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Tax season—a time of stress for many—is upon us. Not only does the process of filing tax returns present a challenge, but also the fear of an unexpected tax bill can be a source of anxiety for taxpayers. Even if you don't end up owing the IRS, you still may have to pay to get your taxes done. So, finding ways to save along the way can ease the burden of filing your taxes.
Ways to Save When Preparing Your Taxes
While the list below is certainly not exhaustive, many opportunities exist to save when preparing and filing a tax return:
- Airline/cashback portals
- Bank savings programs like Amex Offers and Chase Offers
- Referral systems
- Free filing
- Paying with the right credit card
These opportunities are not mutually exclusive either. You can stack two or more of these opportunities to save even more when you file your tax return!
Airline and Cashback Portals
Online shopping portals have been around for a while, but might not immediately come to mind during tax season. Most U.S.-based airlines and a multitude of other cashback shopping systems offer a way to earn rewards for your spending. Common tax preparation services and software, such as H&R Block and TurboTax, are no exceptions to this.
Whenever I am poised to use an online shopping portal, I make sure to check CashBackMonitor to compare which portal offers the most favorable return on spend. At the time of writing this article, a search for “TurboTax” yields the results below:
A few options immediately stand out:
- Southwest Rapid Rewards offers the largest airline points bonus (1,000). However, per the offer terms and conditions, these points do not count towards Companion Pass qualification.
- Rakuten offers a way to earn up to 15% back. If your Rakuten account is set up to earn Amex Membership Rewards instead of cash back, that 15% means 15x Membership Rewards points instead!
- Several other 15% cashback opportunities exist if neither airline portals nor Rakuten is appealing.
Offerings from each online shopping portal change frequently, so be sure to check back routinely to take advantage of what could be limited-time increased airline mile or cashback chances!
Tax Preparation Amex Offers and Chase Offers
Holders of Amex and Chase credit cards should be quite familiar with Amex Offers and Chase Offers, respectively. Currently, both sets of cardholders enjoy opportunities to save when they pay for tax preparation services and/or software this tax season.
I was able to find a couple of Amex Offers and one Chase Offer for myself at the moment. However, you may find different offers depending on what cards you hold and when you search:
Be sure to read all of the terms and conditions of these offers carefully to make sure that all qualifications of the offer are met. Just as importantly, pay attention to the offer period for each of these as well.
Get Rewarded for Referrals
Referral offers for credit cards, cashback programs, and even bank accounts are the norm these days. But for tax preparation services? Add that to the list in 2021.
Both TurboTax and H&R Block — and perhaps other tax companies — offer referral bonuses for users. You'll get a bonus whether you're the one referred or the referee. So, no matter what your business is rewarded!
Have a PayPal account? This isn't a “referral” in the same sense as above, but checking out via PayPal from select tax preparation services from TurboTax may yield additional savings.
Free Tax Filing
All of the offers mentioned so far are for discounts or extra rewards on tax preparation purchases. But, if your goal is to spend as little as possible, filing your tax return for free beats any 15% rebate or $20 back opportunity. The IRS website makes filing for free very easy. Free filing options exist no matter what your level of income.
For those with annual income over $72,000, free electronic forms are available that must then be filled out and filed independently. However, for those with an annual income under $72,000, you'll get free access to tax preparation software made by the same companies that sell tax preparation software — including TurboTax!
Paying via Credit Card
After finalizing your tax return, you may find that you owe additional taxes. Even if you are due a tax refund, you may have a payment to make to a CPA or other tax filing service.
If a tax payment is owed, you can make such a payment via credit card. This allows taxpayers one final opportunity in the filing process to save money. Note that multiple options exist for making a tax payment via credit card.
Besides choosing which method of payment makes the most sense, it is important to consider which credit card to use as well. If there is a credit card where you are working toward meeting a minimum spend requirement, that should take precedent.
Beyond that, tax payments do not fall into a bonus category for any consumer credit cards. Credit cards that offer the most on non-bonus spend will provide taxpayers the best return on their payments. Even for those who prioritize earning transferrable points, excellent payment options exist.
Related: How to Pay Taxes With a Credit Card (and When You Should)
Our Take
Filing taxes can be stressful, but it can also be rewarding. With a bevy of stackable options at your disposal, make sure you don't miss out on savings this tax season. There are even free options for preparing taxes exist for the most cost-conscious taxpayer.
No matter which filing option you pursue, make sure to make any tax filing-related payments with a credit card that will provide the biggest reward for your spending.
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Thankfully, we’ll all have a bit more time to figure out our taxes and to potentially implement some of these savings ideas with the federal filing date being moved back to 5/17.
Preparing my taxes a bit late this year, and didn’t even realize about Chase Offer for TurboTax. Definitely something I will look into.
Thanks for the great tips! I have been using a method to define if I should use my credit card to pay any bill, and it is actually the same method I use to define if it is better to pay with my 1% cashback card or any of the ones that I get points back. Basically I search for what a promo flight will cost in terms of points, then I compare to the same flight paying in cash. This will give me the $ value of my points but up to that specific moment, I then calculate the effective % I get in return, and if better than 1% I can pay with that credit card, otherwise, I pay with my cashback card. You have to consider though that if you’ve got the money in that specific moment and the associated costs to pay with your credit card exceed what you’ll get in cashback or equivalent in points, I’d stay away from doing it.
I’ve found it helpful to download buttons from linked shopping portals to my web browser’s toolbar; this way a little pop-up appears and lets me know when I have an opportunity to collect more points/rewards/whatever the program offers. And because I’ve done this for each portal program I use, I can easily compare pop-ups to determine which will offer me the best deal for the site I’m using.
Two of my favorite points/rewards hacking tools are CashBackMonitor and AwardWallet’s Merchant Lookup tools, which help to determine the best portal(s) and credit card(s) to use when paying taxes.
It’s important to mention that using a credit card to pay taxes incurs a fee so you have to make sure that whatever cashback, rewards, bonuses, etc., outweigh the processing costs.
Yep! We get into all of those aspects in our dedicated post on paying your taxes with a credit card: https://awardwallet.com/blog/pay-taxes-with-credit-card/
Therefore, it is better to pay with a card to realize a sign-up bonus.
Yeah, most people would need to be reaching a signup bonus to be beneficial but there are a few cards that would net a higher bonus than the fee incurred – BoA Premium Rewards being one of them if you’re platinum honors.
Thank you AwardWallet for saving our travels
Good read. Lots of interesting ideas to look into.
Thank you for this valuable information. I plan on starting my taxes this week.
There was a time that I would have been able to take advantage of the free tax preparation but no more. Of course I do pay my taxes with a credit card and use the one that will give me the most return. Always nice to get a little back or what you are paying to the government!