Getting a 1099 for Airline miles has been beaten to death across all Airline Blogs and forums and several news outlets, earlier this year, including this blog. Newsweek’s Christopher Elliott just woke up from his deep slumber yesterday to stumble upon this topic on a what must be a slow news day. Not only is he writing so very late, he got it all wrong and is giving totally wrong advise based on his clueless interpretation of the facts.
Flaw #1: Anyone who read the blogs and news articles when this was a hot topic (our post was on Jan. 29th.) knows that 1099s are only being issued on miles awarded for opening bank accounts. Credit card driven miles, the way bulk of the miles are earned, are not resulting in a 1099. Miles from actually flying (yes we still do that) don’t earn a 1099 either.
Flaw #2: The whole article seems to dwell on the valuation selected by Citibank to price out the taxable value of the miles. Again reading the blogs and forums would tell Mr. Elliott that several good accountants have suggested ways change the value you pay taxes on to ‘fair market value’. I am not an accountant, so I will leave it at that. This is not the most important factor here. The very fact that Citi issued a 1099 is. The fact that it is only for bank accounts is. Bank accounts result in a 1099 if they earn any interest anyways.
Flaw #3: Give Miles a Wide Berth – states the articles’ baiting headline. Really! Give up on thousands of dollars worth of free award travel or upgrades because one bank issued a 1099? Really?
Mr. Elliott, travel often?
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