needs Kasheesh
In this guide, we’ll cover how to split a tax payment across multiple credit cards, the benefits and limitations, and how a tool like Kasheesh can simplify the process.
With tax bills often running high, many taxpayers wonder if it’s possible to split their payments across two or multiple credit cards. Doing so can help you manage card balances by spreading out the large payment and meet minimum spending requirements on several credit cards to maximize rewards.
Why Split Your Tax Payment Across Multiple Credit Cards?
Splitting your tax payment across multiple credit cards can offer several advantages:
- Cash Flow Flexibility: Using multiple cards can ease the burden on any single card’s credit limit, helping you stay within available credit and avoiding the negative impact on your credit card from maxing out a card.
- Rewards Optimization: Splitting payments allows you to earn points, miles, or cash back on several cards to maximize your rewards.
- Meeting Minimum Spending Requirements: For new credit cards with sign-up bonuses, tax payments can help you quickly reach spending requirements by spreading the amount across several cards at once.
- 0% APR Opportunities: Some cards offer 0% introductory APR on purchases, allowing you to manage payments over time without incurring interest charges.
- Protect your Credit Score: Spreading out a large tax payment between multiple cards can help you avoid maxing out a credit card which would negatively impact your credit score.
Using Kasheesh to Automatically Split Your Tax Payment
Kasheesh is a fintech tool that simplifies the process of using multiple cards by allowing you to split a tax payment (or any other payment) across up to five cards in a single transaction.
Here’s how Kasheesh works:
1. Single Payment with Multiple Cards
Kasheesh enables you to use up to five cards for one payment, including any combination of credit, debit, and prepaid gift cards.
3. Easy Customization
You can decide how much to allocate to each of your cards, allowing you to optimize rewards, cash flow, and even meet spending requirements on multiple cards.
2. Helps You Avoid the High Credit Card Fees
Kasheesh works by letting you generate a virtual Mastercard debit card that links to your chosen credit cards.
Tax processors will treat it as a debit card payment, adding only a low flat fee of around $2 instead of the usual percentage-based credit card fee, while your credit cards are being charged through Kasheesh.
Typically, using Kasheesh comes with its own 2% processing fee, but this fee can be avoided by making your tax payment during one of their frequent promotional periods. Kasheesh runs “no fee” or “reduced fee” promotions for a couple of weeks each month (details are posted on the company blog), which is the perfect timing to get your tax payments done while avoiding credit card fees.
With Kasheesh, you get the flexibility to split payments and save on fees, making it easier and more affordable to manage tax payments with multiple cards.
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How to Split Tax Payments Manually
Unfortunately, traditional tax payment processors don’t typically allow you to split a single tax payment across multiple credit cards within the same transaction.
However, there is a way to manually split your taxes between two cards by following these steps:
- Calculate Partial Payments: Determine how much you’d like to charge to each credit card, ensuring the amounts add up to the total tax owed.
- Make Separate Payments: Use each card to make separate payments through an IRS-approved processor like PayUSAtax, Pay1040, or ACI Payments, Inc. Just make sure you keep track of each payment confirmation for accurate records.
- Monitor Payment Confirmations: Ensure you receive a confirmation for each payment and keep these records for tax purposes.
While this approach may be a bit cumbersome, it can work if you only need to use two cards in the same tax period.
Tips for Managing Multiple Credit Card Payments
It's important to keep track of all your credit card payments when juggling multiple accounts, here are some strategies to make it easer:
Enable automatic payments
To ensure you never miss a payment, consider enabling automatic payments. Even if you prefer handling bills manually, setting up autopay as a backup can offer peace of mind.
Set up Payment Reminders
Most credit card companies offer various alert options, such as notifications when your statement is ready, when your bill is due within a certain timeframe, or when a payment has posted. You can also create alerts on your phone or in your calendar to stay on top of payment deadlines.
If you’re taking advantage of a 0% APR offer to give yourself more time to pay it back, set reminders to pay off balances before the promotional period ends.
Adjust due dates
If your current due date isn’t convenient, many card issuers allow you to change it. You might choose a date that aligns with your payday, for example. If you have multiple cards with the same issuer, setting them to the same due date can streamline payments, letting you manage all your bills with one login each month.
Also consider:
Conclusion
Splitting your tax payment across multiple credit cards is possible and can be beneficial for those looking to maximize rewards or manage their finances more flexibly.
While the manual approach can be complex and costly due to multiple transaction fees, Kasheesh offers a seamless solution, allowing you to use up to five cards in a single payment with reduced fees.
By taking advantage of tools like Kasheesh and planning your strategy carefully, you can manage your tax payments more effectively, save on fees, and even earn valuable rewards.
Not using Kasheesh yet? The easiest way to split your tax payment across multiple cards:
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FAQ
Is it allowed to split tax payments between multiple credit cards?
Yes, it’s allowed to split tax payments across multiple credit cards. This typically requires making two individual payments if you’re doing it manually, but using Kasheesh allows you to split payments across up to five cards in a single transaction.
Will Kasheesh charge a fee for splitting payments?
Kasheesh generally has a 2% processing fee, but this fee is often waived during frequent promotional periods. Check the Kasheesh blog for the latest updates on fee free periods, which usually last a couple of weeks each month.
Is it possible to pay the IRS with a credit card?
Yes, the IRS allows credit card payments through authorized third-party processors.
Is it worth it to pay taxes with a credit card?
Yes it can be worth it if you’re earning valuable rewards or want to meet a spending requirement to get a bonus on a new credit card, but the processing fees may outweigh these benefits. Using Kasheesh can help you avoid the higher credit card fee.
Is it better to pay taxes with a credit card or IRS payment plan?
It depends on your financial situation. Credit cards offer rewards and flexibility but incur fees, while IRS payment plans may have lower fees but include interest on unpaid balances. And, unless you apply for a credit card with a 0% APR period, unpaid credit card balances can also start incurring interest.
Is there a penalty for paying taxes with a credit card?
No, there is no direct penalty, but you’ll have to pay a processing fee of around 1.87%–1.98% of the tax amount, unless you use Kasheesh to avoid the higher credit card fee.
