Would you like to know how to earn air miles at the same time as paying your dreaded end of year tax bill? Simply really, arrange to pay your tax bill on your credit card!
Which tax bills can I pay on my credit card?
Depending on exactly where you live, you should be able to pay both your federal and state personal income taxes with your card.
How do I pay my tax bills on my credit card?
Actually paying your tax bill on your credit card could not really be any easier, you simply prepare your personal income tax return (either federal or state, as the case may be), then file the return electronically using the IRS’s e-file system or by regular mail and in your return you detail that your are going to pay the outstanding tax invoice with the nominated credit card service provider.
Why should I use my credit card to pay my tax bill?
Well, there are a number of reasons why you should use your credit card to pay your tax bill. Chief among these are:
- less chance of getting an error notice from the IRS
- you have the option to file completely paperless returns using the PIN system
- you should receive an electronic acknowledgement from the IRS within 48 hours of the IRS accepting your tax return for processing
- you can arrange to prepare both your federal and state tax returns at the same time, saving you time and effort
- you can maintain a higher level of personal security
- and, best of all, the chances are that you will receive a refund in half the time it would normally take.
Is there anything I should be aware of?
Yes; one note of caution is that you check with your credit card provider to see whether or not they will treat the transaction as cash drawdown on your credit card, subject to service fees and immediately accruing interest. Nevertheless, if you are looking to accrue air miles on your credit card, then paying your tax bill on your card could be a good place to start!
