Login to Your Account
No Account?
+ Reply To This
Results 1 to 2 of 2
  1. #1
    Registered User New Member

    Paying Income Taxes with Credit Card if you are self employed?

    Has anyone considered paying Federal income tax with a credit card if you are self employed?

    There is a surcharge for doing this but I think the value of the points for redeeming for travel is at or above the surcharge.

    Here is a brief calculation.

    Say you have an Amex Business Platinum Card.

    Generally points are worth 1.8 cents per point based on valuations from various online blog sites. I have personally gotten at least 3-4 cents in value for Amex points transfering them to airlines to redeem for business or first class tickets for vacation.

    If you use the fee to pay with credit card is 1.87% which is almost break even.

    NOW*** Keep in mind if your tax bill is over $5000 dollars the Platinum gives you 1.5 Times the points so if your tax bill is $5000. You would earn $7500 Amex Member rewards points. These would be worth at least

    7500 X .018 = $135 dollars

    Cost of paying $5000 in taxes through = $93.50

    This is effectively buying amex points for .012 cents per dollar which is a price point that is absolutely below market especially since with the new Amex Platinum card you can redeem all points at 2 cents per dollar.

    That is what I think the best example is but others may use Miles cards for Delta, American, or United, or Chase Saphire, or Starwood Preferred Guest.

  2. Paying Income Taxes with Credit Card if you are self employed?
  3. #2
    Registered User Junior Member
    Interesting. I get a refund so this doesn't apply to me but never really took into account the value of points being worth more than a fee when purchasing.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts