Tax Time, Reward Time: Leverage Payments for Big Perks

How Paying the IRS Can Actually Work in Your Favor

Opening new credit card accounts to earn sign-up bonuses is one of the best returns on your time. Why? Because hitting a spending requirement of, say, $4,000 might land you a reward worth $600 or more—equivalent to a 15%+ cashback. That's a great “side hustle” for anyone who enjoys travel or stacking rewards.

Of course, there’s a catch: hitting all those minimum spends isn’t easy. If you and your spouse open multiple cards a year, you might need to put tens of thousands of dollars on cards annually—and unless you're living large, that’s a serious challenge.

This is where tax season becomes your secret weapon. You can pay your federal taxes with a credit card. Yes, there’s a fee—usually around 1.85% to 2.3%—but if you're aiming for a valuable sign-up bonus, the math often works in your favor. In many cases, you come out ahead, especially when timing your payments strategically.

What I Paid (And What I Gained)

For the 2024 tax year, I owed around $17,000 in federal taxes. Painful? Yes. But I saw it as a golden opportunity.

Recently, both the Amex Business Platinum and Amex Business Gold cards had incredible offers:

• Business Platinum: Spend $15,000 → Earn 250,000 Membership Rewards (MR)
• Business Gold: Spend $10,000 → Earn 200,000 MR

My spouse (Player 2) and I each opened one of these cards. That means we’re looking at $50,000 in total spending, which unlocks 900,000 MR points in total.

Membership Rewards points can be easily redeemed at 1 cent per point (1cpp)—so that’s $9,000 in value right there. With just a little know-how, you can push that to 1.15cpp or even 1.3cpp, making these points worth over $11,000.

To meet the spending requirements, I had a plan:

• Pay property tax (this covers one Platinum card's requirement)
• Pay $17,000 in federal taxes (this covers about 1.7 Gold cards)
• For the remaining $18,000, I’ll be using my secret sauce to meet the requirement. (Stay tuned in Milespot for more tips and secrets.)

So yeah—by turning $17,000 in federal tax payment with a fee of $314.5 into 357,000 MR points, I’m looking at around $3,255.5 in value (and potentially more with better redemption options). That’s how I make tax season work for me.

Breaking Down the Math

• Earned:
  • 340,000 MR (Sign-up bonus)
  • 17,000 MR (1x reward from spending)
• Paid:
  • $314.5 (Card fee)

This is the power of strategic spending during tax season.