I came across an online article in the Toronto Star where they were featuring this company, Plastiq Inc., that allows you to pay your taxes and other utilities with your credit card.
The catch? (Of course, there’s a catch.)
The company normally adds a surcharge of 2.5% of the amount owing as the government always needs to get paid and Plastiq needs to make money. As a Toronto accountant, the surcharge would usually discourage me from using such a service. However, Plastiq has a limited time offer that got my attention.
From now until May 31st, Plastiq is only charging 1% on paying your tax bill on Mastercard (Visa and Amex are not part of this promotion). If you have happen to have a cash back or similar travel card that gives you 1% or more of your purchases as a reward, then you can come out ahead.
For example, if you pay $1,000 to CRA via Plastiq and your Mastercard will be charged $1,010. However, your rewards card would give you $20.20 back. Net amount out of your pocket – $989.80. You would save $10.20 by using Plastiq. Not a bad deal for something that you have to pay anyway.
I only recommend this strategy if you pay off your credit card in full each month, otherwise the interest cost will negate any savings. A better route to go would be to put your payment on your credit card first and then pay your taxes with Plastiq. It’s a win-win situation.
What is really good about this promotion is CRA is allowing personal taxes, corporate taxes, payroll, and HST to be paid in this manner. So this promotion can help you and your business.
Paying taxes is never fun but at least for a limited time, it is slightly less painful.
If you have any questions, it’s best to talk to a Toronto accountant directly. Please contact me so I can help you navigate this promotion effectively.
William Khalilieh is a Chartered Professional Accountant, based in Oakville, Ontario, who provides practical tax and accounting solutions to individuals and their businesses in the Greater Toronto Area. so I can help you navigate this promotion effectively.