I paid TAXES with a credit card and earned 140,000 points (BUT was it worth it?)

it's tax season you don't like paying taxes and me neither but we have to and it's especially sad to see that number in the red while you're filing to find out that you owe money to the IRS I'm honestly learning more about doing my taxes and I'm no expert but in today's video we're going to be going over why I chose to pay my taxes with a credit card I'll be laying out the pros and cons so then you can decide for yourself if it's a good idea to do it too for some background if you ever owed money to the IRS you'll notice that there's a processing fee if you choose to pay with a credit card there are a variety of processors to choose from but we'll be choosing the one with the lowest fees which is at 1.82% and right depending on your card it might be worth it to just pay cash but here's the story of what happened to me last year so I do have a full-time job outside of YouTube and though I do tax withholding it was not enough for me to get a refund from the IRS this year and after doing my taxes a few weeks ago my husband and I discovered that we owe the IRS $5,000 which is a bit more than we expected so we owe the IRS that much because we bought a house last year and in order to get our down payment we had to sell a bunch of stocks and realized a lot of short-term gains so you do get taxed a lot more for short-term capital gains compared to long-term gains but also I was not aware that if you expect to owe the IRS more than a thousand dollar then you should send tax estimates by the end of the year and actually there are penalties from the IRS if you owe more than ,000 but it also depends on your circumstance but anyway I'm pretty sure that there are hidden penalties within that $5,000 also I'm only owing federal taxes as for some state taxes I heard that some of them don't accept credit card as a payment so just keep that in mind now let's go over why I'm choosing to use a credit card to pay my tax I of course had to calculate and break down different situations to make sure that this makes sense and as for me paying taxes with the credit card is my opportunity to gain more credit card points which is kind of a no-brainer but we do need to make sure that we're doing it in the smartest way so I need to take that credit card processing fee into consideration and I need to evaluate if the points I'll be making by paying my taxes makes sense so let's break that down into three different scenarios scenario one I can just pay my taxes with cash I won't have any fees but I won't get any credit card points scenario two using a credit card that I already own an example of a credit card that I have that would probably gain the most points per dollar amount by paying my taxes is the capital 1 Venture x with this credit card I would be getting two times the mile per dollar and by paying $5,000 in taxes I would make 10,000 mil Capital 1 miles are valued out 1.85 per point so I would be basically getting $185 worth of points but then I do need to subtract that processing fee and that would bring the grand total down to $91 so by paying with my Capital One Venture X I would be getting $94 back that Redemption is okay but I think we can do better and then there is scenario three what if I apply for a new credit card and pay my taxes to get the welcome bonus now that's a better plan so I just applied to my own Chase Inc business preferred my husband got this card 3 months ago and I did make a video on our experience and overall we did like it so go ahead and check that out but this card has a great welcome bonus of 100,000 points and there is a spending requirement of $88,000 in addition I actually have a special case where I use my husband's referral link so he can get 40,000 extra points so that's basically like getting 140,000 points back so I'll be using this number to calculate the worth of course $8,000 is a ton of money to spend and without having to spend $5,000 in taxes I don't think I would have had a need to purchase $8,000 worth of items but I do have a shopping list mostly new furniture for my house and that can easily reach $3,000 so by combining my taxes with my house items I easily able to reach that $88,000 spending requirement now let's getting into the worth of the Inc business Preferred Credit Card so we are going to be looking at it in two different ways one is the points per dollar value on just the taxes and then we're going to take the worth of the entire welcome bonus into consideration so the first way to look at it is calculating the worth of spending on just the taxes so we're actually going to be taking that 140,000 points plus we get an addition amount from spending so that brings us to 148,000 points now we're going to divide the $5,000 in taxes by the welcome bonus requirement and that gets us to 92,500 points and as for evaluating chases Point values I think I can get that up to 2 cents per point with Hyatt and then finally we have to subtract the tax fees and the annual fee which brings us to the grand total of $1,664 so that's the way to look at it from the tax only perspective but then again I am getting 148,000 points with this new card so the real value that I'll be getting with these points is $2,774 finally the last thing I wanted to note about this is if you are planning on applying for a new credit card to pay for your taxes you might want to consider your credit card limit I was a bit surprised when I received this Inc business card I only have a limit of $5,000 which is pretty surprising because it's a business card but probably if you have an MX you'll be good but just keep this in mind so should you pay your taxes with a credit card I think this question ties a little bit with how taxes work there are ways to reduce your taxes legally so I do highly suggest educating yourself with this knowledge and yeah learning about taxes is not the funnest thing but it is your money for me this year I learned something about hidden penalties I most like got hit with some penalties last year because I didn't send my tax estimates so it's these types of things where even if you pay your taxes with a credit card if you pay penalties and fees there is a certain extent to where the points can't save you but all in all what I can say is if you can make your points worth it if you know you'll be getting more points earnings than the fees that you'll be paying and you know how to redeem your points at a high Cent per point value that can really save yourself a lot of money when it comes to to redeeming those points so that's the answer for you let me know are you paying your taxes with the credit card thanks so much for watching I'll see you in another video bye