For as long as I’ve been involved with loyalty point programs, I’ve always paid my taxes to the IRS with a credit card. I’ve used the tax payment to earn an extra sign-up bonus or meet a spending threshold. I wouldn’t use a credit card to pay taxes at regular earning levels because you have to pay a fee, which runs around 2%, to use an approved third-party payment processor.
Every year, Frequent Miler updates their post on paying taxes with a credit card, which goes into several techniques to maximize your returns. I use this guide when paying our taxes.
After completing the tax form and filing online, I went to pay at PayUSATax. I’ve used the website in the past and never had problems with payments arriving at the US Treasury.
This year, I needed to split the payment between two credit cards and for the first time, I ran into some snags which resulted in having to call the IRS. Yuck.
Problems Making Payment
The first problem I had was that the website didn’t recognize my credit card. I wanted to use my Ink Cash card because I’m working on meeting a sign-up offer spending requirement. Since we file personal taxes and not a business tax form, the website wouldn’t accept a business credit card.
Thanks to a workaround using PayPal, I was able to get the first 1/2 of the payment to process.
Then I went to make the 2nd payment with our Hilton AMEX Surpass. I’m going to spend $15,000 on the card this year for a free night certificate and the tax payment will help us get there. Since the card is in Sharon’s name, the website would only accept it if I entered her information for the payment. We file jointly so I didn’t think anything of the payments being split between the two of us.
I followed the IRS website to make sure my payments arrived. Within a week, the payment from the Ink Cash card made with PayPal showed up. I waited for the other payment to arrive. And waited. And waited. I checked every few days and nothing.
It’s been over a month and no sign of the payment. I had to call the IRS before I received a notice for not paying taxes. In this case, I felt it was better to be proactive than to wait and see if everything worked out.
Calling the IRS
The IRS phone system is easy to use, if you understand the prompts. When I finally reached the correct department the phone system said the wait would be between 17 and 35 minutes. Considering how long I’ve waited to speak to loyalty programs or theme parks, that’s nothing in comparison.
Then they offered the option to receive a call back instead of waiting on hold. I picked this option and was told I would receive a call in 30 minutes from a West Virginia number. The system also told me the area code so I would know it wasn’t a scam caller.
Right around 30 minutes later the phone rang and I was connected with an agent. She was friendly and efficient with her job. After verifying my personal information, I explained my situation and that I wanted to see if they received my payment. She asked what website I used, when I made the payment and the amount and put me on hold for no longer than 5 minutes.
The agent explained that she was able to locate the payment but it was in Sharon’s account, linked to her SSN. Since I am the first person listed on the return, payments should be made under my name so that they are attatched to our return.
She then said that I didn’t have to worry because the system had flagged the payment to be moved to our joint return. In these cases, it’s best to let the computers do their thing. If she, or anyone else, tried to manually move the payment, the computer might also make a duplicate transaction and then they’d have to undo everything. In other words, all I had to do was wait.
The payment date is based on when it was received, which was on time, and not when it is linked to a tax return.
In closing, she said that if I did receive a notice for non-payment of taxes, I should call back. They can then put a hold on the notice to wait for the payment to post.
Was it worth the hassle for a few extra points? I think it is.
Knowing the problems it can cause, I’m not sure if I’d send a payment under Sharon’s name again. Besides that, the IRS has been helpful so far in straightening out the payment problem. Hopefully that will be the only contact I’ll have with them for this tax season.
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I’m sorry, but I don’t get the point of your article, especially its highly misleading title. PayTaxUSA or IRS didn’t make any changes. You simply screwed up when making the payments. I’ve used personal and business cards in names of every person in my extended family with no problems over the last 8 years across all 3 payment processors typically making 15-24 payments per year (2 per processor x 3 processors x 4 quarters). You’re simply supposed to always list the same person as the primary tax payer. There needs to be no relationship between the taxpayer name and the name on the credit card. I also don’t understand the issue with the Ink card. There is no difference between personal and business cards when making tax payments. All business cards are always ultimately issued in a name of an individual. I highly recommend you delete this article.
Glad it worked out but…. it does say that about joint accounts in bold, red text on the payUSATax page right below where you enter date of birth and again on their FAQ page. Seems pretty obvious and clear.