 1.5 points per dollar everywhere, 5 points per dollar (marketed as 5% cash back) on travel purchased through  Chase Travel℠, and 3 points per dollar on dining and drugstores ($0 annual fee). Read more here.

AMEX:

• The Blue Business® Plus Credit Card from American Express is offering a rare bonus to earn 15,000 Membership Rewards® points after you spend $3,000 in eligible purchases on the Card within your first 3 months of Card Membership and offers 2 points per dollar spent on up to $50K spending annually 1 point per dollar thereafter, plus transfer points to airlines and hotels and keep AMEX points alive. Terms apply. Read more here.
• The Business Platinum Card® from American Express is offering a 150K bonus for spending $20,000 in 3 months and offers monthly credits, lounge access, and much more. Terms apply. Read more here.
• American Express® Business Gold Card is offering a 100K bonus for spending $15,000 in 3 months, monthly business credits, Walmart+ membership, up to 4 points per dollar spent with a $150K annual spend cap, and more benefits. Terms apply. Read more here.
• The Platinum Card® from American Express is offering an 80K bonus for spending $8,000 in 6 months and offers monthly credits, lounge access, and much more. Terms apply. Read more here.
• American Express® Gold Card is offering a 60K bonus for spending $6,000 in 6 months,  monthly credits for Uber and Grubhub, and more. Terms apply. Read more here. 
• AMEX Green Consumer Card is offering a 40K bonus for spending $3,000 in 6 months and offers up to $199 in annual CLEAR Plus® credits, $100 LoungeBuddy credit, plus transfer points to airlines and hotels and keep AMEX points alive. All information about the AMEX Green Card has been collected independently by DansDeals.

Capital One:

• Capital One Venture X Rewards Credit Card is offering 75,000 bonus miles for spending $4K in 3 months, plus earn 2 miles per dollar spent on every purchase, $300 annual travel credit for bookings through Capital One Travel, 10K anniversary bonus miles, Global Entry/Pre-Check, Capital One lounge access, Priority Pass Lounge membership, Hertz President's Circle status, free lounge access and status for free additional cardholders, transfer miles to airlines and hotels, 5K MLB redemptions, and more. $395 annual fee. Read more here.
• Capital One Venture X Business is offering 150,000 bonus miles for spending $30K in 3 months, plus earn 2 miles per dollar spent on every purchase, $300 annual travel credit for bookings through Capital One Travel, 10K anniversary bonus miles, Global Entry/Pre-Check, Capital One lounge access, Enhanced Priority Pass Lounge membership, transfer miles to airlines and hotels, 5K MLB redemptions, and more. $395 annual fee. Read more here.
• Capital One Venture Rewards Credit Card is offering 75,000 bonus miles for spending $4K in 3 months, plus 2 miles per dollar spent on every purchase, transfer points to airlines and hotels, 5K MLB redemptions, and more. $95 annual fee. Read more here. 
• Capital One VentureOne Rewards Credit Card is offering 20,000 bonus miles for spending $500 in 3 months, transfer miles to airlines and hotels, 5K MLB redemptions, and more. No annual fee.
• Capital One Spark Miles for Business is offering 50,000 bonus miles for spending $4,500 in 3 months, 2 miles per dollar spent on every purchase, Global Entry/PreCheck, transfer miles to airlines and hotels, 5K MLB redemptions, and more. $0 intro annual fee for the first year, then $95.
• New offer: Capital One Spark Cash Plus is offering $2,000 cash back (convertible to 200,000 miles) for spending $30,000 in 3 months, plus get another $2,000 cash back for every $500K spent in your first year, 2% back everywhere, $40 MLB redemptions, annual fee refund when you spend $150K/year, and more. $150 annual fee.

Earn Status And More!

Earn Southwest elite status and Companion Pass:

• The Southwest® Rapid Rewards® Premier Business Credit Card, Southwest® Rapid Rewards® Performance Business Credit Card, Southwest Rapid Rewards® Premier Credit Card, Southwest Rapid Rewards® Priority Credit Card, or Southwest Rapid Rewards® Plus Credit Card gives companion pass status with unlimited free uses until the end of the next calendar year if you earn 125K points in a year across all Southwest cards if you hold a card by 1/1/24, otherwise you’ll need 135K points. The cards also offer 1.5K tier points towards A-List status for every $5K spent, with no cap on earnings.
  • Southwest points are a fixed value currency, so there are no aspirational aspects to this program as points will typically be worth between 1.3-1.6 cents each. You’ll need to determine how to value having Companion Pass and A-List status to see if its worth putting tax payments on this card.

Earn Hyatt elite status, upgrades, and bonus free nights:

• The Chase World Of Hyatt Consumer Credit Card offers a 2nd annual anniversary night if you spend $15K in a calendar year.
• This card also offers 5 elite qualifying night credits every year and you’ll earn an additional 2 night credits towards elite status with every $5,000 that you spend.

• The Chase World Of Hyatt Business Credit Card earns 5 night credits towards elite status with every $10,000 that you spend. 
• It also offers a 10% rebate on award stays, up to 20K rebated points, after you spend $50,000 on the card in a calendar year.

I value Hyatt points at about 1.5 cents each, so depending on how many additional free nights and elite status benefits you can rack up and how you value those free nights and benefits, it can make sense to put tax payments on this card.

As of today, you can also earn new milestone benefits described here.

Earn Delta elite status:

• The Delta Platinum Consumer and Delta Platinum Business cards offer 1 MQD per $20 spent and 2,500 MQDs each just for having them. You can earn Silver with 5,000 MQDs, Gold with 10,000 MQDs, Platinum with 15,000 MQDs, or Diamond with 28,000 MQDs.
• The Delta Reserve Consumer and Delta Reserve Business cards offer 1 MQD per $10 spent and 2,500 MQDs each just for having them. You can earn Silver with 5,000 MQDs, Gold with 10,000 MQDs, Platinum with 15,000 MQDs, or Diamond with 28,000 MQDs.
  • I value Delta miles at about 1 cent each. You’ll need to determine how to value earning qualifying miles and the flight spending requirement waiver to see if its worth putting tax payments on this card.
  • Here is how many MQMs you need to earn Delta status.
  • Here is how you can earn Delta status with no spending.

Earn United elite status:

• The United℠ Business Card, Chase United Business Club Card, and United℠ Explorer Card earn 25 PQPs for every $500 spent, up to 1,000 PQP for spending $20K.
• United Quest℠ Card earns 25 PQPs for every $500 spent, up to 6,000 PQP for spending $120K.
• United Club℠ Infinite Card earns 25 PQPs for every $500 spent, up to 10,000 PQP for spending $200K.
• The discontinued Presidential Plus Card earns 25 PQPs for every $500 spent, up to 10,000 PQP for spending $200K.
  • I value United miles at about 1.4 cents each. You’ll need to determine how to value earning qualifying miles and the flight spending requirement waiver to see if its worth putting tax payments on this card.
  • Here is how many PQPs you need for status.

Earn AA elite status and companion certificates:

• The Citi Business AA Platinum card offers a free domestic companion certificate for spending $30K/year and earns 1 loyalty point per dollar spent to earn AA status.
• The Citi AA Executive card earns 1 loyalty point per dollar spent to earn AA status plus earns a bonus 10K loyalty points for earning 50K loyalty points in a year and another bonus 10K loyalty points for earning 90K loyalty points in a year.
• The Citi AA Platinum Consumer card earns 1 loyalty point per dollar spent to earn AA status, plus offers a $125 AA flight discount if you spend $20K/year.
• The Citi AAdvantage MileUp Consumer Mastercard earns 1 loyalty point per dollar spent to earn AA status.
• You’ll need to earn 39K loyalty points for Gold, 74K for Platinum, 124K for Platinum Pro, and 199K for Executive Platinum status after the 1K bonus. At 175K loyalty points you can choose 25K bonus miles or 2 systemwide upgrades, and at 250K loyalty points you can choose 60K bonus miles or 4 systemwide upgrades.
  • I value AA miles at about 1.4 cents each, so if you’re paying taxes at a cost of 1.82 cents each, that would be valuing each loyalty point at roughly 0.42 cents each, but at 175K and 250K that cost goes down if you select 25K miles or 60K miles. That would put the cost of Gold status at $168, Platinum at $315, Platinum Pro at $525, or Executive Platinum 200K at $490 after backing out the 25K bonus miles or Executive Platinum 250K at negative $140 after backing out the 85K bonus miles. Status earned starting 3/1/24 would be valid through 3/31/26.
  • Read more here.

Earn Marriott elite status and bonus free nights:

• The Marriott Bonvoy Business® American Express® Card offers a 2nd annual free night for spending $60K in a calendar year.
• The Marriott Bonvoy Brilliant Consumer AMEX offers a 2nd 85K award night for spending $60K in a calendar year.
• The discontinued Ritz-Carlton card offers Platinum status for spending $75K in a calendar year. You’ll need to determine how to value having Platinum status to see if its worth putting tax payments on this card.
  • I value Marriott points at about 0.6 cents each, so depending on how many additional free nights and elite status benefits you can rack up and how you value those free nights and benefits, it can make sense to put tax payments on this card.

Earn JetBlue elite status:

• JetBlue cards offer 1 (Mosaic qualifying) tile for every $1,000 spent. Spend $50K for Mosaic Tier 1, $100K for Tier 2, $150K for Tier 3, or $200K for Tier 4.
  • JetBlue points are a fixed value currency, so there are no aspirational aspects to this program as points will typically be worth between 0.9-1.3 cents each. You’ll need to determine how to value having Mosaic status to see if its worth putting tax payments on this card.

Earn Air Canada Aeroplan status or a companion pass:

• The Chase Aeroplan® Credit Card offers 25K status for spending $15K/year through the following calendar year.
• If you spend $50K in a calendar year you will gain a level of status.
• Upon spending $100,000, $250,000, $500,000 and $750,000 in a calendar year you’ll earn a 50% off Priority Rewards redemption certificate.
• If you spend a whopping $1,000,000 in a year you’ll get a companion pass that allows unlimited free companion award travel systemwide in any class of service. That pass will be valid for the rest of the calendar year in which you spend the million bucks and for the following calendar year.
  • I value Aeroplan miles at about 1.3 cents each. You’ll need to determine how to value earning qualifying miles and the flight spending requirement waiver to see if its worth putting tax payments on this card.

Earn a British Airways companion pass:

• The British Airways Visa Signature® Card offers a free one-time use companion pass for spending $30K/year. 
• The free companion pass is valid on BA award tickets worldwide, though fuel surcharges will apply. You can now also get 50% off an award for 1 person if you don’t have a companion.
  • I value BA Avios at about 1 cent each. You’ll need to determine how to value the companion pass to see if its worth putting tax payments on this card.

Earn an Aer Lingus companion pass:

• The Aer Lingus Visa Signature® Card offers a companion ticket good when booking a paid economy Aer Lingus ticket if you spend $30,000 in a calendar year. 

Earn a $1,000 Iberia voucher:

• The Iberia Visa Signature® Card: offers a $1,000 discount voucher off 2 tickets on the same Iberia flight if you spend $30,000 in a calendar year.

Earn Hilton elite status and bonus free nights:

• The AMEX Hilton Honors Surpass card offers a free annual night for spending $15K/year and Diamond status for spending $40K/year.
• The AMEX Hilton Honors Aspire card offers a 2nd free annual night for spending $30K/year and a 3rd free night for spending $60K/year.
• Spending on all Hilton cards count towards Elite tier qualification and Lifetime Diamond Status. Learn more about elite status here and lifetime diamond status here.
• Read more on these cards here and here.
  • I value Hilton points at about 0.45 cents each. You’ll need to determine how you value the free night and status benefits to determine if it’s worth putting tax payments on this card.

Is it worth it?

If you’re coming out ahead of the cashback earned on a card, this is a no-brainer.

As for earning miles, it all depends on what you do with your miles. This isn’t the cheapest way to earn miles, but it’s painless. The ability to overpay your taxes to reach a threshold is also helpful.

The value of airline miles is huge if you fly last-minute, one-way, or in business or first class internationally.

• If I need a last minute short-haul flight like Cleveland-NYC that can cost $500 each way, I can instantly transfer 6K miles to Air Canada, 6K points to Qatar, 6.5K points to Avianca Lifemiles for travel on United or 8.25K points to British Airways to book a short-haul on American with no last minute booking fees. That’s a value of up to 7 cents per point.
• With 10K Turkish miles I can book a one-way flight on United to anywhere in the US, even Hawaii or Alaska. In business class it’s just 15K miles each way!
• 86K points transferred to Singapore is enough for a ticket in a private couples suite on an A380 one-way from JFK to Frankfurt with no fuel surcharges.
• If I want to fly in a $25,000 ANA First Class Suite round-trip from the US to Tokyo, I can instantly transfer 145K or 170K points to Virgin Atlantic. That’s a value of up to 18 cents per point.
• If I want to stay in a 5 star Park Hyatt in the Maldives, Melbourne, NYC, Paris, Sydney, or Tokyo that would cost over $1,200/night, I can instantly transfer 20K-40K points to Hyatt to do that, a value of up to 6 cents per point.
• Learn more about which points transfer to which airlines and how long those transfers will take here.

Which card do you use to you pay your taxes? Or is it too pricey of a method to get miles? Sound off in the comments!