How to Pay Taxes with a Credit Card
Have a looming tax bill for quarterly or an annual taxes? Wondering if paying with a credit card makes sense? Learn if it makes sense for you to pay your taxes with a credit card for a small fee to earn free travel!
How to Earn a Free Trip by Paying Your Taxes
Well, folks—2024 has come and gone, as years tend to do. The new year is always full of excitement, fresh goals, and… tax bills.
Yep, it’s that time again when you have to part ways with your hard-earned cash and hand it over to the government, but what if I told you there’s a way to turn that dreaded tax payment into a first-class flight or even an entire vacation?
That’s right—you can actually profit from paying your taxes. Let me explain how.
Pay Taxes with a Credit Card? Yes, and Here’s Why
You might already know that you can pay your taxes with a credit card, but you might hesitate because of the processing fee. The IRS partners with various payment processors, and they typically charge a fee between 1.75% and 1.85% to pay with a credit card. For simplicity, let’s call it 2%.
Now, let’s do some quick math:
Say you owe $10,000 in taxes
The 2% fee means you pay an extra $200
At first glance, that might not seem worth it—but in the right scenarios, it can be a game-changer for earning massive rewards.
Scenario 1: Using Your Tax Bill to Hit a Welcome Offer
One of the biggest barriers to getting premium travel credit cards is the minimum spend required to earn the welcome bonus. Some of the best travel cards offer huge sign-up bonuses but require spending $4,000–$8,000 in a few months.
If you have a $10,000 tax bill, you can knock out that spending requirement instantly and walk away with enough points for free flights and hotels.
For example, you could:
- Open the Capital One Venture X Rewards Credit Card (which requires a $4,000 spend) and another top travel card with a similar bonus requirement.
- With both bonuses, you could rack up 150,000+ points, which is enough for a free international trip.
- Pay $200 in fees, but redeem the points for flights and hotels worth thousands.
That’s a fantastic return on investment if you ask me.
Scenario 2: Maximizing Everyday Points Earning
Even if you aren’t working toward a welcome bonus, paying taxes with a credit card can still be worthwhile if you have a high-earning rewards card.
For example, if you use a card that earns 2x points on all purchases (once again the Capital One Venture X Rewards Credit Card does), your $10,200 tax payment (including fees) would net you 20,400 points.
If you transfer those points to Flying Blue (Air France/KLM’s loyalty program), you could book a flight to Europe for just 18,750 miles.
So, by simply paying your taxes, you’re essentially getting a free flight worth way more than the $200 processing fee. Not bad for something you had to pay anyway, right?
What Credit Card is best for paying taxes?
Now that we've went over some of the math you might be wondering what credit cards we recommend for paying your taxes with. First, decide if you want to open a new one or put it on one you already have. If you pick to put it on one of the ones you already have ideally pick a card like the Capital One Venture X Rewards Credit Card that earns 2X miles.
Need a new card? Here are a few of our picks. We recommend going for one you probably wouldn't be able to meet larger sign up bonus on with normal spend.
New Credit Card Recommendations:
Here are a few cards we recommend to pay taxes with if you are going after a new sign up bonus.
A card I opened up to pay a large chunk of taxes with and I mean LARGE, so this isn't for everyone, is the Capital One Spark Cash Plus. Earn $2,000 cash back after you spend $30,000 in the first 3 months from account opening.
This card earns 2X miles on every purchase, so after meeting the $30,000 minimum spend you will have earned 60,000 miles from the spend and 200,000 miles from the welcome offer. That's 260,000 Capital One miles.
This is a cash back card so you need to pair it with a card like the Capital One Venture X Rewards Credit Card that earns Venture Miles. After you earn the sign up bonus use the Capital One online account to combine your rewards and move the miles to your mile earning card.
Once again this is a LARGE spend and won't work for everyone.
Hint: When you apply freeze your Experian credit so they can't pull it. This card can be tricky to be approved for and this seems to help. Worked for me!
The Business Platinum Card® from American Express
This card is another card with a large spend required to get the sign up bonus. Earn 150,000 Membership Rewards® points after you spend $20,000 on eligible purchases with your Card within the first 3 months of Card Membership.
This card also has a high annual fee of $695, so make sure it makes sense for you. It does have some great perks associated with it though!
Some of them include complimentary access to the Amex Centurion Lounges, which are some of the best airport lounges in the US. Along with access to the Global Lounge Collection, allowing you to access 1,300+ airport lounges worldwide. Enrollment required.
$120 TSA PreCheck/Global Entry Credit. Enrollment Required. Receive either a $120 statement credit every 4 years for a Global Entry application fee or a statement credit up to $85 every 4.5 years for a TSA PreCheck® (through a TSA official enrollment provider) application fee, when charged to your Platinum Card®. Card Members approved for Global Entry will also receive access to TSA PreCheck at no additional cost.
Use your card and get up to $199 in statement credits per calendar year on your CLEAR® Plus Membership (subject to auto-renewal) when you use your Business Platinum Card®.
Cardholders also receive Gold status with Marriott and Hilton (enrollment required).
Chase Ink Business Unlimited® Credit Card
All information about Ink Business Cash® Credit Card has been collected independently by Plan Pack Go. The card details on this page have not been reviewed or provided by the card issuer.
If you have a smaller tax bill to pay this card is a great option for you!
Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening. This card is marketed as a cash back card. These points can be used for higher value travel redemptions if you have another Chase Ultimate Rewards card. We recommend pairing it with the Chase Sapphire® Credit Card.
Best part is this card has a $0 annual fee!
The Wrap Up: Make Taxes Work for You
Taxes aren’t fun—but if you strategize your payments, they can become a powerful tool for free travel.
- If you need to hit a credit card welcome offer, paying your taxes can fast-track you to a huge points windfall.
- If you already have a great travel rewards card, paying taxes strategically can still earn you free flights or hotels.
- Even though you’ll pay a small fee, the value of the rewards you earn can far outweigh the cost.
So as you gear up to pay your tax bill, don’t just hand over your money—make it work for you. Who knew paying taxes could actually be fun?
Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
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