Maximum use of credit card to pay taxes?


We all know that you can pay taxes with a credit card, subject to what
is usually a 2.49% "conveience fee." Most people who do this, do it
at least in part to get the rewards on the credit card, but the
rewards are usually not worth close to 2.49%. I have a somewhat
unique situation where the rewards are worth far more than that -
somewhere in the 5-6% range. If I could, I would happily pay as much
as I could that way, but I can't necessarily afford to float the money
for a year.
Would it raise any red flags if, say, I paid $10,000 or $20,000 with
my credit card, then got a refund next year of $10,000 or $20,000?
The IRS loses nothing - they get their money and keep it without
interest for a while. The credit card processor presumably is making
a profit at 2.49%. The ones who lose are the airline (I have a
curious situation where I can get tickets for 15,000 miles that
normally cost $700), but that's only because they have a crazy fare/
reward structure.
Or, does anyone know of a way to move large sums of money through a
credit card and turn it back into cash? (Yeah, and I can see a visit
from the FBI wondering if it's drug or terrorist money.)
========================================= MODERATOR'S COMMENT:
- this starts as a tax-related question, but can easily move away.
Let's stay on topic with replies.
Reply to
Hank Youngerman
"Hank Youngerman" wrote
You are welcome to pay any amount you like as estimated taxes by means of a credit card. I have no clue as to what the current fees are for making tax payments in that manner, so investigate that closely, as well, make sure those charges qualify for points from your card issuer prior to making the transaction.
You could make a 2009 estimated tax payment now and get that refunded back in March or April if you in fact overpaid your 2009 taxes.
Reply to
paulthomascpa

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