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Paying Taxes with a Credit Card
Because of the recent sale of my home, I have to pay a large amount of federal and state taxes this year. The total amount is about $260K. I have the option to pay with a major credit card incurring a 1.87% fee. In my case, I could use my AMEX Platinum card, my Platinum Delta SkyMiles card, my Starwood Preferred Guest card, or my Chase Sapphire Reserve. Is there any real benefit to using one of these cards to pay my taxes?
You’d just get a boatload of points you wouldnt other wise have. $4800+ is a heck of a fee though.
With the Delta card, you’d get the Diamond MQD waiver for spending $250k on the card, if that works for you. Otherwise, use the Amex SPG or Chase Freedom Unlimited to pay. SPG gives you 5k bonus miles when you transfer 20k. Chase Freedom Unlimited is 1.5x on all purchases. Oh, if you have the amex plat BUSINESS card, each charge that’s above $5k earns 1.5x MR points.
~265k star points (becomes ~330k when transferred to most airline programs), when charging to the Amex SPG
~398k Chase UR points when charged to the Chase Freedom Unlimited. Since you have the Chase Sapphire Reserve card, those points can be transferred to airlines. They are also worth almost $6000 when using pay with points to book travel via their portal, so you’d more than make up for the 1.87% fee
~398k Amex MR points, when using the Amex Platinum Biz. Transferable to airlines. If you book a ticket (for business or first class) via their travel portal and pay with points, you get 35% if the points back, plus you’d earn your normal airline miles with the ticket.
You’re also more than welcome to spread out the charges and maybe apply for some new cards to pick up bonuses. The Amex Platinum biz is offering 50k bonus on the first $10k spent and an additional 25k bonus on the next $10k spent on the card within the first 3 months.