Earn a Profit Paying Taxes With This Valuable 2-Card Combo!

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There’s a 2-card combination that can make paying your taxes a little less painful!

Folks with the Chase Sapphire Reserve and Freedom Unlimited cards can actually earn a profit paying their taxes.

Even with processing fees, you’ll come out ahead when you pay your taxes with the no-annual-fee Freedom Unlimited card and then transfer the Chase Ultimate Rewards points to your Sapphire Reserve account to redeem for travel.

Pay Taxes With A Credit Card And Earn A Profit
Combine the Perks of Your Chase Freedom Unlimited and Sapphire Reserve Cards to Pay Taxes and Earn a Profit When You Redeem Points for Big Travel to Places Like Southern California!

Million Mile Secrets team member Keith uses this strategy to come out ahead with payments he’s already making!

How to Pay Taxes With a Credit Card

Link:   IRS Pay Taxes With a Credit or Debit Card 

Link:   How (and When!) to Use a Credit Card to Pay Your Taxes

The IRS allows you to pay taxes with a credit card.  But you must use a 3rd-party payment processor.  You can NOT pay the government directly using a credit card.

There are 2 approved IRS payment processors that charge a 1.87% fee when paying with a credit card:

Pay Taxes With A Credit Card And Earn A Profit
You Can Pay Your Income Taxes With a Credit Card Using 3rd-Party Payment Processors, Like Pay1040.com, for a 1.87% Fee

There are other approved processors, but you’ll pay higher fees.

Note:  You will NOT be charged cash advance fees when you pay with a credit card.

Earn a Profit With Tax Payment

Link:   Chase Sapphire Reserve

Link:   Chase Freedom Unlimited

With the Chase Freedom Unlimited card, you earn 1.5X Chase Ultimate Rewards points per $1 you spend on all purchases with NO limit.

And you can get more value for your Freedom Unlimited points by transferring them to your Sapphire Reserve account.  Because each point in your Sapphire Reserve account is worth 1.5 cents when you redeem for travel through the Chase portal.

Here’s how you can earn a profit with your tax payment.

For example, on a $5,000 tax payment, you’d pay:

  • $5,093.50 with a credit card ($5,000 x 1.87% fee = $93.50)

If you pay with the Chase Freedom Unlimited, you’d earn:

  • ~7,640 Chase Ultimate Rewards points ($5,093.50 x 1.5X Chase Ultimate Rewards points)

Then, transfer the points to your Sapphire Reserve account to redeem for travel through the Chase Travel portal.  You’ll get:

  • ~$115 worth of travel (~7,640 points X 1.5 cents per point)

So you’ll pay ~$94 in fees for your tax payment.  But you will get ~$115 worth of travel.  That’s a ~$21 profit (~$115 value of points – ~$94 fee for tax payment)!

Here’s how you’d benefit using different tax payment amounts.

Tax Payment AmountTax Payment with 1.87% FeeEarn 1.5X Chase Ultimate Rewards Points With Freedom UnlimitedRedeem for Travel With Sapphire ReserveProfit
$5,000~$5,094~7,640~$115~$21
$10,000~$10,187~15,281~$229~$42
$15,000~$15,281~22,921~$344~$63
$20,000~$20,374~30,561~$458~$84

Keep in mind, paying taxes with a credit card definitely does NOT make sense if you can’t pay your balance in full.  If you carry a balance, the interest you’ll pay will negate the value of the miles and points you’d earn.

Bottom Line

If you have both the Chase Freedom Unlimited and Chase Sapphire Reserve cards, you can earn a profit paying your income taxes with a 3rd-party processor like Pay 1040, even with the fees.

Because the Chase Freedom Unlimited earns 1.5X Chase Ultimate Rewards points per $1 on all purchases.  Then, you can transfer the points to your Sapphire Reserve account to take advantage of the 50% point bonus on travel booked through the Chase portal.

For example, a $5,000 tax payment can earn you an effective ~$21 profit.  While you won’t make a lot of money, it’s an easy way to earn Big Travel instead of paying directly from your bank account.

Remember, it’s not worth paying taxes this way if you can’t pay your balance off in full.  Because the interest charges will offset the value of the points.