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Wednesday, March 12, 2008

Making taxes more rewarding

With the April 15 deadline for filing taxes around the corner, the Fool.com article talks about potentially making the chore of filing taxes more rewarding. How? By charging your tax payments to a cash rewards credit card. However, as the tax payments with the credit cards are processed through third-party service providers who usually tack on additional fee of over 2%, you need to ensure that the cash rewards you get from your credit card exceed that additional fee.

Earning 5% can get you $250 on a $5,000 tax bill. But be careful -- there's a catch. When we pay our taxes with plastic, we do so through third-party service providers, and they typically charge a 2.49% fee. That's not chicken feed. If you owe $5,000, for example, you'll fork over an extra $125 -- just for the privilege of not writing a check. Is that really worth it?

If you make $250 via your credit card cash-back program and pay the $125, you'll still come out ahead. But if your cash back is just 1%, giving you $50, you'll end up in the red. Better to opt for a dollar or so in postage.

For complete article, see:

Yahoo/Fool.com: Can You Make Money Paying Your Taxes?

Points.com eLearners Earn Rewards at MyPoints.

posted by Ruby @ 7:39 AM

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