Use American Express points to pay taxes

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- American Express cardmembers can now use rewards points to pay their taxes, the credit card giant said Monday.

AmEx (AXP, Fortune 500) cardholders can use the points toward federal, state and local income tax payments when they use one of two Web sites to file their taxes: Pay1040.com and OfficialPayments.com.

CDs & Money Market
MMA 0.40%
$10K MMA 0.36%
6 month CD 0.39%
1 yr CD 0.70%
5 yr CD 1.50%

Find personalized rates:
 

Rates provided by Bankrate.com.

But to pay off $5,000 in taxes a cardmember would have to charge $1 million.

That's because it takes a whopping 200 points to pay off just $1 in taxes. And, according to an AmEx spokeswoman, cardmembers typically earn about one point for every dollar charged to their credit card.

"In light of the economy, we wanted to give cardmembers a practical use for their rewards points," said spokeswoman Mona Hamouly.

But given the points-to-tax ratio, it's not clear just how helpful this program will be to consumers.

Generally, rewards points are cashed in for airline miles, dining cards or items in a shopping catalog. For instance, according to the company's rewards Web site, an Apple (AAPL, Fortune 500) iPod mini goes for for 33,500 points, while a $100 Bloomingdale's gift card costs 18,000 points.

A company statement claims this is the first points-for-taxes program of its kind. The Internal Revenue Service did not return a request for comment.

AmEx says it chose to work with the Web sites Pay1040.com and OfficialPayments.com because those two merchants were already in their program -- cardmembers can use their points toward the sites' transaction processing fee, Hamouly said.

After registering for an account on one of the tax payment sites, AmEx customers can select the rewards points option from a menu of payment options. To top of page

 
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.07%4.07%
15 yr fixed3.13%3.09%
5/1 ARM3.22%3.08%
30 yr refi4.12%4.12%
15 yr refi3.19%3.16%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,658.77 301.90 1.74%
Nasdaq 4,731.34 87.03 1.87%
S&P 500 2,047.83 34.94 1.74%
Treasuries 2.22 0.07 3.17%
Data as of 1:40pm ET
Company Price Change % Change
Bank of America Corp... 17.44 0.17 1.01%
Apple Inc 111.87 2.46 2.25%
Oracle Corp 44.59 3.43 8.33%
General Electric Co 24.95 0.52 2.13%
AT&T Inc 33.30 0.62 1.91%
Data as of 1:26pm ET

Sections

Sony may have pulled its controversial film 'The Interview', but North Korean citizens may soon have copies dropping from the sky. More

With two recent IPOs and a digitally-inclined audience of entrepreneurs, non-traditional financing could finally get its big break. More

Payday lenders are spending millions of dollars in Washington in an attempt to get powerful politicians on their side as a government crackdown on the industry heats up. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.