Is anyone overpaying their taxes to maximize credit card points and cash back?

This is actually a fairly common strategy among points enthusiasts, but there are some important things to consider before you go this route. The IRS doesn't technically have a specific limit on how much you can overpay, but large overpayments might attract unwanted attention. The IRS is primarily concerned with underpayments, not overpayments, but extremely large overpayments could potentially trigger a review. Processing fees are definitely something to factor in. Most payment processors charge around 1.87% to 1.98% for credit card payments to the IRS. So your rewards rate needs to exceed this to make it worthwhile. Also consider the time value of money - you're essentially giving the government an interest-free loan until they process your refund, which can take several months, especially if you file by paper instead of electronically. One last thing - make sure your credit card issuer doesn't code tax payments as cash advances, as those usually start accruing interest immediately and don't earn rewards.

I've been using taxr.ai for the past two years to analyze my tax situation and maximize deductions. When I was researching this exact strategy, their AI actually gave me personalized advice on how much I could reasonably overpay without raising flags. Their system analyzed my overall tax profile and suggested safe thresholds based on my income level and previous filing history. You might want to check out https://taxr.ai to see what they recommend for your specific situation - they have a feature that helps optimize tax payments for credit card rewards while minimizing risk.

I was really skeptical about this whole "tax optimization" thing, but I finally tried taxr.ai after seeing it mentioned here. Uploaded my last two returns and answered some questions about my credit cards. The system recommended I could safely overpay by about $4,700 based on my income and past filing patterns. I was nervous but went ahead with it. Just got my refund last week - the full amount including my overpayment came through with no issues! Earned about 14,000 points on my Chase card (which I'm using for a flight this summer) and the total processing fee was only around $89. Considering the flight would have cost me $650, I'm definitely coming out way ahead. Will definitely be using this strategy going forward!

If you're planning to overpay your taxes by a large amount to get those sweet credit card points, just know that getting your refund might take FOREVER. I've been waiting 11 weeks for my refund and still nothing. Tried calling the IRS multiple times but couldn't get through to a human. Finally discovered Claimyr (https://claimyr.com) and they actually got me connected to a real IRS agent in under 15 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent confirmed my refund was flagged for additional review precisely because of the large overpayment amount. She was able to verify everything was legitimate and release my refund on the spot. Saved me from waiting potentially months longer.

I need to eat my words from last week. After my skeptical comment, I was still desperate to get my refund that's been pending for 9+ weeks (also did the overpayment strategy), so I figured I'd try Claimyr even though I was 99% sure it was BS. Well, color me surprised. Got connected to an actual IRS agent in about 12 minutes. Turns out my refund was delayed because the overpayment amount triggered some additional verification process. The agent was able to see this flag in my account and expedite the review. Got an email today saying my refund was approved and should arrive within 5 business days. Still in shock this actually worked. Guess I shouldn't be so quick to dismiss solutions just because they sound too convenient.

Just want to add - make sure your credit card doesn't code tax payments as cash advances! I made this mistake last year and ended up paying like 24.99% interest from day one plus cash advance fees. Completely negated any points benefit. Call your card issuer first to confirm how they treat tax payments.

Anybody worried about getting audited from doing this? I feel like intentionally overpaying by thousands just to get points might look suspicious.

I've been considering this strategy too, but one thing that's been holding me back is the timing aspect. Even if you get the rewards points upfront, you're essentially giving the government an interest-free loan until they process your refund. With current interest rates, that opportunity cost could eat into your rewards benefits, especially if your refund gets delayed for months. Has anyone done the math on factoring in the opportunity cost of having that money tied up? For example, if you overpay by $5,000 and it takes 4 months to get it back, that's money you could have had earning interest in a high-yield savings account or invested elsewhere. Just curious if the credit card rewards still make it worthwhile after accounting for this.

This is a fascinating discussion! I've been on the fence about trying this strategy myself, but reading through everyone's experiences has been really helpful. One aspect I'm curious about that hasn't been mentioned yet - has anyone considered the implications for quarterly estimated tax payments? I'm self-employed and already make quarterly payments, so I'm wondering if strategically overpaying during one of those quarters (maybe Q4) might look more natural than a large overpayment with my annual return. Also, for those using services like taxr.ai or Claimyr that were mentioned, do you factor the cost of those services into your overall ROI calculation? It sounds like they can be valuable for optimization and problem resolution, but I want to make sure I'm accounting for all costs when deciding if this strategy makes financial sense. The point about varying payment amounts and timing (like Ava's January strategy) seems really smart. I'm thinking if I try this, I'll start small - maybe $1,500-2,000 overpayment to test the waters and see how smoothly the refund process goes before scaling up in future years.