Do you have to pay taxes on credit card rewards?
So you've accumulated frequent flyer miles and cash-back bonuses using your credit card - but do you have to pay taxes on them?
This post comes from Simon Zhen at partner site Credit.com.
But what about those frequent flyer miles and cash back bonuses that you receive when you sign up for a new credit card or spend with a credit card? Do you know whether you have to pay taxes on credit card rewards?
"If you receive non-cash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest," the IRS says in Publication 550 Investment Income and Expenses. "For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest." The cost to the bank is the value that must be reported.
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