Business Tax Deductions – Revolutionizing Your Journey

Are Credit Card Points Taxable? A CPA Explains What the IRS Actually Cares About with Rachel Earl (Ep. 75)

By Bakir Djulic | May 21, 2025

Are your points and miles taxable?

In 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.

The conversation also dives into smart tax planning strategies that can earn you valuable points—like paying estimated taxes by card—and 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.

Key Highlights:

Points vs. taxes: Points and miles from sign-up bonuses are not taxable, but referral bonuses may be.
IRS guidance: Current IRS rulings on this topic haven’t been updated since 2002.
Cashback simplicity: Cash back is generally not considered taxable income.
Credit card usage: Personal cards can be used for business expenses with proper documentation.
IRS priorities: The IRS does not track individual cardholders or card usage patterns.
Bank bonuses: These are reported on 1099-INT forms and are treated as interest income.
W2 caution: W2 employees should be careful when opening a business entity for points purposes.
Estimated tax payments: Can be used to earn points, but risks and limits apply—especially in states like California.
Record-keeping: QuickBooks or other tracking tools help streamline expense categorization.
Wanderlog for travel: A useful tool for organizing travel plans and expenses.

This episode is sponsored by Saily. Use Code BOLDLYGO for a 15% discount

Resources:

LTH Online Points & Miles In Depth Course:
- Use coupon code “BOLDYGO” for a 50% discount!
BoldlyGo Travel With Points & Miles Facebook Group
Truicity Wealth Management

CPA’s Footnotes:

https://www.irs.gov/pub/irs-drop/a-02-18.pdf
https://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)
https://www.irs.gov/pub/irs-wd/202417021.pdf (This is for those who want to get really nerdy about tax and points)
https://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)