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One of the fastest methods to accumulate travel miles and points is to purchase gift cards (Visa Gift Cards or Mastercard Gift Cards) when they go on sale, either at office supply stores or grocery stores.

Whenever these promotions occur, you can rack up several thousand travel points, depending on the number of cards you buy and the number of times you visit these establishments.

This points-earning strategy involves using credit cards that generate spending bonuses at these aforementioned merchants when buying discounted gift cards.

These discounted gift cards can then be used to pay different types of taxes.

Whether you owe the IRS taxes come April 15th or prefer to send estimated taxes each quarter, anyone can use gift cards to pay their tax liabilities.

This blog post will walk you through the steps to using gift cards to send tax payments yourself.

I will list my recommended credit cards that earn bonus points when you use them at office supply stores, such as Staples or Office Depot, or groceries when buying gift cards.

Disclaimer: The following article is not tax advice. Please consult a tax professional to determine if the strategy outlined below is suitable for you.

2024 Updates

  • PayUSAtax has reduced their debit card fees from $2.20 to $2.14.
  • As of Feb 3rd, 2024, ACI Payments and PayUSA are not yet accepting Estimated Taxes for 2024, and there is no specific date yet when they’ll start taking payments.
  • Pay1040 will start accepting Estimated Taxes for 2024 on March 1st.

Why Send Estimated Taxes?

As per the IRS:

The Internal Revenue Service today announced that interest rates will increase for the calendar quarter beginning Oct.1, 2023.

For individuals, the rate for overpayments and underpayments will be 8% per year, compounded daily. Here is a complete list of the new rates:

  • 8% for overpayments (payments made in excess of the amount owed), 7% for corporations.
  • 5.5% for the portion of a corporate overpayment exceeding $10,000.
  • 8% for underpayments (taxes owed but not fully paid).
  • 10% for large corporate underpayments. 
Internal Revenue Services

Three IRS Payment Processors

The Internal Revenue Service (IRS) has approved three payment processors to accept and process online tax payments.

Each payment processor accepts a maximum of 2 payments each quarter, which means we can send a total of 6 tax payments using gift cards every quarter (3 IRS payment processors X 2 payments per quarter = 6 payments using gift cards).

Three IRS Payment Processors
ACI Payments/Official Payments

If you do this yearly, you can potentially send up to 24 gift card payments to the IRS (6 gift cards each quarter X 4 quarters = 24 gift card payments).

This is a remarkable avenue to convert those gift cards to cash.

IRS Payment ProcessorNumber of Payments Accepted
ACI Payments/Official Payments2 Each Quarter
Pay10402 Each Quarter
PayUSATax2 Each Quarter

Strategy: Use Gift Cards To Pay Taxes

Whether you are new to the hobby or a seasoned points enthusiast, the constant challenge is to determine effective ways by which you can effectively convert these gift cards into cash.

In this blog post, I will review the steps for using these gift cards to pay taxes, including income and estimated taxes.

The IRS encourages taxpayers to send money quarterly to avoid getting penalized for “underpaying” their taxes. These payments are called “Estimated Taxes”.

If you have a history of paying tax bills on April 15th, the strategy I will cover in this post may be a viable alternative to significantly reduce or even eliminate your tax liability come tax season.

With this approach, you will be using Visa Gift Cards (VGCs) or Mastercard Gift Cards (MCs) to pay your estimated taxes 4X/year, therefore, chipping away some of your tax liabilities once taxes are due.

Since these gift cards were purchased using credit cards that earn travel points and miles, the rewards you accrue from these transactions can be ultimately redeemed for free or discounted travel in the future.

If you still owe the IRS on April 15th despite sending estimated taxes, I suggest using your remaining gift cards to settle what you owe. Frankly, I am not sure until when the IRS will accept gift cards, so I try to maximize this option as much as possible.

Summary of Steps


Buy discounted gift cards from office supply stores and groceries using credit cards that offer category bonuses.

Occasionally, online gift card merchants, such as, also offer discounted gift cards, so make sure you take advantage of those as well.

I post these deals as I learn about them in our Travel Miles & Points Facebook Group. It is free to join.

Join Our Free Travel Miles & Points Facebook Group


Use these gift cards (Visa Gift Cards or Mastercard Gift Cards) to pay your estimated taxes.

Since you’ve already accrued travel points when you purchased these gift cards, you are indirectly earning miles and points from settling your tax payments.

Note: Aside from Estimated Taxes, I have also used gift cards to pay for my state taxes, payroll taxes, and LLC taxes.


Since these gift cards are considered “debit cards”, the fees you incur are relatively lower than when you use a credit card, thus saving some cash.

Heads Up: While the fees do not cost more than a few dollars, this payment option may not work for people who are naturally averse to paying extra charges, regardless of the amount.

This Strategy May Work If You….

  1. Currently, you have a stack of Visa Gift Cards (VGCs) and Mastercard Gift Cards (MCGC) at home, and you are running out of ideas on how to spend them reasonably.
  2. Have enough funds to pay off your credit card bills entirely on or before the due date so you can stockpile these gift cards without paying exorbitant credit card fees.
  3. Constantly owe the IRS at tax time, and you are open to spreading out your payments throughout the year by sending estimated taxes quarterly.
  4. Do not mind shelling out the small fee for using debit cards for estimated tax payments.

This Strategy May Not Work For You If….

  1. The IRS usually owes you a refund at tax time.
  2. You risk not paying off your credit card bills on time, which can hinder your ability to buy these gift cards in bulk.
  3. You are opposed to the likelihood of overpaying the IRS, even though the IRS will refund any overpayments.

Step-by-Step Guide on How to Use Gift Cards to Pay Estimated Taxes

IRS Guidelines (IRS.GOV)

  • You can pay online or over the phone (see Payment Processor Contact Information below for phone payments)
  • You can pay using digital wallets such as PayPal and Click to Pay
  • maximum number of card payments is allowed based on your tax and payment types.
  • Employers’ federal tax deposits cannot be paid by card; see how to pay employment taxes.
  • For card payments of $100,000 or more, special requirements may apply.
  • No part of the card service fee goes to the IRS.
  • You don’t need to send a voucher if you pay by card.
  • Card processing fees are tax deductible for business taxes.
  • You must contact the card processor to cancel a card payment.
  • IRS will refund any overpayment unless you owe a debt on your account.
  • Your card statement will list your payment as “United States Treasury Tax Payment” and your fee as “Tax Payment Convenience Fee” or something similar.
  • Federal tax lien releases can take up to 30 days after we receive full payment; liens may remain for other individuals who haven’t fully paid their portion.
  • When you pay while electronically filing your taxes, different card fees apply.

Fees Per IRS-Approved Payment Processor

As mentioned above, the IRS has approved three online payment processors that allow taxpayers to send tax payments electronically using a debit or credit card.

Current fees for each processor are posted on the IRS website.

However, fees change periodically, so click the button below for the most recent fee schedule update.


The IRS website also lists additional information for some frequently asked questions:

  • The card service fee does not go to the IRS.
  • There is no need to send a payment voucher if you pay by debit or credit card.
  • Card processing fees are not tax-deductible unless it is associated with business taxes.
  • Do not contact the IRS if you want to cancel a card payment. Contact the processor instead.
  • IRS will refund any overpayment unless you owe the IRS money.

Gift Cards Are Considered Debit Cards

The image below illustrates how much money you can save when paying taxes using gift cards (debit cards) instead of credit cards.


For example, if you pay $10,000 worth of taxes using a debit card on ACI Payments, you will only be charged a flat rate of $2.20 per gift card.

Conversely, if you use a credit card with ACI, you will owe a staggering $198.00 when paying the same tax amount.

Strategy: Buy gift cards using credit cards that give spending bonuses and use those gift cards to pay for estimated taxes to avoid the hefty credit card fees when using these IRS-approved payment processors.

Pro-Tip: Do not use an American Express Credit Card to purchase gift cards, especially when meeting a new card’s minimum spend requirement, as it is against their terms and conditions.

Processor #1: ACI Payments/Official Payments

Contact Information
ACI Payments, Inc.
Payment: 888-272-9829
Live Operator: 877-754-4420
Service: 877-754-4413
International Non Toll-Free
Payment: 334-521-3842

June 2023 Update: As reported in the comments by some readers, Mastercard Gift Cards from Staples/Office Depot are no longer accepted on ACI Payments. I hope that this is only a temporary issue.


Official Payments/ACI Payments is the most popular among the three processors.

ACI/Official Payments charges $2.20 for tax payments of no more than $10,000 (as of January 2024) when using a debit or gift card.

Have a $1000 gift card? Send them to the IRS and only pay the flat fee of $2.20 when you pay through Official Payments/ACI Payments.

The table below illustrates the taxes you’ll pay minus the fee when using Official Payments/ACI Payments.

Gift CardTaxFee
ACI/Official Payments


Create a profile with ACI Payments / Official Payments so your data is saved.

This expedites the process when you make future payments. They also keep receipts of all of your previous transactions.

Next, select the type of bill you want to pay – whether federal, state, or local.

I noticed that it is also possible to pay education-related expenses, although not all universities are listed.

Nevertheless, the list is comprehensive, so double-check that you are paying the correct “tax” category.


Navigate through the website until you are required to indicate the specific type of tax bill you want to pay.

If you are paying Federal Estimated Taxes, click Federal IRS Payments. You will then be directed to ACI Payment’s Federal Payment Site.

Next, select “Personal Tax Payments” and “Form 1040 Series.”

Choose the type of tax you intend to pay.

If you are sending Estimated Taxes, select “Estimated Tax- (tax year)” to send advanced payments to the IRS each quarter.

Don’t forget to check out the other potential tax bills you can pay with gift cards, as there are multiple options.


Fill out the necessary information, such as Payment Amount and Payment Option.

Make sure to deduct the debit card fee manually.

Pay close attention to the amount you’re subtracting, as the debit card fee varies across payment processors.

In the scenario below, I had to deduct the $2.20 debit card flat fee from the total value of my $200 gift card since I was using ACI Payments.

Therefore, I typed $197.80 to drain my gift card completely.

This crucial step must be carried out correctly; otherwise, your payment will either not go through since the payment amount exceeds the total value of your gift card, or you will have extra change remaining on your cards.

The goal is to wipe out the value of your gift cards entirely. Every penny counts.

The table below summarizes the taxes (minus the fees) you can pay with various gift card denominations for each processor.

Gift CardACI Payments
($2.20 fee)
($2.20 fee)
($2.50 fee)


Proceed to the following payment steps. In the image below, notice that Official Payment/ACI only charged me $2.20 because it automatically detected that I was using a debit card to pay.

Again, gift cards are processed the same way as debit cards; therefore, the service fees are considerably cheaper.


Next, you will be asked to review the information before submission.

Once you have verified that all the information is correct, click pay.

Afterward, you will receive confirmation that your payment has been successfully processed.

Note: These gift cards may be used even if they haven’t been registered online. After paying, I keep all my tax receipts and upload them to Google Drive. You can also print the receipts and attach the gift cards for documentation. Finally, I record all of my payments in a spreadsheet to keep track of how much estimated taxes I have sent to the IRS for the year.

STEP 7: (ACI Payments) will allow a maximum of 2 payments each quarter.

Should you need to liquidate more than two gift cards, you can utilize ($2.20 fee) or ($2.50 fee).

The following sections will walk you through how to pay taxes using these payment processors.

As mentioned above, both processors will allow a maximum of 2 payments per quarter, similar to ACI Payments.

In short, anyone can send six separate gift card payments to the IRS each quarter!

Pro-Tip: Don’t worry about overpaying. The IRS will send you a refund if you do.


Set the alarm to remind you of the quarterly due dates of future estimated taxes.

Payment PeriodDue Date
1st Quarter: January 1 – March 31April 15th
2nd Quarter: April 1 – June 30June 15th
3rd Quarter: July 1 – September 30September 15th
4th Quarter: October 1 – December 31January 15th
As per IRS: If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that’s not a Saturday, Sunday, or legal holiday.

Processor #2:

Contact Information
Payment: 888-729-1040
Service: 888-658-5465
International Non Toll-Free
Live Operator: 501-748-8507
June 2023 Update: As reported in the comments by some readers, Mastercard Gift Cards from Staples/Office Depot are no longer accepted on Pay1040. I hope that this is only a temporary issue.

Step 1: Click Make a Payment on

Step 2: Select the correct form and type in the correct amount

  • Tax Category
  • Tax Form: I chose Form 1040-ES Estimated Taxes
  • Tax Form Option: I selected Estimated Tax-2023
  • Tax Year: 2023
  • Payment Amount: Make sure to deduct the $ 2.50 debit card fee from the gift card value. In my case, I liquidated a $200 gift card, so I typed in $197.50 as the payment amount.
  • Filing Location: Within the US

Step 3: Confirm that all the amounts are correct

Since my gift card has a total value of $200, I subtracted the Pay1040 debit card fee of $2.50.

This way, I will not have any money left on the gift card since I aim to liquidate it entirely in one fell swoop.

Step 4: Print out or save a PDF file in Google Drive for bookkeeping

To organize my receipts, I upload them in Google Drive labeled “2023 Fed Estimated Taxes” so it is easier to locate them come tax time.

Heads Up: Similar to ACI Payments, allows taxpayers to send two identical payments. You will be notified to review and confirm the amounts you are sending and follow the prompts to “Process Payment“.

Processor #3:

Contact Information
Payment: 844-729-8298
Live Operator: 855-508-0159
Service: 844-825-8729
International Non Toll-Free
Payment: 615-550-1491
Live Operator: 615-942-1141
Service: 615-550-1492
June 2023 Update: When making two payments, ensure that the second payment is changed by 1 cent (e.g., $197.86 & $197.85).
February 2024 Update: Debit Card Fee is now $2.14

Before Using PayUSATax: Register Your Cards

As an added layer of verification & security, it appears that PayUSATax requires the zip code in the gift cards to match the payer’s address.

Therefore, you must register your gift cards before using them on PayUSATax.

To register your gift cards, please visit the website printed on the back of your cards.

Step 1: Select the type of payment you would like to send to the IRS

The image below shows that I selected to pay my Personal Federal Estimated Taxes for the year (Form 1040-ES).

I can also use this service to pay my current tax returns as well as prior tax returns.

Step 2: Enter Payment Details

Since charges a flat rate of $2.20 when using debit cards, I deducted that amount from the total value of the gift card I was liquidating.

Because I had a $200 gift card, I typed in $197.80 as my payment amount.

This ensures that I completely redeem the entire amount on my gift card.

Step 3: Review the Information and Proceed with the Payment

I save the receipt on my Google Drive for easy access during tax time.

I also entered the amount on a spreadsheet to track the total estimated taxes I had sent to the IRS for the year.

Possible Issue on will allow only one payment of the same amount. A way to get around this roadblock is to change the amount of the second gift card by one cent. In my case, I successfully used 2 $200 gift cards by paying $197.79 and $197.80, respectively. See the image below.

Recommended Credit Cards When Buying Gift Cards

Office Supply Stores

Ink Business Cash® Credit Card (5X at Office Supply Stores)


Ink Business Cash® Credit Card
Annual Fee: $0
Intro Offer: Check the Current Welcome Offer
Earn: 5% on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone services per cardmember year.
Learn More about the Ink Business Cash Here

Grocery Stores

Grocery stores such as Safeway, Albertsons, etc., frequently offer generous coupons that wipe out the gift cards’ expensive activation fees.

You must use a credit card with a grocery category bonus to maximize grocery spending bonuses.

The Citi Premier® Card and the American Express® Gold Card* are some of the best credit cards for purchasing gift cards at grocery stores.

Citi Premier® Card (3X at Grocery Stores)

*Even though the American Express® Gold Card earns 4X at grocery stores, I do not suggest using it when buying multiple gift cards when meeting a minimum spend requirement. AMEX is known to claw back welcome bonuses if the spending requirement was met through the purchase of gift cards.

Read If You Plan To Use the Ink Business Cash® Credit Card

In this bonus section, I will calculate the monetary value of the points obtained from purchasing gift cards when using a no-annual-fee Chase card like the Ink Business Cash® Credit Card.

At the bare minimum, each point will have a valuation of 1 cent per point if withdrawn as cash. See the table below for the cashback equivalent.

Gift Card Amount Points Earned
(5X multiplier)
Cashback Value
$100500 points$5
$2001000 points$10
$5002500 points$25
$10005000 points$50

At face value, these 1-cent per point rewards do not appear to be incredibly lucrative.

However, if you also own one of Chase’s premium cards, the Chase Sapphire Preferred® Card, Chase Sapphire Reserve®, or the Chase Ink Preferred® Credit Card, several other redemption alternatives become available.

These credit cards are considered premium because they charge an annual fee.

Once your points are transferred from a no-annual-fee Chase card to a premium Chase card, other options with a value of over 1 cent per point become available.

Therefore, I make sure to transfer all of my Chase points to a premium card before redeeming.

Convert Cash back points to Chase travel points

In fact, it is not uncommon to extract at least 2 cents per point if you thoroughly explore your choices.

For example, I have stayed at Ventana Big Sur and Park Hyatt Kyoto for free using points accrued from the gift cards I have used to pay estimated taxes over the years.

Each night at these aspirational properties costs at least $1,500!

Yet, it only required 40,000 Chase Ultimate Rewards Points transferred to the World of Hyatt to book this incredible redemption.

Deep Dive: Transferring Chase Points Between Accounts

As mentioned above, you need to be familiar with the process of moving your no-annual-fee Chase cashback points to one of Chase’s premium cards to convert them into transferable travel points.

Again, since premium cards charge annual fees, they provide card members additional perks, such as having the ability to transfer points to travel partners for free flights and hotel stays.

With my Ventana example, I transferred my no-annual-fee Ink Business Cash® Credit Card points to my Chase Sapphire Reserve® account, a premium card.

Then, I transferred my Chase Ultimate Rewards Points to my World of Hyatt account, giving me free stays in luxurious properties I could not otherwise afford.

Repeatedly purchasing these gift cards will produce an enormous sum of points.

You will find yourself booking a splendid vacation somewhere far away, for free or at a significant discount, in no time.

$1000 Gift Cards At Simon Malls

Do you tend to owe a lot of taxes come tax season?

Simon Malls sell $1000 gift cards that you can use to pay estimated taxes.

As previously mentioned, using a gift card essentially avoids hefty credit card fees, as these IRS payment processors consider gift cards as debit cards.

Therefore, it is recommended to use a new credit card with a generous welcome bonus to purchase these gift cards at Simon Malls and then use those Simon Mall gift cards to pay for your Estimated Taxes.

However, this only works for certain banks.

Do not use an American Express credit card when carrying out this strategy, as purchasing gift cards to meet minimum spending requirements, particularly at Simon Malls, is against their terms and conditions.

Saving More Cash

If you have a new non-Amex credit card for which you need to meet the minimum spending requirement, a recommended strategy is to purchase these gift cards when they go on sale at office supply stores, groceries, or Simon Mall.

Then, use these gift cards to pay for estimated taxes or any type of organic spending.

$1000 Estimated TaxesOfficial PaymentsPayUSAtaxPay1040
Credit Card Fees$19.80$19.60$18.70
Debit Card Fees$2.20$2.20$2.50
Gift Card Fees$2.20$2.20$2.50


1. Taxes Owed: $410

I owe $410 in income taxes, and I only have two gift cards, each worth $200. What is your recommendation?

a. Use ACI Payments to pay $197.80
b. Send another $197.80 payment through ACI Payments
c. Use a credit card to pay the remaining $4.40.
2. Taxes Owed: $9000

We owe $9000 worth of taxes. Any tips?

Credit Card Route: “Apply for 2-3 new credit cards and use them to earn generous welcome bonuses”

Gift Card Route:Send 5 gift card payments to the IRS, and the 6th payment can be a new credit card that earns a generous welcome bonus”.

Final Thoughts

I am a huge fan of gift card promotions, and I try to take advantage of them every opportunity I have.

However, this is a gentle reminder to purchase only the number of gift cards you can comfortably pay for once your credit card statement arrives.

A common dilemma that points enthusiasts face is determining sensible ways to spend these gift cards, as options have significantly dwindled in the past few years.

I hope the strategy I outlined in this blog post opens up another pathway for you to liquidate these gift cards into money.

Above all, I relish the notion that I can get a free flight or hotel stay from paying taxes, as it softens the blow of this financial burden.

Please let me know in the comments section if you were able to carry out this strategy too successfully.

EDITORIAL DISCLOSURE – Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. The content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.