HEADS UP: Citibank reporting "free" airline miles to IRS as income for opening checking / savings accounts!

huh? you are supposed to be paying it in the first place, so not a big deal, unless you don't pay your taxes correctly, i guess.

Quote from Chesskid1 : huh? you are supposed to be paying it in the first place, so not a big deal, unless you don't pay your taxes correctly, i guess.

it's airline miles. it's one of the few things that the IRS "ignores"

Quote from Chesskid1 : huh? you are supposed to be paying it in the first place, so not a big deal, unless you don't pay your taxes correctly, i guess.

The point is that it seems like Citybank did NOT dislose to new customers takinmg this del that they are liable for 2.5 cents per mile to IRS.

http://www.allgov.com/ViewNews/Ci...les_120218

There is a lawsuit on this...

The implications are both that people might be liable but have not realized it AND even if they are OK with that - the might not have planned it when filing taxes originally (if they are early filers) and then have to file an addendum.

This is old news. Citibank is the only one doing it and only doing it for checking/savings, not credit cards. So far.

Yea lets tax the taxpayer even more, and ignore the real problems, like congress spending too much, entitlements, illegal aliens etc etc ...

Quote from m124 : This is old news. Citibank is the only one doing it and only doing it for checking/savings, not credit cards. So far.

I am sorry to say that my neighbor (a lawyer) received the form on a credit card! The IRS is no longer ignoring it -

Quote from carabuser : Yea lets tax the taxpayer even more, and ignore the real problems, like congress spending too much, entitlements, illegal aliens etc etc ...

This isnt about government spending. You should be reporting this yourself even if you didn't get a form in the mail.

I have a website that pays out approx 300/year in google ad revenue. I haven't touched the site in years but its still making money. Even though google doesn't send me a form since its not that much money I still report it as income.

I just dont see how the creditcard companies can assign an arbritrary value to airmiles. For one thing not all airline miles are valued the same from one airline to another or even one creditcard to another.

More logical would be to value the miles at the same rate they use for giftcards but i dont think Citi would like that.
50,000 American Airline miles with get me $500 in Bed bath and Beyond if i choose the $100 cards if i want $50 cards of different vendors ill get alot worse exchange rate.

Quote from carabuser : Yea lets tax the taxpayer even more, and ignore the real problems, like congress spending too much, entitlements, illegal aliens etc etc ...

Dey terker jerbs!

Quote from fyu : it's airline miles. it's one of the few things that the IRS "ignores"

It's not about ignoring or not... IRS clearly defines miles from a checking/savings as "interest" (reportable) and from a CC as a reward/rebate (not reportable). The only concern with miles related to a credit card is that it would reduce the cost basis for a deductible expense (business expense for example).

Quote from dondeal80 : I am sorry to say that my neighbor (a lawyer) received the form on a credit card! The IRS is no longer ignoring it -

Which credit card?

I had no idea this things would actually be considered to put in the income tax forms everything seems taxable which sucks.

Quote from carabuser : Yea lets tax the taxpayer even more, and ignore the real problems, like congress spending too much, entitlements, illegal aliens etc etc ...

Quote from nizzy1115 : This isnt about government spending. You should be reporting this yourself even if you didn't get a form in the mail. I have a website that pays out approx 300/year in google ad revenue. I haven't touched the site in years but its still making money. Even though google doesn't send me a form since its not that much money I still report it as income.

I think what he is trying to say is tax us the working class more and making us pay tax (as well as wanting to increase tax) as well as congress keeps over spending more and more on some useless things (no need to point them out its obvious).

Quote from gpister : I had no idea this things would actually be considered to put in the income tax forms everything seems taxable which sucks.

True, all of your income is supposed to be reported to the IRS, even from your lemonade stand/garage sale.

In practice, people only report income that gets reported by the IRS to other entities (i.e. you/they get a 1099 form).

So, if you get a 1099 from the bank, you should report it on your taxes(of course). Otherwise, don't bother; they will (probably) never know.