Using charge card to pay tax due

[MargaretMort]

I have two clients who owe a couple of thousand each. They would like to use their charge cards to pay the balance due. I found the form that gives the information but I am not quite sure how it works. I wouldn't recommend they pay before their e-filed returns have been accepted, apparently you can do that. Once the forms are accepted, I suppose you can go to the site of your choice and make your charges. I just don't know and I don't want to give them the wrong information. These people usually get huge refunds so this is a big change for them.

Thanks for any help. MM

[Gail in Virginia]

Margaret, I am not really sure what your question is. It should not matter whether the return or the money is received first, but I would probably, like you, prefer to e-file, wait for the ack, and then have them do the credit card bit. In fact, if it were me, I would recommend paying whatever amount they can by check or direct debit, and only charging the balance. The fees for this service are based on a percentage of the amount paid. I have had clients use it simply because they charge everything to build up credit on their reward program, but I really don't believe they came out ahead. If you have any specific questions about this, I will try to help if someone doesn't beat me to it.

[MargaretMort]

You are correct, my question wasn't clear but, on the other hand, I wasn't sure what to ask. I believe they intend to pay the entire amount but use their credit card to take advantage of points, etc. I think, now that you mention it, I was wondering what the charges for using these companies are. As I read the blurb, it says they will know what the charges are before the client agrees to use the company and can opt out. Think I will prepare a V for each of them, just in case. Thanks for clarifying my mind, or what amounts to it. MM

[Lion EA]

You still have your mind?! I can't find mine any more. Think it's under a stack of returns, or laundry, or dust bunnies, or....

[Catherine]

You still have your mind?! I can't find mine any more. Think it's under a stack of returns, or laundry, or dust bunnies, or....

I lost mine YEARS ago. Don't miss it and have never again had to worry about keeping track of it so it doesn't get lost! One less thing to deal with; I recommend it to all and sundry. Especially sundry.

Catherine

[PapaJoe]

Isn't Sundry the first day of the week?

[zeke]

Isn't Sundry the first day of the week?

I thought it was a song - sundry my prince will come....

z

[Catherine]

I thought it was a song - sundry my prince will come....

z

Isn't "Sundry' a strange name for a prince??

[HV Ken]

My understanding is that you process the charge card, get an acknowledgment code, enter that code into the return, and then e-file. That's my memory anyway from doing it last year - have not done one yet this year.

[David1980]

http://www.irs.gov/efile/article/0,,id=101316,00.html

If possible, it makes sense to use debit as the charge is $3.49. If they pay by credit card they'll pay 2.49% (percent) of the amount paid. I don't know what kind of points or miles they're getting, but I doubt it's more than 2.49%.

[MargaretMort]

Thanks for the added information. Certainly gives me more to tell them.

HVKEN, the credit card payment information I printed from the 1040 says, in bold type, if you pay by credit card, please enter below the confirmation number you were given at the end of the transaction and the amount you charged (not including the convenience fee). I am assuming from that the return can be efiled and the charged amount sent later. Need to the irs site David 1980 mentioned.

[HV Ken]

Thanks for the added information. Certainly gives me more to tell them.

HVKEN, the credit card payment information I printed from the 1040 says, in bold type, if you pay by credit card, please enter below the confirmation number you were given at the end of the transaction and the amount you charged (not including the convenience fee). I am assuming from that the return can be efiled and the charged amount sent later. Need to the irs site David 1980 mentioned.

So you call the charge card company, enter the credit card info and amount, receive a confirmation number, enter it on the return, and then efile. Not sure what you mean the charge amount can be sent later - you have already entered into the charge agreement and received the confirmation number. There is nothing more to do after you enter the confirmation number into ATX and submit the e-file. Nothing gets sent later.

Since I haven't done one of these this year, I don't remember what date the charge is processed - I am going to assume you either specify a date or it defaults to 4/15.