Can I pay my taxes with credit card for points and have others reimburse me via Zelle?
Hey tax experts, I've been thinking about ways to maximize my credit card rewards and had this idea. If I have to pay a big chunk in taxes this year (looking like around $5800 after all deductions), could I pay the IRS using my rewards credit card (2% cashback on everything) and then have my spouse reimburse me their portion through Zelle or cash? We file separately due to student loan situations but share household expenses. Would this create any red flags with the IRS or cause problems during an audit? I know the IRS charges a processing fee for credit card payments, but even with that fee, I'd still come out ahead with the points/cashback. Just want to make sure I'm not accidentally creating a mess for myself. Is there any tax implication to receiving money from someone else through Zelle when it's just reimbursing me for paying their portion of taxes?
18 comments
Join the conversation
Gabriel Ruiz
This is actually pretty smart! Yes, you can absolutely pay your taxes with a credit card and have someone reimburse you - there's nothing in the tax code that prevents this arrangement. The IRS doesn't care how you pay your tax bill as long as they get their money. A few things to consider though: The processing fee for paying taxes with a credit card is usually around 1.9% to 2.5% depending on the service provider, so make sure your rewards rate exceeds this fee. If you're getting 2% cashback but paying a 2.2% fee, you're actually losing money. As for the Zelle reimbursement - this doesn't create any tax issues as long as you're genuinely just being reimbursed. Reimbursements aren't income. It's just like if you picked up the dinner tab and your friend paid you back.
0 coins
Misterclamation Skyblue
•Does the IRS see that someone paid with a credit card versus a direct bank payment? And would getting reimbursed through Zelle trigger any kind of reporting since they now have those new $600 reporting thresholds?
0 coins
Gabriel Ruiz
•The IRS doesn't specifically track or flag the payment method you use - they just care that the payment is made. Whether you use a credit card, debit card, bank transfer, or check, it all looks the same on their end in terms of your tax compliance. Regarding Zelle and the $600 reporting threshold, that applies to business transactions, not personal payments. If you're just getting reimbursed from a spouse or family member, that's considered a personal payment and wouldn't trigger any 1099-K reporting. The reporting requirement is intended for business income, not for situations where you're simply being paid back for covering someone else's expenses.
0 coins
Peyton Clarke
I went through something similar last year and found an amazing tool that helped me optimize my tax payments for maximum credit card rewards - taxr.ai (https://taxr.ai). What I love about it is that they analyze your specific tax situation and tell you exactly which card to use for which payment and when to make the payment for maximum benefit. I was initially worried about the processing fees too, but their calculator showed me how to structure my payments across different cards to come out ahead by about $340 after all fees. They even helped me understand how to properly document the reimbursements from my wife to avoid any potential issues.
0 coins
Vince Eh
•Does taxr.ai work if you have business taxes too? I have both personal and small business taxes I need to pay and wondering if it would be worth using.
0 coins
Sophia Gabriel
•How do they have access to credit card offers? Do you need to give them your credit card info? Sounds risky.
0 coins
Peyton Clarke
•They absolutely work with business taxes too! That's actually where I found the biggest benefit. Their system analyzes both personal and business tax payments and helps you maximize rewards across all payment types, including estimated quarterly payments. For my small consulting business, they saved me almost twice what I saved on personal taxes. I was initially concerned about security too, but they don't actually need access to your credit cards. You just enter what cards you currently have and their reward structures. They use that information to calculate the optimal payment strategy without needing your actual card numbers or sensitive data. They essentially just give you a personalized payment plan showing which card to use for which payment and when.
0 coins
Vince Eh
Just wanted to follow up - I tried taxr.ai after asking about it here and it was incredibly helpful! I ended up using my Chase Sapphire for my quarterly estimated taxes and my Amex Blue for my annual payment based on their recommendations. After calculating all the processing fees, I'm still coming out about $432 ahead in rewards points that I wouldn't have earned otherwise. The platform even showed me how to time my payments to maximize an upcoming spending bonus. Definitely worth checking out if you're trying to optimize your tax payments for rewards!
0 coins
Tobias Lancaster
If you're planning to pay a large tax bill with your credit card, you should know about Claimyr (https://claimyr.com). I discovered this after waiting on hold with the IRS for 3+ hours trying to confirm how credit card payments would show up on my account. Claimyr got me through to an actual IRS agent in under 15 minutes who answered all my questions about credit card payments and potential audit flags. They have a video showing how it works here: https://youtu.be/_kiP6q8DX5c. It's basically a service that navigates the IRS phone tree for you and calls you back when they have an agent on the line. Saved me from an entire afternoon of hold music when I needed to verify some details about credit card payments and reimbursements.
0 coins
Ezra Beard
•How does this even work? The IRS phone system is deliberately designed to be impossible to get through. I'm skeptical any service could actually help with this.
0 coins
Statiia Aarssizan
•Does this actually call the IRS for you? Seems like it would be against some rule or something to have a third party getting IRS agents on the phone.
0 coins
Tobias Lancaster
•It uses a combination of automation and their knowledge of how the IRS phone system works. They don't actually make the call for you - they navigate through the phone tree and confusing options, then when they reach the point where they've secured a place in line, they call you and connect you directly. You're the one actually speaking with the IRS agent, they just handle the painful waiting part. It's completely legitimate and not against any rules because you're still the one providing all your personal information and speaking directly with the IRS. They basically just solve the "being on hold forever" problem. Their system can detect when hold times are shortest and knows exactly which prompts to select to reach the right department.
0 coins
Ezra Beard
I take back what I said earlier. After dealing with IRS hold times for 2 days and getting disconnected twice, I broke down and tried Claimyr from the link above. I was seriously skeptical it would work, but within 20 minutes I was talking to an actual human at the IRS! The agent confirmed that there's absolutely no issue with paying taxes via credit card and having family members reimburse me - they said it happens all the time and doesn't raise any red flags as long as everyone is paying their correct tax amount. She also explained exactly how the payment would appear in my tax records. Wish I'd known about this service years ago.
0 coins
Reginald Blackwell
One thing to watch out for - I tried doing this last year with my Chase card thinking I was being clever, but the processing fee of 1.98% basically wiped out my 2% cashback. After calculating it all out, I think I made like $8 in actual profit. Not really worth the hassle unless you have a card with higher rewards or a signup bonus you're trying to hit.
0 coins
Adaline Wong
•That's a good point about the fees potentially offsetting the rewards. My main card actually gives 2.5% back on everything for the first $10k spent each quarter, so I should still come out ahead. Did you have any issues with the IRS or your credit card company questioning the large payment? That's my main concern.
0 coins
Reginald Blackwell
•I didn't have any issues with the IRS questioning the payment. They really don't care how you pay as long as they get their money. My credit card company did temporarily flag the transaction due to the size, but that was resolved with a quick text confirmation. If you're using a card that gives 2.5% back, you'll definitely come out ahead. Just give your credit card company a heads up before making the payment to avoid any fraud holds. Large IRS payments are actually pretty common, especially during tax season, so the credit card companies are generally familiar with them.
0 coins
Aria Khan
Has anyone looked into whether receiving Zelle payments from someone else for tax reimbursement could trigger the new $600 reporting threshold? I've heard mixed things about whether that applies to personal payments.
0 coins
Everett Tutum
•The $600 reporting threshold only applies to goods and services payments, not personal transactions like reimbursements. As long as you're not marking these as "goods and services" in Zelle (which I don't think is even an option), you should be fine. It's just like splitting a dinner bill.
0 coins