The last day to file your taxes is on April 15, and for those who like to wait until the final few weeks of tax season, rounding up documents and preparing to file can come with plenty of questions. For points enthusiasts, there are some extra factors to consider as well.<\/p>\n
“Can I cash out my points?” is a common question. We’ve previously discussed options for cashing out your points<\/a> and whether it’s worth doing in terms of the value you’ll get.<\/p>\n Any discussion on cashing out points leads to a follow-up question: Are there tax implications in doing so? We consulted with a tax specialist to discuss what \u2014 if any \u2014 tax implications apply to people who decide to cash out their points.<\/p>\n Read on to find out more as you prepare to file your taxes this spring.<\/p>\n Let’s say you spend money on your credit card in bonus categories<\/a> where you earn extra points, or you earn a welcome bonus on a credit card<\/a> after spending a certain amount of money across a set period of time. We already know that banks will sometimes send out 1099s for referral bonuses<\/a>, so what about these credit card rewards? If you opt to cash out the points you’ve earned on a credit card, is that taxable?<\/p>\n When it comes to personal use of rewards earned by making purchases on a credit card, there’s a clearer picture.<\/p>\n “The IRS treats those rewards as discounts or rebates and not as taxable income; so the general rule of thumb, no, not taxable from a personal level,” Jackie Meyer, CPA and founder of tax advisory software TaxPlanIQ<\/a>, said.<\/p>\nTax implications for cashing out points and miles<\/h2>\n
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