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Yes, earn… not pay. And you’ll actually profit 3.04%.

How to Earn 3.04% (Or More) Paying Tax This Quarter

Many of us have to pay taxes quarterly. My go-to card for this is the Citi Double Cash. As I outline in my article on paying taxes by credit card, you can’t lose on this payment method with a Double Cash. You can have a tiny gain or you can get a bigger gain if you wind up transferring your cash back to ThankYou points.

If you are in a cash crunch, you should avoid travel rewards credit cards until you are caught up. Here are our favorite credit cards for Intro 0% APR offers and for balance transfer offers

But even better is profiting by a minimum of 3.04% with a similar opportunity to outsize your returns.

One thing: You’ll need a Chase Freedom Flex credit card (or an older Chase Freedom) to do this. If you don’t have one yet, it’s not too late to get one and still do this.

One of this quarter’s “5X rotating bonus categories” for the Chase Freedom Flex and Chase Freedom (no longer available to new applicants) credit cards is PayPal. That means that for up to $1,500 in purchases at PayPal from Oct 1 to Dec 31, 2020, you’ll earn 5X rewards as long as you’ve opted-in to the quarter’s rotating categories.

How Can You Pay Taxes with PayPal?

You can pay estimated taxes at Pay USA Tax with a convenience fee of 1.96%.

While the limit of $1,500 (for the quarter) that will earn 5X isn’t a ton, anyone can pay tax this way (even if you aren’t self-employed, there’s no reason you can’t make an estimated payment and get a refund later if you don’t owe that much – though it’s a small interest free loan to Uncle Sam).

Paying the max of $1,500 will earn you $75 cashback in the form of 7,500 Chase Ultimate Rewards points.

The Math: Using PayPal in Q4 2020 to Pay Tax with a Chase Freedom Flex or Chase Freedom card

If you only have a Chase Freedom Flex or Chase Freedom, this is worth exactly $75 in rewards for a $29.40 convenience fee when you pay the maximum of $1,500. (After $1,500 in the quarter, you’ll only earn 1% back, which would be a money losing deal).

$45.60 is your gain. That’s as easy as it gets, assuming you weren’t already going to make other purchases this quarter using PayPal.

But if you have a Chase Sapphire Reserve and use the points at 1.5c per point (via the travel portal or via Pay Yourself Back), you’ve made $68.40.

Or, if you have a Chase Sapphire Reserve, Chase Sapphire Preferred or a Chase Ink Business Preferred, then you can also take advantage of all of the Chase travel partner transfers. My favorite is Hyatt where I always get at least 2 cents per point in value, making this deal worth over $91 to me.

Also see:


Let me know below in the comments, on Twitter, or in the private MilesTalk Facebook group.

And if this post helped you, please consider sharing it!

You can find credit cards that best match your spending habits and bonus categories at Your Best Credit Cards

New to all of this? My “introduction to miles and points” book, MilesTalk: Live Your Wildest Travel Dreams Using Miles and Points is available on Amazon and at major booksellers.

yottaWhat is Yotta Savings?: The Yotta Savigs account is a really fun way to earn interest at a higher rate than Marcus while having some fun each night when the Yotta prize ball drops. Currently, the statistical odds imply a net savings rate of between around 1% and 3% - at a time when banks like Marcus are offering a paltry 0.5%. Plus, it's fun! | Read my review of Yotta.

I got "in the game" in 2003 and since then I've collected literally millions and millions of frequent flyer miles and hotel points. I've flown around the world in first class seats that would cost $29,000 using frequent flyer miles and a few bucks in tax. And I've stayed in some of the finest hotels - all for free! A few years ago I realized many of my friends actually thought I was paying for these!! So I started sharing my tips. It's long been a passion, but when I hosted a session on Miles and Points at this year's South by Southwest festival, my love of the game intensified and this blog was born.


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