Tax season is a time that many people dread, but it doesn’t have to be all bad news. In fact, if you’re strategic about it, you can actually maximize the points, miles, and cash back that you earn while doing your taxes. In this article, we’ll explore some tips and tricks to help you make the most of tax season.
One important consideration when preparing your taxes is the software you plan to use. There are many tax software packages on the market, and some of them offer excellent deals through online shopping portals. These offers tend to be most prevalent as the April 15 individual income tax filing deadline approaches. To ensure that you’re getting the best deal, I recommend using a shopping portal aggregator like CashbackMonitor. This tool allows you to quickly compare the options available for your preferred software.
In addition to checking online shopping portals, it’s also worth looking into credit card merchant offers. Many credit card issuers, such as American Express, Citi, Chase, and U.S. Bank, offer deals and discounts for tax software providers. In the past, I’ve seen offers for TurboTax, H&R Block, TaxAct, and Jackson Hewitt on my accounts. These offers can sometimes be stacked with shopping portal earnings, so be sure to read the fine print and enroll in the merchant offer before making your purchase.
Another way to maximize your rewards during tax season is by using the right credit card. If you’re paying tax preparation fees, consider using a credit card that offers bonus rewards for everyday spending. Most accounting firms won’t code in a way that fits into the bonus categories found on most rewards credit cards, so using a card optimized for everyday spending can help you earn more rewards.
If you owe federal taxes this year, you may also want to consider paying your taxes with a credit card. The Internal Revenue Service (IRS) allows tax payments by credit card through three third-party payment processors: PayUSAtax, Pay1040, and ACI Payment, Inc. Keep in mind that there is a fee associated with paying your federal taxes with a credit card, but depending on your card and your goals, it could be worthwhile. For example, you could use an American Airlines card to earn miles and loyalty points, or you could use a card for which you’re working toward minimum spending requirements for a bonus or threshold reward.
When it comes to paying your taxes with a credit card, it’s important to consider the fees involved. PayUSAtax charges a 1.82% fee with a minimum fee of $2.69, Pay1040 charges a 1.87% fee with a minimum fee of $2.50, and ACI Payment, Inc. charges a 1.98% fee with a minimum fee of $2.50. While there is a fee associated with paying by credit card, it’s worth noting that some cards offer a higher return on spending. For example, using the Capital One Venture X Rewards Credit Card or the Capital One Venture Rewards Credit Card could earn you 2 Capital One miles per dollar spent, which would be a 3.7% return based on TPG’s valuation of Capital One miles. However, it’s important to only charge your tax bill to your credit card if you’ll be able to pay your balance in full once it becomes due.
In conclusion, tax season doesn’t have to be a dreaded time of year. By being strategic about your choices, you can maximize the points, miles, and cash back that you earn while doing your taxes. Consider using online shopping portals and credit card merchant offers to get the best deals on tax software, and use the right credit card to earn bonus rewards on everyday spending and tax payments. With a little planning, you can turn tax season into a rewarding experience.