Originally Posted by
Happy
Actually it is in the fine print about bonus is taxable at Fair Market Value. The Fair Market Value Citi used is an established price AA sells the miles at regular price - so that stands up to IRS rules.
In the two promos I received (one for checking, one for savings) the only mention of taxes was the single sentence (in VERY FINE PRINT) that "Customer is responsible for all taxes." There was no mention of ARV or anything about how the miles would be valued. Perhaps the disclosure statement for this promo is different?
Of course majority of folks do not bother to read the fine print let alone think of the consequences when they jump on "deals".
Too true. And, in my case, I relied on what I thought was common banking practice regardng FF miles. My mistake but, hopefully, I've managed to eliminate the problem by closing my savings account and thereby not getting the additional 20K miles. Citi reps have told me (lol) that they do not issue a 1099-MISC if the total award value is less than $600. The 20K miles I will get from my checking account will be valued at $500 and, so I am told, no 1099-MISC.
Bonuses associated to BANKING PRODUCTS, meaning Checking, Saving, Money Market etc, are subject to tax. And of course the tax owed depends on the recipient's tax bracket.
Yep.