Airline Miles and Income Taxes (Repost)

This question comes to me from readers every year. Are Airlines miles taxable (in the US)? Especially if you redeemed them (you claimed their value). Or if you earned them while traveling for company business (tickets paid for my the company – are the miles taxable as income). The answer to all these, to the best of my knowledge is, no they are not taxable. For specific scenarios, I always suggest you check with an accountant, especially if you got a 1099 from a bank for Airline Miles earned. For more details, read my earlier post on this topic of Taxes and Airline Miles. As per the future, who knows, the US government is trying to tax everything!

From April 2010: Airline Miles and your Income Taxes

See also: Are Banks sending 1099s for Airline Miles?

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  1. I think the logical answer would be no for the simple reason that you’re making a “purchase” and paying taxes when you redeem, if the gov taxed you again, it would be double dipping.

  2. If an award ticket is used for business trip, can it be deducted on income tax ?

  3. @milesnmore, I have heard of people do this. I am not aware of its acceptance by the IRS. You should consult your accountant to figure out if it is a legitimate deduction allowed by the IRS and how to value it.

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