Do It With Points: Using Tax Payments to Earn Your Next Vacation

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Current Credit Card Opportunity Spotlight

  • Card Name: Chase Sapphire Preferred
  • Current Bonus: 60,000 Ultimate Rewards points
  • Minimum Spend: $4,000 in 3 months
  • Annual Fee: $95
  • Why Now: Tax season provides a perfect opportunity to meet minimum spend requirements with money you need to pay anyway.

Real-Life Case Study: Meet Sarah

Sarah, a freelance graphic designer, needs to:

  • Pay $3,000 in estimated taxes for Q4 2024
  • Meet a $4,000 minimum spend requirement
  • Book a vacation in fall 2025

Sarah’s Initial Situation

Required Tax Payment: $3,000
Remaining Minimum Spend: $4,000
Timeline: 3 months
Current Points: 0

The Strategy Breakdown

  1. Tax Payment Approach
    • Selected Payment Processor: Pay1040.com
    • Processing Fee: 1.87% ($56.10 on $3,000)
    • Points Earned: 3,000 (1x points on tax payment)
    • Contributes 75% toward minimum spend requirement
  2. The Math Behind It
    • Cost:
      • Processing Fee: $56.10
      • Annual Card Fee: $95
      • Total Cost: $151.10
    • Benefits: -
      • Base Points from Tax Payment: 3,000 ($37.50 value)
      • Remaining Spend Points: 1,000 ($12.50 value)
      • Sign-up Bonus: 60,000 ($750+ value)
      • Total Value: $800+
      • Net Profit: ~$650
  3. How to Execute
    • Apply for card in January
    • Make tax payment in February
    • Complete remaining $1,000 spend on regular expenses (pay card in full!)
    • Points post by April statement close
    • Book travel✈️

Point Maximization Examples

Using the 64,000 total points earned:

  • Option 1: Round-trip flight
  • Option 2: Nights at Hyatt
  • Option 3: $800 in travel credit through Chase portal

Pro Tips

  • Time credit card application with large tax payments
  • Consider splitting tax payment across two cards
  • Stack with other portal bonuses when available
  • Keep detailed records for tax deductions
  • Calculate fees vs. rewards before committing ⚠️

📋Reader Action Items

  • Calculate your upcoming tax payments
  • Compare payment processor fees (see chart below)
  • Check credit score (recommended: 720+)
  • Verify under Chase 5/24 rule
  • Set calendar reminder for estimated tax due dates

Payment Processor Comparison

CopyPay1040.com: 1.87% fee
PayUSAtax: 1.96% fee
ACI Payments: 1.98% fee

Important Disclaimers

  • Fees are tax-deductible for business owners
  • Points may take 1-2 statements to post
  • Verify payment counts as purchase, not cash advance
  • Consider impact on cash flow
  • Always ensure ability to pay statement balance in full

Next Week’s Preview

How to stack tax payments with shopping portals for even more points!

All processor fees and card offers current as of January 2025. Check current rates before making payments.

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