Paying the Internal Revenue Service using Gene Grawe Fund Money (UPDATED for 2023 taxes)
Yes, you can pay your business and personal federal taxes with Gene Grawe Fund's Five Back Visa prepaid debit cards.
DISCLAIMER: I'm not a tax expert; never claimed to be. What follows is not tax advice, but simply me rehashing the knowledge I've acquired from eight years of paying my federal personal income taxes over eight different tax years (2016, 2017, 2018, 2019, 2020, 2021, 2022, and 2023) using Gene Grawe Fund Visa prepaid debit cards. Some payments were for amended return taxes with interest and penalities and some were for regular current year taxes. As always, if a taxpayer is not sure about what they're doing taxwise, they should consult with a tax professional.
I wrote this article to help me add another source of funds for my grandchild's Gene Grawe Fund account.
WARNING: DO NOT QUICK FIGURE TAXES, THEN RUN TO THE GENE GRAWE FUND OFFICE AND BUY THOUSANDS OF DOLLARS IN DEBIT CARDS WITHOUT KNOWING WHAT YOUR DOING! That could end up being a costly mistake.
PREPARING: First, if you always want to get a big refund when you file your federal income tax return, then read no further because this article is not really for you. It also has nothing to do with your federal tax witholdings from your paycheck. This article is for those who, for many different reasons, usually have to make additional tax payments each year. However, there is nothing to stop you from reworking your W-4 so that you don't get a refund next year. If you end up owing a thousand or so dollars when you file your taxes, you could pay that with debit cards from the Gene Grawe Fund and earn a little tuition money for your child. Any tax professional will tell you that using the IRS as a savings account is a really bad deal. Plus, if you consistently find that you must pay owed taxes in excess of $1,000 every spring, you could end up paying penalties for not making estimated tax payments. That would quickly wipe out any tuition funds earned through the Gene Grawe Fund.
Every tax year, Gene Grawe Fund taxpayers should go to IRS.gov and study up on paying their federal taxes with Visa debit cards for the tax year in question. The rules change slightly every year and not everyone can pay with debit cards. There are also limits on how many debit card payments can be made per year per tax type. It varies with tax type, but both personal and business taxes are usually limited to two (2) debit card payments per year per payment processor. More often for installments (2 per month) and estimated tax payments. Read more about IRS payment frequency limits here.
If a taxpayer has determined their taxes can be paid this way, then they should prepare their federal taxes however they normally do. When I file online using my favorite tax filing website, I check the box that tells the filing website that a check will be mailed to the IRS. If the taxes are prepared by a tax professional, follow their advice on paying the tax bill online using prepaid Visa debit cards from the Gene Grawe Fund . If paper forms will be mailed to the IRS, tax payments can still be made online using Gene Grawe Fund Visa debit cards. Just include copies of the online payment receipts in with the mailed tax return.
PAYMENT PROCESSORS: There are currently three payment processors sanctioned by the IRS: ACI Payments, Pay USA Tax, and Pay 1040. They each charge a slightly different flat fee ($2.20, $2.14, and $2.50 for the 2023it's tax year) for a debit card transaction. They are all very reasonable, but taxpayers will have to decide which one(s) suit their needs. None of the three require an account be created in order to make payments.
GGF $500 DEBIT CARDS: Right now, the Gene Grawe Fund is limited to being able to offer $500 maximum denomination Visa prepaid debit cards. Maybe someday their vendor will begin offering larger denomination debit cards. But, despite that limitation causing multiple transactions and incurring multiple processing fees, it still is profitable for students registered with the Gene Grawe Fund. Only small payments under $100 are unprofitable for a student account. Also, for my annual tax payments, I exclusively use REGISTERED Visa debit cards, so I do not know what the results would be for unregistered Visa debit cards. Finally, I always make sure to capture and save the payment confirmations for each of my payments.
THE TRANSACTIONS: When deciding on the size of each payment to make to the IRS, always leave room for the card processor's fee. You can't make a $500 payment to the IRS with a $500 Visa because the processor's fee will be added on making the transaction $502, which will fail. Instead, if the transaction fee is $2, make a $498 payment to the IRS and the $2 fee is tacked on by the processor making the total transaction $500.00, which will succeed and will successfully empty the card.
On my 2021 taxes, I still owed $1,408 after I filed my online return. So I bought and registered three $500 Visa debit cards from the Gene Grawe Fund office. Then, I used all three payment processors to make three separate payments. I used ACI Payments to make a $498.00 payment with a $2.00 fee which emptied a $500 Visa. Next, I used Pay USA Tax to make a $497.45 payment with a $2.55 fee which emptied another $500 Visa. Finally, I used Pay1040.com to make a $408.00 payment with a $2.58 fee with the third Visa. So this year I paid $1,408 in taxes with Gene Grawe Fund Visa debit cards and incurred $7.13 in transaction fees for a total of $1,415.13 of Gene Grawe Fund money spent. At a minimum, that $1,415.13 spent through the Gene Grawe Fund will earn $28.30 (2%) in tuition rewards off my granddaughter's tuition. Minus the $7.13 in fees I'm still $21.17 in the black.
Despite the advertised annual two payment limit to the IRS, you can make six GGF debit card payments using all three payment processors. Each one limits you to two payments and you would pay a maximum of $14.26 in payment processor fees. Which means you can pay up to $2,985.74 in taxes using six $500 prepaid Visa debit cards.
IS IT WORTH THE TROUBLE?: Here's why I believe it's worth it. A taxpayer can make up to six payments (2 payments per payment processor) to the IRS totalling a maximum of $2,985.74 in personal 1040 series income taxes. Any taxes owed above that amount can be paid online using standard bank account debits like we've all done for years.
For a maximum earnings example, subtract the $14.26 in fees for six transactions (2 per processor) from the $60 rebate a child would earn from the Gene Grawe Fund at the minimum 2% award level (2% of the $3,000 for six $500 debit cards purchased) would still be $45.74 to the good. And finally, those extra debit card purchases could push a child's account over any one of the three bonus thresholds ($5k, $10k, and $20k) causing the child's account to possibly receive hundreds more in bonus dollars. There's no way to know how that will turn out. You just keep looking for opportunities to pay anything, however small, with Gene Grawe Fund gift cards. For me it seems worth it and I believe it isn't much different than earning other nickels and dimes for the children of the Gene Grawe Fund by buying gas, groceries, and clothes on other gift cards and debit cards.
WHAT OTHER FEDERAL TAXES CAN BE PAID THIS WAY?: According to the IRS website, taxpayers can pay more than just Current Tax Year, Personal Income Taxes with prepaid debit cards purchased from the Gene Grawe Fund. They can also pay all manner of other personal federal taxes such as Estimated Taxes, Installment Agreement Tax Payments, Amended Return Taxes, Prior Year Taxes, Extension Payments, and so on. Each has their own frequency limit on the number of payments. Some allow up to two payments per month. Also, business taxes (i.e. 900 series, 1041, 1065, and 2290) can be paid using prepaid debit cards from the Gene Grawe Fund.
All taxpayers are encouraged to visit the two IRS links mentioned earlier in this article to see if it's an appropriate way for them to pay income and/or business taxes using GGF prepaid Visa debit cards.
FINDING A TAX PROFESSIONAL: Finally, it is always recommended for taxpayers to consult a tax professional. Tax professionals that give back to the Gene Grawe Fund can be found on the Gene Grawe Fund website's Local Merchant List.