Originally Posted by
nmenaker
OK, THAT is a first that I have ever seen… in a 1099 some calculation for MILES earned. What does that mean for sign-up bonuses going forward? An AMEX 100K Plat sign up bonus would trigger $1000 in 1099? That would be quite the blow.
As for overall 1099, yes, pretty much anything over $600 (today, this might change) for money TO THE RECIPIENT. Doesn’t matter if it was direct, indirect, referral, whatever. It was $$ to YOU. That needs to be reported and DO NOT NEGLECT to account for all of it.
Anyone doing ANY of this type of free money, I would suggest to make sure that you have an IRS online account and REFER to the INCOME AND RECEIPTS report that you can get on your account and make sure that anything THERE is ON YOUR TAXES. I had $7.18 in unreported interest from an online bank, that had closed and actually I Never received any of that money, but it cost for $228 in penalties and interest and required withholding on interest accounts for half a decade.
So far, sign up bonuses haven't been taxed, yet - due to some IRS rulings years ago. Also anything required you to perform some tasks to earn, are not considered passive income such as interest and the referral bonus. At least is not considered as taxable income for now.
Interest over $10 is required to report. Below $10 the bank reported made an error. You can sort this out with IRS when they told you about the non-accounted for interest and the subsequent penalty. You said it was half a decade ago - that sounded quite odd. Because in the interim, IRS would have sent you a bill long long ago on the fairly large penalty on an unreported $7.28 before the half a decade time has passed. That just does not sound right.
However I do agree with you to check the IRS online account to make sure no reporting error, or catch errors in time.