# Income Tax via Amex Card



## blackduff (Mar 19, 2013)

Does anyone here pay their taxes to the IRS via a credit card. Since, living outside of the US, I cannot make a electronic report. So, how can I pay with a credit card.

My niece I might be able to pay in advance. This would be okay, since I know how much I'll have to pay before it has to be paid. But how does this work?

Has anybody using this method of payment?

Blackduff


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## Davis1 (Feb 20, 2009)

Make a Payment


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## BBCWatcher (Dec 28, 2012)

As you can see you'll pay a minimum of 1.89% if you pay your U.S. taxes with an American Express charge card or credit card. If your American Express card is not a U.S. card then you'll also likely pay a foreign exchange fee which could be 3% or more. On top of all that if you don't pay the balance in full on your card then you'll pay credit card interest.

There are almost always better (less expensive) ways to pay the IRS. CurrencyFair, for example, can pull funds from your French bank account via SEPA, convert from euro to dollars at a very good rate, and pay the IRS (or anybody else in the U.S.) via ACH (EFT). That'll be MUCH cheaper, and they're just one example.


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## BBCWatcher (Dec 28, 2012)

To elaborate a bit, please make sure whatever currency/money transfer service you select can actually pay the IRS. Ask the service if in doubt, and consider making a test payment (assuming low or zero fixed fees). Xoom is another example of a money transfer specialist, and there are many others.


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## blackduff (Mar 19, 2013)

Thanks for the responses. BBCWatcher's posts gives a deep thought about the price of using the credit card. 

Davis' also gives some ideas. I could pay in advance to next years payments now. If I pay too much, normally they return the over-payment. For 2012's the IRS hasn't returned this over-payment ~ it seems the politics is slowing my return.

"Horizontal Reasoning" was often used in business and it's a good time to become Horizontal Taxing. I'll look into the BBCWatcher's mention about the FX companies.

The "Western Union" system still works here in France. I've sent money to Thailand and it works fine. Maybe this is the cheapest and it's fast too.

I love the forum since it's not required to give precise answers. Giving a good thought to chew about in the mouth gives a good answer. Thanks people.

Blackduff


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## Bevdeforges (Nov 16, 2007)

Just curious - has anyone tried using that EFTPS system mentioned on the IRS website? It's supposed to be the only free method of making electronic tax payments - but I have to wonder if there is a catch somewhere.

Would love to hear of anyone's experience with the system.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Bevdeforges said:


> Just curious - has anyone tried using that EFTPS system mentioned on the IRS website? It's supposed to be the only free method of making electronic tax payments - but I have to wonder if there is a catch somewhere.


The only "catch" is that you must have a U.S. bank account to use the IRS's EFTPS -- something with a U.S. ACH routing number and account number from which the IRS can pull money. You can't "push" this way to the IRS.

If you can get a U.S. bank account, great. There are free ones that work fine, and I could recommend several. (American Express's Bluebird is simple and affordable, as one example. And Bluebird can pay the IRS or just about anybody else in the U.S., though please note it has a $10,000 monthly maximum on bill payments. Stop at any Walmart in the U.S. to open a Bluebird account, or you can sign up online and get a Bluebird card mailed within the U.S.) To get money (e.g. euro from France) into a U.S. bank account you can use CurrencyFair, Xoom, or any of several other low cost money transfer specialists. Then you can pull the dollars out of that U.S. account via the IRS's EFTPS.

Or, alternatively, if the money transfer specialist can pay the IRS directly and at low cost -- via a mailed paper check if necessary -- great, that works. The IRS still accepts paper checks sent by mail. As long as you can get your U.S. Social Security number (or TIN) printed on the check, a tax year, and (preferably) a reference to the type of payment, you're good. Example: "2013 Form 1040ES, SS# 000-11-2222" on a paper check works great for making an estimated tax payment for tax year 2013 -- the IRS will process that check even if they don't get an estimated tax slip.

Most U.S. "bill pay" services allow you to specify your account number for the particular biller (which for the IRS is your Social Security number or TIN) and a "memo" line (e.g. "2013 Form 1040ES"). If so, you're all set -- you can pay the IRS using "Bill Pay" from that account.

As yet another option which might be affordable in certain countries, your foreign (non-U.S.) bank might be able to issue a U.S. dollar "foreign draft" (a.k.a. "demand draft"). This type of paper check is drawn on the U.S. account of a cooperating bank in the U.S., so the IRS (or anybody else in the U.S.) can accept it because it is a U.S. check. Often these types of checks are expensive to buy, but sometimes you can get lucky and find a bank that will issue one at a reasonable cost. Then you just mail the check to your recipient (e.g. IRS) and you've paid your bill. (A registered mail service might be a good idea.)


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## BBCWatcher (Dec 28, 2012)

By the way, I did a little checking to see what the debit card foreign exchange rates are among French banks. The best I could find was ING France and its 2% foreign currency fee. That plus the ~$2-$3 debit card fee to pay the IRS via a debit card processor in the U.S. isn't such a great deal, in my opinion. And it assumes you have an account with ING. I think you're better off using a currency transfer specialist with a SEPA "pull" on the European side and an ACH "push" on the U.S. side (or U.S. paper check capability) since the cost for the whole transaction is likely to be much lower that way.

Maybe somebody can find a better deal than ING's 2% rate?


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## Bevdeforges (Nov 16, 2007)

Thanks for that information, BBCWatcher. I had wondered about just how you would use a US account bill pay facility to pay your taxes (since you can't send in a "check" with your tax forms) but if you can send it separately via Bill Pay, that should do nicely. 

It's kind of frustrating to find that while I can file and pay my French taxes online with no added charges (well, except for the business account - but that's a separate issue), the IRS seems unable and/or unwilling to set up a direct connection for filing and paying taxes without additional costs. (To be fair, I think one might have problems paying French taxes online without a French bank account - but then again, one wouldn't have a French income tax liability unless one were receiving French sourced income, in which case it makes perfect sense to keep a French bank account.)

Enough grumbling. Thanks for the info on electronic payments.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

Bevdeforges said:


> ...if you can send it separately via Bill Pay, that should do nicely.


I've had no issues. You need to give the IRS the right information to connect the payment with the taxpayer, but as long as you do that (somewhere on the check) it works great.



> ...the IRS seems unable and/or unwilling to set up a direct connection for filing and paying taxes without additional costs.


They have -- that's EFTPS. That works well, too. But the IRS is a U.S. tax authority, so it's not unreasonable that they can only pull from a U.S. financial institution via U.S. ACH.

With respect to France, if you have France-sourced income then you'll probably owe French taxes and have to pay in a form and fashion acceptable to French tax authorities. It's really the same thing.


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## Bevdeforges (Nov 16, 2007)

BBCWatcher said:


> With respect to France, if you have France-sourced income then you'll probably owe French taxes and have to pay in a form and fashion acceptable to French tax authorities. It's really the same thing.


Yeah, but I live in France and so pretty much have to have a French bank account. The whole issue with paying US taxes from overseas seems to be one of those "unintended consequences" of quickly slapped together legislation. Oh well - when I rule the world...
Cheers,
Bev


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## blackduff (Mar 19, 2013)

BBCWatcher said:


> I've had no issues. You need to give the IRS the right information to connect the payment with the taxpayer, but as long as you do that (somewhere on the check) it works great.
> 
> 
> They have -- that's EFTPS. That works well, too. But the IRS is a U.S. tax authority, so it's not unreasonable that they can only pull from a U.S. financial institution via U.S. ACH.
> ...


When I pay my French declaration, it shows all of the money which came from the US. It's not double taxed but it keeps me from getting the Tax d'habitation eliminated. 

Actually making a French tax declaration isn't too tough. But, you have to keep checking things to keep them from changing.

Blackduff


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## BBCWatcher (Dec 28, 2012)

I was alluding to the fact that you could be living in, say, Malaysia and could owe tax in France. Paying your French tax bill from Malaysia would be likely to be _at least as difficult_ as paying the IRS from Malaysia.

Both residence and source of income can trigger tax obligations. You don't have to live in France to owe tax to France.


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## blackduff (Mar 19, 2013)

BBWatcher
I haven't even thought about paying my IRS to an consulate of American site maybe in Toulouse or Marseille. Both are close enough to visit the Consulate and write a check maybe. Hmmm. Good ideas!

Thanks

Blackduff


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## Bevdeforges (Nov 16, 2007)

BBCWatcher said:


> I was alluding to the fact that you could be living in, say, Malaysia and could owe tax in France. Paying your French tax bill from Malaysia would be likely to be _at least as difficult_ as paying the IRS from Malaysia.
> 
> Both residence and source of income can trigger tax obligations. You don't have to live in France to owe tax to France.


We're talking theoretically here, though. France normally only taxes non-residents on French sourced income and generally income paid to foreign residents has some level of taxes withheld. (Kind of like the 30% withholding on income from the US paid to NRAs.)

The issue simply arises more frequently for US citizens living overseas because of the somewhat unique tax system in the US. 
Cheers,
Bev


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## Bevdeforges (Nov 16, 2007)

blackduff said:


> BBWatcher
> I haven't even thought about paying my IRS to an consulate of American site maybe in Toulouse or Marseille. Both are close enough to visit the Consulate and write a check maybe. Hmmm. Good ideas!
> 
> Thanks
> ...


You can ask, but I don't think the US consulates are authorized to accept tax payments. Internal Revenue Service | Embassy of the United States Paris, France Even the IRS office in Paris cannot accept payments or returns.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

If you can write a check _drawn on a U.S. bank_, then simply mail it to the IRS to make your payment. That'll work.


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## blackduff (Mar 19, 2013)

BBCWatcher said:


> If you can write a check _drawn on a U.S. bank_, then simply mail it to the IRS to make your payment. That'll work.


That's what I used to do. I would get the Swiss Bank to issue their check from their American bank and it worked fine. Then the American IRS created this FATCA and the Swiss tossed me out of their banks.

I'm trying to get the French bank to replace what the Swiss did before but so far it's hard to find them willing. 

Life is much more complicated since the FATCA.

Blackduff


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## Bevdeforges (Nov 16, 2007)

Depending on what French bank you're with, it may be difficult to impossible for them to draw you a check on a US bank. Frankly, the credit card option seems to be the best approach - even with the flipping fee.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

No, I'll disagree with you on that one, Bev. There are money transfer specialists that can pay the IRS at much lower cost than any card transaction. Even from France.

Blackduff, do you have a U.S. bank (or possibly brokerage) account, even one with a zero balance? If not, do you have a U.S. correspondent -- a friend, family member, etc. -- with a U.S. mailing address who'd be willing to receive a Bluebird card in the mail?


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