{"href":"http://player.captivate.fm/services/oembed?url=http%3A%2F%2Fplayer.captivate.fm%2Fepisode%2F67808596-c60b-4fa8-aeac-c3b4a2b9f449","version":"1.0","provider_name":"Captivate.FM","provider_url":"https://www.captivate.fm","width":600,"height":200,"type":"rich","html":"","title":"Are Credit Card Points Taxable? A CPA Explains What the IRS Actually Cares About with Rachel Earl (Ep. 75)","description":"Are your points and miles taxable?
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\r\n\u00a0In this episode, host DeAndre Coke is joined by CPA Rachel Earl to demystify the often-confusing world where travel rewards and taxes meet. They unpack how the IRS views points earned from credit card sign-up bonuses, referral links, and cashback programs, and clarify when travel rewards might be considered income.
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\r\nThe conversation also dives into smart tax planning strategies that can earn you valuable points\u2014like paying estimated taxes by card\u2014and covers key insights around bank bonuses, QuickBooks tracking, and business credit card usage. Rachel shares her professional insights as well as personal travel tips, offering a rare intersection of finance, strategy, and wanderlust. This episode is a must-listen for anyone looking to navigate the financial side of travel rewards with more clarity and confidence.
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\r\nKey Highlights:
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\r\n \tPoints vs. taxes: Points and miles from sign-up bonuses are not taxable, but referral bonuses may be.
\r\n \tIRS guidance: Current IRS rulings on this topic haven\u2019t been updated since 2002.
\r\n \tCashback simplicity: Cash back is generally not considered taxable income.
\r\n \tCredit card usage: Personal cards can be used for business expenses with proper documentation.
\r\n \tIRS priorities: The IRS does not track individual cardholders or card usage patterns.
\r\n \tBank bonuses: These are reported on 1099-INT forms and are treated as interest income.
\r\n \tW2 caution: W2 employees should be careful when opening a business entity for points purposes.
\r\n \tEstimated tax payments: Can be used to earn points, but risks and limits apply\u2014especially in states like California.
\r\n \tRecord-keeping: QuickBooks or other tracking tools help streamline expense categorization.
\r\n \tWanderlog for travel: A useful tool for organizing travel plans and expenses.
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\r\nThis episode is sponsored by Saily. Use Code BOLDLYGO for a 15% discount
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\r\nResources:
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\r\n \tBook a Free 30 minute points & miles consultation
\r\n \tStart here to learn how to unlock nearly free travel
\r\n \tSign up for our newsletter!
\r\n \tThis month's best current card offers
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\r\n \tBoldlyGo Travel With Points & Miles Facebook Group
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\r\nInterested in Financial Planning?
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\r\n \tTruicity Wealth Management
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\r\nSome of Our Favorite Tools For Elevating Your Points & Miles Game:
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\r\nNote: Contains affiliate/sponsored links
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\r\n \tCard Pointers (Saves the average user $750 per year)
\r\n \tZil Money (For Payroll on Credit Card)
\r\n \tTravel Freely
\r\n \tPoint.me
\r\n \tFlightConnections.com
\r\n \tThrifty Traveler Premium
\r\n \tLTH Online Points & Miles In Depth Course:\u00a0
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\r\n \tUse coupon code \"BOLDYGO\" for a 50% discount!
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\r\nCPA's Footnotes:
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\r\n \thttps://www.irs.gov/pub/irs-drop/a-02-18.pdf
\r\n \thttps://www.thetaxadviser.com/issues/2021/may/credit-card-rewards-purchases-gift-cards/ (Interesting Tax Court case about how a couple redeemed points and what the Court considered taxable income)
\r\n \thttps://www.irs.gov/pub/irs-wd/202417021.pdf (This is for those who want to get really nerdy about tax and points)
\r\n \thttps://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax (Resource for those that may want to know more about Net Investment Income Tax)
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\r\nConnect with DeAndre Coke:\u00a0
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\r\n \tInstagram: BoldlyGo.world
\r\n \tTikTok: BoldlyGo.world\u00a0
\r\n \tWebsite: BoldlyGo.world
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\r\n \tYouTube: BoldlyGoWorld
\r\n \tYouTube: BoldlyGo.Travels
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\r\nConnect with Rachel Earl:
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\r\n \tInstagram: viachoremtax
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