It’s the beginning of a new year and that means tax time is upon us. What are you planning on doing with your tax refund? Looking to pay some bills? Go shopping? Possibly travel? Whatever you plan to do, make sure you maximize your points/cash back! There are plenty of opportunities to earn extra points/ cash back, so don’t let them pass you by.
Hopefully all of you will receive some sort of tax refund, but if you have to pay the IRS, there are ways to earn points or cash back. Companies like H&R Block and TurboTax even offer incentives to use their products and can increase the value of your tax return. If you use an accountant, you could potentially earn points/ cash back on that transaction as well.
If you file your own taxes, what ways can you maximize your point/ cash back earnings?
Before even starting your tax paperwork, you should use shopping portals to see which site earns you the most points or cash back. You will see cashback can range from 10-20% or you can earn an extra 10+ points per dollar. There is no excuse not to take advantage of these shopping portals!
**If you are a Discover Card holder, I noticed Discover Deals is offering 25% bonus cash back until 1/31/15!! When you redeem your Discover Cashback for partner gift cards, you will also receive an extra 25% onto your gift card! This turns into roughly 33% cash back!! WOW!! 😀 **
If you bought the H&R Block Deluxe Version for 39.99 through Discover Deals, you would receive about $10.40 (1% on all purchases plus the extra 25% bonus cash). When you redeem it for a partner gift card, you will receive 25% more, bringing total to roughly $13 in cash back total! That’s an awesome amount of cash back! Now if only we could get 30% on all transactions ;-).
Both H&R Block and TurboTax are both currently offering extra incentives to use their product.
TurboTax will give you up to 10% more on your tax return if you put part or all of your tax refund on an Amazon gift card. So if your tax refund is $1,000, you could turn that into an $1,100 Amazon gift card! If you shop at Amazon regularly, this could be a great option for you! Especially if you use a cash back portal when you use your Amazon gift card! Earn even more!
H&R Block will give you up to 10% more on your tax return if you put part or all of your refund on participating gift cards. There is a long list of retailers that are participating in their promotion. If your tax refund is $1,000 you could receive up to $1,100 on gift cards.
These are good options if you shop at one of these stores regularly because you will receive an extra 10% on top of your tax refund. You can take those gift cards and use shopping portals to earn even more!
Both products should give you the same tax refund amounts, so I use which ever will earn me more, both with shopping portals and promotions. If you were planning on using your tax refund on Amazon, TurboTax might be the better option for you (even if the points/ cashback is lower). If you prefer shopping at one of the participating retailers, H&R Bock might be the better option. Groupon does offer travel (hotels an getaways) as well, so that 10% extra could help you travel for less! The choice is yours, there is no wrong answer.
What if you have to pay the IRS?
If you owe the IRS money :-(, you can still purchase your TurboTax or H&R Block though a shopping portal and earn some points or cash back! So that’s a start! I always try to maximize point/cash back earning because no matter how small, it adds up!
Options for paying taxes and earning rewards:
- Debit Cards
- American Express Serve/Bluebird
- Credit Card
If you have a miles earning debit account like, Suntrust Delta Debit Card (No longer available for new applicants) or UFB American Airline Debit Card (earn 1 mile for every $2 spent), you can pay your taxes and earn airline miles in the process. Paying with a debit card usually is a flat fee, unlike a credit card which charges a percentage.
Using your American Express Serve Card. You can load this card with your point/ cashback earning credit card then use the American Express Serve to pay your taxes. Depending on the amount you owe, this might not be the most ideal option because of the loading limits on Serve.
**Remember you can load up to $1,000 onto your Serve monthly, or if you have the Soft Card Serve, you can load up to $1,500 monthly. So be aware, depending on the amount you owe, it could take a couple of months to load enough money onto card. This might not be an option if you owe too much!**
You can use your Bluebird (similar to Serve), but loading money onto the card is time consuming because you must load gift cards onto it. You cannot directly load from a credit card. To me, this takes too much time and not worth the effort, especially since I can load directly to Serve via credit card and earn 2% with no effort.
Paying your taxes with a credit card is an option, but it is usually not a good option. Paying taxes with a credit card, processors charge a percentage of your total bill. For example, if your tax bill is $5,000 and the fee is 1.87%, you’ll pay $5093.50. If you valued your points at 2 cents each, you’re making 0.13%. You are probably better off loading your Serve card with your credit card and paying your taxes for a flat fee, if possible.
I think it only make sense to pay with a credit card, if you are trying to reach a minimum spending goal, and having difficultly reaching the spending requirement. For example, if you are having difficulty reaching the $5,000 spending requirement on your Chase Ink Plus for 50,000 Ultimate Reward points, this would be worth paying the fee. The cash value of 50,000 Ultimate Reward points is $500 making the $93.50 worth it, if you wouldn’t reach the requirement any other way. I value Ultimate Rewards at 1.8 cents, so 50,000 Ultimate Reward points is worth roughly $900. It’s well worth paying the $93.50 in fees, if I were going to miss the bonus.
If you have a personal accountant, this is dependent on forms of payment they’ll accept. If they charge you a flat fee, paying with your credit card could be the best option. If they do not accept credit cards, you could possibly pay with your Serve card, either via check or as debit. If you have the Delta Suntrust Debit Card or UFB Debit Card, this could also be an option. Each accountant is different, so be sure you know what form of payment they will accept!
There is no excuse why you can’t earn some extra points/ cash back on filing your taxes. Take advantage of the shopping portals and potentially the incentives by TurboTax and H&R Block to help increase your tax return. These can help you reach your next destination for less on your wallet!
How do you plan to spend your tax refund? Which incentive are you more likely to use, TurboTax and Amazon or H&R Block and List of Retailers?