Taxation of miles
 

I read recently where there was a tax on my frequent flyer awards but i didn't see anything about it from the government for this years taxes. What should I do because I used two awards this last year.

Several attempts were made in the past to tax rewards as imputed income but they ran into snags because they couldn't place a concrete value on the miles/points. I'm sure that some DC knucklehead will figure it out someday but for now enjoy the gifts.

What an administrative nightmare! I can't imagine that anyone would be able to come up with a system that could accurately track this information and then hold us accountable for the taxation.

Hey Folks, there IS a tax on your benefits. It is imposed on all miles given to you by the car rental, hotel, credit card and other airline partners.

The good news, you don't pay it directly. The bad news is the provider of miles does and you pay the price in increased costs.

The tax was implemented last fall and equates to taxation without representation. I would suggest all who want to keep earning miles and benefits write their representatives and oppose this tax and any future proposed taxes on marketing incentives.

In some cases you DO directly pay it. For about 6 months now, Hertz has imposed a 36 cent surcharge on your rental when you request frequent flyer miles! It's tucked in down at the bottom of the receipt along with the other odds and ends (like the registration recovery fee in California--because car license plates are so costly there).

I'm not a government employee, but I live near Washington DC. Here's why the awards themselves will probably never be taxed directly: for the same reason that Washington National Airport just got a massive new terminal instead of being torn down and retired with its antiquated 7000 foot waterlocked main runway. In both cases, Congressmen like it. DCA is 10 minutes from the Hill, and the airlines and/or the biz jets owned by the special interests take your representative wherever he/she wants to go in a jiffy. And while normal government employees are not supposed to use miles earned while travelling for the government for personal use, guess which 535 people are exempt from that rule! No, they'll never tax the miles directly, because they'd be taxing themselves, and that's a simply not done.

Rumor has it that another tax on frequent flyer benefits is in the works. I agree on the DC crowd not wanting to tax themselves, but when it comes to finding money, airlines are always prime targets for taxation.

Will never happen because:

1. It would be an administrative nightmare to try to enforce; and

2. Credit card issuers and airlines have built a massive industry based on buying and awarding these miles. If miles were taxed, volume of miles earned would drop. They would fight to the death to stop that.

You've resurrected a 12 year old thread. Let it rest in peace.

At my organization we have a stated policy approved by my Board that all miles/points are the property of the earner.

I also routinely donate some of mine each year and I am claiming a tax deduction based on a fair market value which I print off at same time as donating a free ticket for example. It has worked for me for several years but heck this is Canada, not USA.

Alas, the Federal Government has never been prone to shy away from creating administrative nightmares.:rolleyes:

amen....

I miss 1998.

i graduated from law school in 1998....it was a good year....

It had to be better than graduating law school in 2010. I would know :D