One of the not-so-glamorous sides of self-employment is taxes. The only silver lining is being able to pay those taxes with a credit card! Here’s how I turned a large tax payment into two free nights at a luxury Hyatt property worth over $1,200…

 

Options for Paying With a Credit Card

You have three options when it comes to paying your taxes with a credit card:

• payUSAtax (1.85% credit card fee)
• Pay1040 (1.87% credit card fee)
• ACI Payments, Inc. (1.98% credit card fee)

I went with payUSAtax because it has the lowest credit card fee. You should also be aware that you can split a single tax payment between two cards, so if you’re working on a minimum spend for more than one card, or trying to earn some perks through spend (like I was), then splitting the payment could make sense.

But, the fee!

True, there is a fee to pay your taxes via credit card while there’s no fee to pay by check or withdrawal from your bank account. But if the benefits of paying by card outweigh that fee, then it’s a no-brainer!

If paying your taxes by credit card allows you to meet a minimum spend that you otherwise wouldn’t be able to meet, I’d say that’s definitely worth the 1.85% fee. Or if the % back you earn from paying with a credit card is more than 1.85%, then that’s another instance where paying with a credit card is the right move.

Neither of those were the case when I decided to pay my $15,000 tax bill with my personal World of Hyatt credit card. But here’s why I did it anyways…

 

Why the Hyatt Card?

I’ve had my Hyatt card for years. So this wasn’t an instance where I’d be earning the welcome offer by charging my taxes to the card.

But one of the perks of the Hyatt credit card is that you earn a category 1-4 free night certificate after spending $15,000 on the card in a single calendar year.

 

 

Not only that, but I’ll still earn 1x on every dollar spent. That means a $15,000 tax payment = 1 category 1-4 free night certificate + 15,000 Hyatt points. I was sold!

You also earn 2 qualifying elite night credits towards Hyatt status for every $5,000 you spend on the personal card. So I will also earn 6 elite nights towards maintaining Globalist status!

 

The Fee I Paid vs. What I’ll Get in Return

A 1.85% credit card fee on a $15,000 tax payment came out to $277.50. Some of you may think that’s an outrageous amount to pay when you could pay by check for free. In my instance, I came out way ahead!

We’re taking a road trip to Chicago this summer, and we want to stay at the Thompson Chicago. The Thompson is a category 4 Hyatt property, and rooms regularly go for several hundred dollars a night. I realized that if I paid my taxes with my Hyatt card, I’d earn not only the category 1-4 free night certificate, but I’d also earn an additional 15,000 Hyatt points to put towards a second night at the Thompson (nights will range from 12,000-18,000 points/night depending on if they’re off-peak, standard, or peak nights). You could put those 15,000 points towards even more free nights at a lower category Hyatt!

I searched our dates to discover the cash rate for two nights is over $1,200! Instead, we’ll use the free night certificate + points and pay a grand total of $0.

So yes, the $277.50 fee was worth what I’ll get in return. This doesn’t even take into account the value of those 6 elite night credits towards maintaining Globalist status! I’d say I definitely came out ahead.

Bottom Line

Don’t let the fee to pay taxes with a credit card stand in the way of an even better return! Of course paying taxes with a credit card won’t make sense for everyone. But if you have a minimum spend to meet, have a card that earns more than 1.85% back (like the Capital One Venture or Venture X), or just want to take advantage of some perks that come with putting spend on a certain card, paying your taxes is a great option!