Most people dread tax season, but it can be an opportunity to earn thousands of dollars in points by paying taxes with a credit card.

Why Pay Taxes with a Credit Card

The US government allows you to make tax payments with a credit card which is not typically recommended because there is ~1.82% fee to do so. However, if you are working on a sign up bonus for a credit card then you can easily net 20% back from the bonus. Transfer these points to a transfer partner at 2 cents per point and you just made 40% back on your tax payments.

How to Pay Taxes with a Credit Card

Tax payments for taxes owed are usually made through Form 1040. However, you can pay more than you owe by using Form 4868 which is used to file a tax extension. In short, this form gives you an additional 6 months to file your taxes by submitting what you estimate you’ll owe in taxes. You can overestimate how much you owe which allows you to pay more than you owe in taxes. After you file your taxes, the government will pay you back the excess. One warning is that you don’t want to make a payment you cannot pay. The government is typically prompt in tax repayments after you file your taxes so you may be able to get your refund before your payment due date, but you do not want to be stuck with a credit card balance if there is a delay. To pay taxes with a credit card for Form 1040 or Form 4868, go to the IRS website here and select a payment processor. Each processor permits 2 credit cards and there are 3 processors so you can hit up to 6 sign up bonuses per person by paying taxes with a credit card.

Curious about other ways to hit sign up bonuses? Check out this post.