Can I pay someone’s taxes to get cc points

amother

Sun, Apr 23 2023, 11:12 am

If I pay my relative’s tax bill so I get the cc points and they write me a check, is that allowed?
Do I have to pay taxes on their check to me?

amother

Aconite

Sun, Apr 23 2023, 11:21 am

I don't think you can pay taxes with a cc

But either way it's risky. Id assume in case of audit, this relative would want records of an actual payment they made. And if you get audited it just looks sketchy.

Is it really worth the points??

devorah1231

Sun, Apr 23 2023, 11:38 am

You absolutely can pay by cc, read an article on Dan's Deals about it. If you keep records I don't see why its a problem, so long as you can prove the money they gave you isn't new income if you get audited.

amother

Smokey

Sun, Apr 23 2023, 12:46 pm

The IRS goes through a third party when you pay with a credit card and they charge an extra 3%. I only accumulate cc points when its free. You need to see if its worthwhile for you.

Amarante

Sun, Apr 23 2023, 1:22 pm

The amount charged by the IRS is closer to 2%

There isn't any legal risk as you can provide documentation on both sides. Payment would be acknowledged by IRS - they don't care who is paying it. If it is more than the allowable annual gift maximum then you would need to provide additional records that it wasn't a gift.

But like others I question whether it is worth it for either side. Your relatives will wind up paying 2% more which may be a significant amount. And how many points would you actually receive by going through this.

This is meant to help taxpayers who don't have the money to pay their taxes when due. As others have posted, you only charge instead of paying in situations where there is no charge to you. Once you pay a processing fee, there is generally no benefit

amother

Sun, Apr 23 2023, 2:14 pm

Amarante wrote:

We would obviously pay the 2% difference.
We’d be getting about 160,000 bonus points.

amother

Trillium

Sun, Apr 23 2023, 2:22 pm

amother OP wrote:

We would obviously pay the 2% difference.
We’d be getting about 160,000 bonus points.

How much is each bonus point worth?

amother

Sun, Apr 23 2023, 2:31 pm

amother Trillium wrote:

How much is each bonus point worth?

1-1.5 cents
That’s at least $1600
While the 2% interest would be $200

doctorima

Sun, Apr 23 2023, 3:08 pm

Yes, as Dan writes, it's generally not worth it to pay taxes with a cc just to get the points, which are generally worth about what you pay for the cc fee. But if it enables you to reach a huge sign-up bonus, then it can be well worth it many times over, as it sounds like it is for OP - enjoy your new Amex BP! Smile

amother

Sun, Apr 23 2023, 3:32 pm

doctorima wrote:

It’s for a bonus. It’s a few chase cards that I got through dan’s deals Smile