After an edit. The first version said “six months”.
I don’t know how I missed this. You made an FAQ on yourself about a card that has been mentioned twice already.
Gosh. I also don’t know how you missed it. 
Obviously, your two jobs are too much.
Hand and blow?
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Was approved for the Freedom card with the 5% reward. Application and approval processes were not too challenging. Credit line they granted was VERY high.
This is the third credit union card I have done recently. Would be more excited except the other two, so far, have not been helpful at all with “unconventional” spending. And when unconventional spending is taken off the table I really cannot make a lot of money with credit cards. I mean, yeah sure, I will make small dough at 5%. It is a good reward. But I do not spend enough money conventionally for it to amount to much.
So will the Freedom card be different? Will I be able to do some unconventional spending with it? I dunno.
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Does anyone having knowledge of how much you can overpay Federal taxes with a credit card without problems with the IRS or credit card company. I have received refunds of about $5,000, but I could imagine even large refunds.
The cheapest processing fee is 1.87% (Pay1040) and 3% back is on my Alliant credit card, and 2.65% on BOA cards (platinum status). There are also several cards with 0% interest for the first year, and combined with the rewards percentage this could be a useful source of financing.
In theory refunds come fairly quickly, but could imagine the IRS being worried about fraud and delaying a large refund. I am not aware of any regulations which forbids over paying taxes on purpose, but there may be one somewhere.
I had this discussion with a nice lady at the IRS perhaps between one and two years ago. Overpayment is “no problemo” and it is not against the law. However, I have never overpaid much outside your own experience. So I do not know what an upper limit might be in order to avoid AA (adverse action). And if ever there were an entity from which incoming AA would be unwelcome, it is the IRS!
One additional thought occurs. I suspect they will tolerate more overpayment if your return is larger. A 20 grand overpay on an $800k return might be no bigee to the IRS. On a $90k return it could be another story entirely.
My own personal limit … I don’t overpay by more than what my total tax bill is ( if I didn’t withhold anything during the year ). So I have done low to mid 5 figures back in the AARP days.
Like a lot of the stuff we do, you can do as much as you want - until you’ve suddenly done too much. They could delay/hold your refund, pending verification. And it could trigger an audit, on the premise that higher income may have prompted your higher payment, which you then decided not to declare. As long as you are playing things straight, neither possibility should be to concerning.
I guess I’d suggest not overpaying by more than your total reported income, but even that’s just an arbitrary threshold. No matter how much or little you overpay, you just need to go for it and hope for the best. There will always be extreme examples, but for the most part the down side is pretty benign, and will be little more than a hassle to straighten out.
There is a procedure for review of large refunds that could potentially take a long time. I’m not actually sure if this applies to individuals, and not sure if it applies to straight overpayments, but refunds to corporations sometimes have to be reviewed by the Joint Committee on Taxation. However, the threshold is in the millions, so I’d imagine this isn’t the level you were talking about. That said, there may also be other IRS internal thresholds for review.
The Freedom card looks very attractive. Apparently you can not apply online until you are a member (or will qualify by residence or employer). After calling I was told I could join American Consumer’s Council to do this, not living in the Philadelphia area.Then something has to be faxed, and then you can apply for a card.
closest thing to a 5 % back card (excluding Freedom and Discover rotating cats) is the Discover Miles that gives 3% on everything (but you need to wait for 1 year to get the 1.5 % matched). But this offer is only for 12 months. But I have a big family… The Alliant credit Union is 3% for the first 12 months, then drops to 2.5 on everything after 1st year. For the lucky ones who possess the Amex Old Blue Cash… still 5% in groceries/drugstores and gas.
but your 3 month window had already started. the card will probably arrive in 10 days and you lose out on 3 weeks already…plus the hard pull.
Keep in mind the potential that someone else will file your return and get your refund. This type of identity theft is rampant, and it happened to me two years ago. In my case, it only took about six weeks to sort out, but many tell tales of it taking 18 months or more.
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Agreed. The “three month” thing is sort of a come on. I will scarcely have time to determine if the card actually even works for the kind of spending I would like to put on it. That said:
5% is a decent reward and it is a higher reward than I have available on any other card. My next closest is just 3% on Discover, and I get that only provided I’m able to hang onto the card until next July. So it’s up to me to put the 5% to use during the short interval it will be available to me. That interval does coincide with Christmas, which is nice. I also can load up on gift cards for groceries and gasoline, and I will make my January quarterly tax payments with the card. Also there will be opportunity to pre-pay a bunch of stuff. In addition:
The line of credit Freedom offered me was higher than the (rather lofty) line I requested. Having that much credit on my record will help me lower my utilization, which is a worthwhile thing. I get this benefit even without using the card at all.
So bottom line, I remain comfortable with my decision to have applied for the Freedom card, warts and all.
I did just over $9k over-payment last year. Doesn’t seem at all worth it for the 1% arbitrage you mention. But for larger bonuses for opening spend or milestones, especially with Amex. I had an existing (not new application) amex that gave me two Hilton weekend nights for putting $15k on it (plus AF worth of retention points). 0.7% net fee on $15k = $105 for two weekend night certs.
My actual final taxes was ~$13k. I paid early april, didn’t end up filing until Oct 14. ACH received 2nd of Nov.
This my be important after the three month period is up. This will then lower your utilization. Many here (myself included) have all the credit the major banks are comfortable giving them. Having lines from small credit unions, regional banks etc. will increase your available credit and hence lower your utilization even after the card is paid off, and is possibly little used as having a low reward rate. .
Freedom CU sent me a letter asking for a copy of my membership certificate in the ACC and my driver’s license, and enclosed a prepaid envelope. I interpret their prepaid envelope as indicating they expect to issue the card, but it certainly slows things down, especially if you had not already joined ACC ($8.00) or qualified for membership in some other way.
Good luck and I hope things work out well for you.
My own card finally arrived today after the normal wait. I am charging everything I’m able to it and will pre-pay a good bit before the end of January.
Have been told statements close on the last day of the month, with payment due by the twenty-eighth. There is no provision for adjusting downward your CA limit. However, the special they have ongoing might make that unnecessary. My own CA experience is nil and I’m going to have to learn the ropes to take advantage here . . . if there is profit to be had. Really do not know at this point.
Anyway, the card is working so far just fine and I’m hoping for good things between now and January’s end. It’s a wonderful time of year . . . . . . . . to have a 5% card, I mean!
ETA
Course with interest rates ascending it becomes concerning to pay too far in advance. This because you lose interest on the money you must pay out early. However, the 5% reward on this card is I assume a tax-free reward whereas the interest you would earn is taxable. Hence:
Advantage goes to the Freedom card at 5%