You’ve been earning rewards for signing up for a credit card or using it to earn airline miles.
Are those miles now considered taxable income?
You would think not, but some Citibank customers received a 1099-MISC for airline miles they were awarded for signing up for an account in 2011. These customers are understandably upset as there was no clear documentation as to the impact of accepting the extra miles.
The Internal Revenue Service hasn’t been clear on how they treat airline miles, either.
Some reports say taxpayers who fail to include the reported 1099-MISC income will not be pursued by the IRS, but do you really want to chance an audit over 20,000 airline miles?