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Get 5% Citi CashReturns card - Pay income tax - net 2.5% profit Archived From: Finance

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   posted: Jan. 28, 2008 @ 7:32p
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Here's a new spin on an old offer.

 

A new Citi CashReturns card is still offering 5% Cash Back for three months. The CashBack is truly Cash Back. If at the end of the month you are over $50, you get the entire amount as a check, not fiddling with points and gift cards. If you are below $50, the amount carries forward to the next month. I got a card last week so I know that the offer is still valid.

 

The new twist is to use the card to pay your income taxes. Two sites can be used to pay Federal and State income taxes (and some local taxes). You can also pay estimated tax.

 

These sites charge a 2.49% 'convenience fee' which is a bit steep but if you use the CashReturns card you will net out 2.51% plus get a bit of float on your payment. Also, if the available credit is not high enough on the new card, if you have another Citi card, you can call and have the CSR increase the new card and decrease the older card.


Official Payments


Pay1040

   posted: Jan. 28, 2008 @ 7:33p

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

   posted: Jan. 28, 2008 @ 8:31p
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what exactly is new about it?

   posted: Jan. 28, 2008 @ 8:39p
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you can also "overpay" the irs. Then they realize you paid them too much and issue you a check. But before they do, you have CashBack rebate of ~2.49%

   posted: Jan. 28, 2008 @ 10:13p
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Some were doing this way back in 07.

   posted: Jan. 28, 2008 @ 10:29p
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How much can you overpay? Say I only owe about $100, could I pay $5000?

   posted: Jan. 28, 2008 @ 10:38p
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sirfergy said:How much can you overpay? Say I only owe about $100, could I pay $5000?Yes, there is not limit, but they will hold your refund for an extra couple of months.

   posted: Jan. 28, 2008 @ 11:15p
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ANightShopper said:sirfergy said:How much can you overpay? Say I only owe about $100, could I pay $5000?Yes, there is not limit, but they will hold your refund for an extra couple of months.

at today's short-term rates, that's still a net win proposition.

So let me get this straight.

Can I 'overpay' the IRS by my credit limit (say, $25k) even if I am due a refund? And earn a net 2.5% of 25k = $625 after fees without arousing any suspicion or violating any rules or laws? This seems... too easy.

   posted: Jan. 29, 2008 @ 2:15a
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I wouldn't mess around too much with the IRS.

With that said, the IRS isn't the one that is going to be paying any extra money if you overpay (That's what the 2.5% convenience charge is for). If anything they are making some free interest in the months it takes to mail you the check. It is Citi that is getting the short end of the stick if you do this.

   posted: Jan. 29, 2008 @ 7:57a
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psychtobe said:

Can I 'overpay' the IRS by my credit limit (say, $25k) even if I am due a refund? And earn a net 2.5% of 25k = $625 after fees without arousing any suspicion or violating any rules or laws? This seems... too easy.

If someone came to you and said "will you hold this 25k for me and give it back in 2 months...and in the meantime please use it to earn interest..."
it's a no brainer as long as you get ur 5% Cash Back.

   posted: Jan. 29, 2008 @ 8:37a
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Somehow I don't think I'll risk awakening the beast to overpay my $2,000 owed with a $25,000 payment, but it is an interesting thought, and considering in addittion to the 2.51% profit, I also can hold my money for the extra 30 days or so until my credit card deducts it from my HYS.

   posted: Jan. 29, 2008 @ 8:57a
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I think that you could legitimately "overpay" one or two decimal points. People make math errors all the time. If you owe $198.24, then "accidentally" pay $1,982.40 or $19,824.00 There'd be no questions asked, just a refund check.

   posted: Jan. 29, 2008 @ 10:22a
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Citi I can deal with. IRS... no thanks. I've got better things to do.

so... is there any risk from the IRS itself?

   posted: Jan. 29, 2008 @ 12:53p
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There are reports of Citi canceling some accounts where there were big charges and/or big mid-cycle payments. If that happens, your return will be -2.49% + loss of interest. So you may want to be careful.

   posted: Jan. 29, 2008 @ 1:16p
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*kicks myself-- i just put my tuition on my chase 1% card then paid it in cash 17k ( never again). Hopefully they will have this in about 6 months

   posted: Jan. 29, 2008 @ 1:29p
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1. Paying taxes with the Citi CashReturns card has been exhaustively covered in the original thread.

2. You can overpay your federal and state income taxes by a million dollars if you want. You just have to wait until you file your return to get your refund. And you generally won't get any interest on your overpayment.

3. For federal payments, Official Payments limits you to two online payments per quarter. However, if you need to make additional payments for the quarter, you can call them & they will process. I have done this.

Edit to add #3.

   posted: Jan. 29, 2008 @ 3:02p
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You've gotta be kidding me. People are so cowed by the IRS that they're scared to send them an interest free loan?!? They like interest free loans! Sheesh, the irrational, base fear of the IRS that some people harbor will never cease to amaze me.

   posted: Jan. 29, 2008 @ 3:34p
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FYI it's more than 2.51%

If you actually do the full math, it is about 2.6345%

The reason for this is you get 5% return on the full amount of the tax charged + the 2.49% fee

The math is:
.05*1.0249-.0249 = .026345

   posted: Jan. 29, 2008 @ 4:42p
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Just open a merchant account and use that. They are some 3rd party processors like 2checkout, etc.

   posted: Jan. 29, 2008 @ 7:03p
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Has this actually happened to anyone, what was Citi's reasoning.


hguy229 said:There are reports of Citi canceling some accounts where there were big charges and/or big mid-cycle payments. If that happens, your return will be -2.49% + loss of interest. So you may want to be careful.

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