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[Consolidated] 1099s for miles & cash rewards from all banks

[Consolidated] 1099s for miles & cash rewards from all banks

Old Jan 21, 12, 12:33 pm
  #121  
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Originally Posted by gq_dq View Post
Follow up on post #93. I was kinda correct about 25,000 miles but it actually was a $600 minimum which I read in a letter Citi had sent me - I dug it up - here is the relevant excerpt...

"In response to your inquiry, the fair market value of 23,500 AAdvantage miles is $587.50. Citibank is required by federal tax law to send to customers and file with IRS Form 1099-MISC when the individual receives miscellaneous income of $600.00 or greater in a tax year. Under IRS rules, the payment of miles associated with this particular promotion is considered to be miscellaneous income and reportable on Form 1099-MISC."

This is an important clarification - Does this mean that awards below 24,000 miles (valued at $600) will not attract a 1099? This seems to conflict with those who have posted above that they received 1099s for an award of 10,000 miles (Post #77 - only valued at $250), and 20,000 miles (Post #92). Could this be because in addition to the 10,000/20,000 miles, these individuals received at least 14,000/4,000 miles from other accounts or from other Citibank promotions?

Or is the $600 minimum not really enforced and does Citi send out even for smaller amounts?
There is a different minimum for 1099-INT and 1099-MISC. Many of the earlier posts involved savings accounts that resulted in 1099-INTs.
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Old Jan 21, 12, 12:43 pm
  #122  
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Originally Posted by swat16 View Post
Philemer, I got a $625 1099 from Citibank for receiving 25,000 miles for opening a checking account. Read the other thread. It is happening to everyone.
Crud. That really sucks. Didn't know that.
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Old Jan 21, 12, 1:12 pm
  #123  
 
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Originally Posted by N_Phoenix View Post
Just got a $1000 1099 from Citi. Ignored the warnings, shame on me.
Same here on the first part, second part was my fault, I didn't see the warnings or I wasn't looking for any (ignorance is bliss, until you get a 1099-MISC).

Called up and got the song and dance that it is required of them and nothing they can do to change it.

I do see some posts from last year showing that they got amended 1099-MISCs down to $0, but I don't see any from this year. Wonder if Citibank has informed it's employees/supervisors to not allow that to happen this year?

I've been reading these threads and saw this link pop up: http://boardingarea.com/blogs/viewfr...le-to-the-irs/ Has anyone had any luck from the IRS's side in getting a 1099-MISC amended through Citibank or was it only from speaking with Citibank?
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Old Jan 21, 12, 1:14 pm
  #124  
 
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What I'd really like to find out from Citi is exactly WHICH miles/points this 1099 is for. Has anyone cracked that nut?

I've got tons of different credit cards (maybe 8) and accounts (probably 5) that could have been the source of this, and I'd like to know, so I won't repeat those this year.
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Old Jan 21, 12, 2:33 pm
  #125  
 
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Originally Posted by josephstern View Post
What I'd really like to find out from Citi is exactly WHICH miles/points this 1099 is for. Has anyone cracked that nut?

I've got tons of different credit cards (maybe 8) and accounts (probably 5) that could have been the source of this, and I'd like to know, so I won't repeat those this year.
This is from my checking/savings accounts I opened last year with Citibank not for the Citi AA cards I opened (*whew* I would be REALLY [email protected]!#ed lol).
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Old Jan 21, 12, 6:04 pm
  #126  
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I don't see why a mileage bonus for opening a checking account should be considered miscellaneous income while a similar bonus for opening a credit card should not. Seems to me that neither should be income to the recipient.

On the other hand, the BankDirect monthly mileage bonus for Mileage Checking sure looks like taxable interest to me. It is something of value paid in return for depositing money with a bank, and the amount of miles is a direct function of how much you have on deposit. That's interest in my book.

It's important to remember that 1099s (received or not received) do not determine your taxable income. They are rather an important compliance mechanism for the IRS. A significant difference between what the IRS sees in your 1099s and your tax return will likely trigger an automated request for explanation. Still, it's the tax laws and regulations that determine your tax liability, not necessary what is or is not on your 1099s.
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Old Jan 21, 12, 6:08 pm
  #127  
 
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Originally Posted by dhuey View Post
I don't see why a mileage bonus for opening a checking account should be considered miscellaneous income while a similar bonus for opening a credit card should not. Seems to me that neither should be income to the recipient.
Neither do I, but thankfully Citi only reports the checking account ones, and that's only been in the last two years, AFAIK.

Let's hope the CC division doesn't try this same road.
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Old Jan 21, 12, 6:18 pm
  #128  
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Originally Posted by josephstern View Post
Neither do I, but thankfully Citi only reports the checking account ones, and that's only been in the last two years, AFAIK.

Let's hope the CC division doesn't try this same road.
Yes, perhaps this reflects differences between the cc and retail banking divisions, the latter being more tightly-regulated. The banking compliance department might feel more pressure to err on the side of issuing 1099s.

Anyone remember the old days when banks would give you household items like a nice toaster when you opened an account? I suspect they didn't include the value of the bonus item in 1099s, but I don't have any personal experience with it.

Last edited by dhuey; Jan 21, 12 at 7:16 pm Reason: grammar
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Old Jan 21, 12, 7:42 pm
  #129  
 
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View From the Wing has an article on "How to Dispute the Value of Miles or Prizes Reported as Taxable to the IRS."

http://boardingarea.com/blogs/viewfr...le-to-the-irs/
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Old Jan 21, 12, 8:48 pm
  #130  
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Originally Posted by dhuey View Post
Anyone remember the old days when banks would give you household items like a nice toaster when you opened an account? I suspect they didn't include the value of the bonus item in 1099s
I don't know what banks did in the old days, but if a bank gives you a toaster for opening an account these days, they will issue a 1099 if you're over the $10 or $600 threshold. And they will likely value it at something unreasonably high. :-) Not so if you get a toaster for opening a credit card. The two industries are (as you note) regulated very differently.

Last edited by ss; Jan 21, 12 at 9:19 pm
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Old Jan 21, 12, 9:18 pm
  #131  
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Originally Posted by Andy2 View Post
Last year (2010 tax year) Citi did amend the 1099 to reflect $0, but I think I was fortunate to have found the right customer service representative, and I was very persistent.
As you stated last year you were issued a 1099-MISC for $750, but you only received a $500 bonus (as over-valued by Citi). At $500 they should never have issued the 1099 in the first place. It's theoretically possible that someone at Citi agreed with your argument that your bonus should be valued at $0, even though there has been no report on FT of anyone else ever winning that argument. But it's far more plausible to presume that Citi was in effect retracting the erroneously issued 1099 by amending the value to $0.

Your situation was quite unusual, and not relevant to people who receive 1099s that show the value that Citi intended.
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Old Jan 21, 12, 10:52 pm
  #132  
 
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Just to add another data point:

- received 1099-MISC today for 40Kmiles --> valued at $1000
- called Citi, escalated to the supervisor, no use.. He even had severe problems getting to explain the $1000 since he was doing the wrong calculation of 0.025 cents per mile. His 3rd grade teacher will be screaming from her grave

The account has already been closed, I have no further business with Citi. I wish I could return the 40Kmiles and get taxable $1000... but of course this can never happen.

From the numerous threads its sound like I need to swallow it but I'm now afraid that I'll get another 1099 from Fidelity for the 50K Delta miles...
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Old Jan 22, 12, 7:36 am
  #133  
 
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Originally Posted by Andy2 View Post
There is a different minimum for 1099-INT and 1099-MISC. Many of the earlier posts involved savings accounts that resulted in 1099-INTs.
So let me understand - While Citi's letter states they will not send 1099-MISC for the 23,500 checking miles, will they however send a 1099-INT for less than $600?

Or is 1099-INT only for real "hard" cash earned as interest and therefore not applicable to the 23,500 checking miles?
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Old Jan 22, 12, 8:16 am
  #134  
 
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Originally Posted by josephstern View Post
What I'd really like to find out from Citi is exactly WHICH miles/points this 1099 is for. Has anyone cracked that nut?

I've got tons of different credit cards (maybe 8) and accounts (probably 5) that could have been the source of this, and I'd like to know, so I won't repeat those this year.
I opened one new Citi card in 2011, in addition to add to the MANY other ones opened in previous years, but have never opened a Citi checking account.

I haven't received a 1099 this year or in previous years from Citi, so by my data point, 1099's are only issued for opening checking accounts, not credit cards.
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Old Jan 22, 12, 8:37 am
  #135  
 
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[QUOTE=marcel;17861553]Just to add another data point:
I wish I could return the 40Kmiles and get taxable $1000...

If you itemize, could the miles be donated for a $1000 deduction? It just wouldn't be in the same tax year.

I received a 1099-INT from Chase for a checking account bonus of $125. It is legitimate though I wasn't expecting it and was surprised.

I haven't yet received anything relating to miles bonuses on credit cards or miles bonuses from brokerage houses and those forms don't usually come for another few weeks.

Sylvia
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