Moana Surfrider Hotel, Oahu, Hawaii

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It’s that time of year again, when households across the land are excited to fill out their tax forms. Yeah for Tax Day!

Goal #1 is of course to minimize tax burden using the numerous options available. Be sure to contribute to those deductible IRAs and 401ks!

Some households will have a zero or even negative tax burden, but most will have a tax obligation for the year. This is usually paid at least in part through paycheck withholding or estimated tax payments.

This is also the case for us since we pay Self-Employment tax on blog income. (But… plans are in motion to reduce/eliminate this.)

And I don’t know about you, but if I have to pay some taxes…. I at least better get a ridiculously cheap trip to Hawaii out of the deal.

A Free Trip to Hawaii

Have you been to Hawaii? It’s nice. We had our second honeymoon in Oahu many moons ago, with free flights and free hotel. Breakfast on the ocean view terrace was also included. (Our first honeymoon was also fun. And free.)

We took the bus to Hanauma Bay to snorkel (and swam with a sea turtle!), enjoyed the pool and beach, and ate a ton of Japanese food and seafood. We even managed to have brunch with one of my favorite early retirement experts, Nords.

Moana Surfrider Hotel Pool

There are certainly worse places to spend a holiday. I am definitely ready to spend some time on the beach after a few months in a big city (We are currently in Taipei.)

Rewards Points

Back in those days I was traveling often for work. This became increasingly less enjoyable, but it did provide for a healthy number of airline and hotel points. Alas, those points are all gone…

Nowadays we accumulate airline and hotel points the old fashioned way, through credit card signup bonuses and strategic use of credit cards. At present, we are sitting on a nice pile of Ultimate Rewards Points ($3,414.39 worth, to be precise.)

The vast majority of these points were earned from signup bonuses, obtained using Estimated Tax payments in order to meet the Minimum Spending requirements.

The remainder is just from using credit cards where they earn the most. On each Uber ride we get 3 UR points and 1 SPG point per $1 spent, for example. Plus I never have to find parking.

Paying Taxes on Credit Cards

It probably goes without saying, but if money is tight and it seems the only option to pay the IRS is with a credit card… then that is a terrible option. It would be better to work with the IRS on a payment plan and/or tax relief.

But when the choice is between pay taxes with cash and not go to Hawaii, or pay with a new credit card or two and get some beach time… well, then there is really no choice at all.

The IRS currently has 3 payment providers that can process credit card payments. I have only used Pay1040 because they are the cheapest (1.87%.)

It is possible to make 2 payments with credit cards per year, but in theory this means two per year per payment processor (x3.) Or five times that if you also make estimated quarterly payments. There is no shortage of opportunity.

An example

During tax season last year I applied for the American Express Starwood Preferred Guest card, which paid 35,000 SPG points after $3,000 spend in the first 3 months (now 25,000 SPG points, I believe.) I met that requirement in one tax payment.

If I were more interested in precision I could have charged $2,944.94. With the 1.87% service fee the total bill would then be $3,000.01. In any case, $56.10 seemed like a reasonable price to pay for 5 hotel nights.

Even better, since I’m paying business taxes the service fee is a tax deduction. This effectively reduces my real cost to 1.32% or $39.75.

For W2 employees, tax related expenses are only deductible if you Itemize (Schedule A) and total expenses exceed 2% of AGI. We’re only talking a difference of $16.35 here, but it is a nice perk for anybody with a profitable blog or other side hustle.

Step-by-step guide to free trips from tax payments

1. Estimate total tax burden (TurboTax Taxcaster is a good free tool.)

2. Ensure tax payments are required in April. Reduce W4 withholding to minimum required (equal to last years’ tax burden, unless significant life change.) TurboTax has a free W4 calculator.

(If anybody is uncomfortable with adjusting W4 and total withholding, you can just pay extra on a credit card to get the bonus and then get a bigger refund.)

3. Plan a destination and apply for credit cards that get you there.
Example: A married couple could get to Hawaii from the West Coast starting with just two Alaska Airlines cards (1 each) and two IHG cards (1 each.) Total minimum spend $4k.

4. Use an IRS authorized payment provider to process tax payment. Attached screenshot shows setup.

Tax payment on

5. Say hello to the sea turtles

☆ Because of the credit card processing fee, we don’t get a “free” trip… rather we get a ridiculously cheap one. If only “ridiculously cheap” would fit in the header.


Ensuring you owe at tax time provides the option of paying the final tax bill with a credit card. Combined with a new credit card or two and a generous signup bonus, instead of just paying our taxes… we can get a bonus trip to the beach. Aloha Uncle Sam!

The examples discussed above are specifically for Federal Tax payments, but this strategy works equally well with State Tax and Property Tax payments. Check payment options with your State and local governments.

There are still a few months remaining before Tax Day, plenty of time to plan a holiday.

Some ideas for good cards to get started:

card_nameGreat travel card!
card_name -
This is a great card for travelers!
card_namecard_name -
2X miles on every purchase.
Learn more here.
bonus_miles_full. *Rates and Fees.
Numerous credits - Up to $200 in Uber Cash. $200 hotel credit with two-night minimum stay. $240 media credit. All as statement credits. (enrollment required)
annual_fees. Terms Apply.
Small Business card.
bonus_miles_full. Worth $1,250+.
3x points on travel (on the first $150,000 spent in combined purchases)

If you do decide to load up on Rewards points this tax season, this blog earns a commission if you apply for credit cards through our affiliate links. It is certainly appreciated if you do, but definitely not expected. Happy Tax Day! And happy travels.

Related: See how we saved $10,000 on our 4 month tour of Western Europe.

Have you had a ridiculously cheap vacation thanks to Uncle Sam?