Did You Earn Miles for Paying Taxes?

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As is true in houses all around the country, this April 15th has not been an overly fun day, so to switch to putting a more positive lens on the money many of us have to part with today, I wanted to get a rough idea of how many families earned miles and points for their tax payments.

This is one of those methods of earning miles and points that is going to cost you one way or another, and can involve more steps than some people are interested in.  If you have a mileage earning debit card like the SunTrust card that earns Delta SkyMiles then the cost can be very minimal with a flat fee as low as about $3.  However, if you are hoping to put your tax bill on a credit card, then you are looking at fees of at least 1.88%.  Some people like to mitigate that fee by purchasing Amex gift cards via a portal that gives them cash back.  Some folks also employ the usefulness of BlueBird and Vanilla Reloads.  And others just say “to heck with it” and mail in a check the old fashioned way.

I’ll be honest and say that this April 15h I skipped worrying about earning miles as it was just getting too complicated for our situation, but we will hopefully be shifting to working on earning miles for our quarterly estimated taxes going forward as it can be a good way to earn some miles for something you were going to do anyway.  Even if you just pay it straight up via a credit card with a fee (lowest is 1.88%) it can still be worth it if you are triggering an annual spending bonus perk or hitting a spending requirement that you otherwise would have a hard time meeting.

Coming from someone who isn’t earning miles today myself, don’t beat yourself up if the fees or hassle sounds like more trouble than it’s worth for you and/or your spouse.  It might be.  However, it is still good to have at least a vague idea of what the options are for the future.

While it may be too late for you this tax year, if you really want to learn the nitty gritty of some different ways to maximize paying taxes going forward head to Frequent Miler’s posts here and here.

So who earned miles on their taxes this year?!

 

Comments

  1. I am with you. Didn’t fully prepare myself for using a debit card, but will absolutely start preparation for quarterly estimates as well!

  2. I earned lots for my taxes (about $18000 worth), without any hassle, but for a price. Self employed, so the credit card fee is tax deductible, so 1.89% becomes about 1.36%. Used AMEX premier rewards, so will end up getting about 27000 MR points, so ends up being about 0.91 cents a point. If there is a bonus at some point for transferring to an airline, this will end up being even lower, maybe even as low as .6 cents a point if there is a 50% bonus.

  3. I made a couple of estimated tax payments with the $500 Visa cards from Office Depot last year, but for settling up today I just mailed in a plain old-fashioned check. To me, it just isn’t worth the extra hassle and risk of something going wrong.

  4. @far north trader – the credit card fee is only deductible if it along with other miscellaneous deductions exceed 2% of gross income. It is not deductible as a schedule C expense.

    I use the Suntrust Delta debit card at PayUSAtax.com for their flat sub-$4 transaction fee. One Skypeso per tax dollar, baby!

  5. No, but it’s definitely on my radar. And note — the IRS is happy to accept an over-payment on your final estimated tax for the year and refund you the money after April 15th. If you’re earning bonused miles on a pseudo-debit card, that could really be worthwhile.

  6. Yes, we did. And we will pay our estimated taxes by credit card this year. I bought into Lucky’s math…and decided it was worth the fees. And, we’ve been paying college tuition for our daughter by credit card, and the fee is even higher so this became a “no-brainer”–but not without extending discussion in the household!

  7. We used our newly activated Suntrust Debit card. I enjoyed only paying the small flat fee instead of the credit card fees. Had to put the state on a credit card since they didn’t accept debit.

  8. We pay a good bit in taxes since we are self employed. I put the state quarterly’s on the credit card but I write a check for the federal taxes. I can’t justify paying a fee for the huge amount that we pay in federal taxes. We do not have a miles earning debit card–we have plenty of miles earning credit cards though. We file monthly sales tax returns for our business that is several thousand dollars per month. I am able to put that on a credit card without a fee. I usually use my Chase Sapphire for the 7% bonus or put it on the Chase Ink. Really, the Chase Sapphire is probably the best one because of the bonus. Sometimes I will put it on another card if I am trying to meet a minimum spend.

  9. I don’t have a debit card so took Lucky’s advice and used my SPG card at one of the places that charged 1.88%. Not thrilled to pay $300 for 16 K starwood points but if I plan wisely using a good cash+points rate, maybe I will come out ahead

  10. I used the 1.88% fee service twice. I never received an email confirmation of the payment. I have no reason to believe the payment failed (and my credit card was charged both times), but I opted for the 1.89% fee service this last time and got an email verification right away.

    And while it didn’t fool me, the 1.88% service company sends follow-up marketing emails that lead you to make payments via their more expensive affiliated company. If you click through to make another payment, the fee is much, much higher.

  11. My Blue Bird checks arrived on Saturday. My first check was Fed, the second was State, both mailed on Monday. Just in time to save me from 1.88%…

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