Taxing Frequent-Flyer Miles
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Taxing Frequent-Flyer Miles
Some frequent flyers are finding that their reward miles aren’t as free as they thought.
Citibank customers who earned frequent-flyer miles for opening accounts received notices that they had to pay taxes on the value of the miles, reported Time magazine’s Martha C. White.
In response, those cardholders are taking Citibank to court. In their class-action lawsuit, the cardholders argue that they were not specifically informed that getting the miles could mean owing $350 in federal and state income taxes for 40,000 miles with American Airlines.
The lawsuit says that Citibank offered 40,000 frequent-flyer miles with American Airlines to anyone opening an account. It says that the bank didn’t specify that cardholders had to report 2½ cents per mile as income to the Internal Revenue Service, reported Time.
Citibank said they the promotional miles were a gift and are taxable.
“We are aware of the lawsuit filing and confident in the appropriateness of our disclosures, and we will vigorously defend this lawsuit,” a Citibank spokesman said in a statement.
Responses to “Work at Home”
For last week’s Color of Money question, I asked: “Do you have trouble turning off the ‘work you’ when you get home?” The question stemmed from an On Leadership blog posting by Brene Brown.
Brown wrote: “This emotional armor we bring to work is heavy, and the weaponry takes a long time to assemble, so when we get home in the evenings, we don’t put it away. It’s too much trouble, and, frankly, it’s too risky.”
Christine Valle of California said her kids – ages 20 and 17 – complain that she doesn’t turn off her work mode when she gets home. But she argues that she shouldn’t.
“I think that being a manager at work and being a parent can be complementary skills,” she wrote. Our children “are different with different skills, talents and ways of doing things. Just like employees. I’ve managed for about 25 plus years. The key is getting people to realize what their passion is, build on it, take a few risks to grow and continue to learn new skills for their entire lives.”
“I have learned over the years that I need an hour after work to decompress,” wrote Delores O’Mara of Juneau, Alaska. “Whether I meditate, read, or just enjoy solitude, it keeps me from snapping at my family and makes me an all around better person to be around. It’s hard on busy days when I already don’t have much time with family but I really need time away from everyone before I can process in a non-task oriented way.”
“I know a lot of people have this problem, but let’s turn it around: Why must we armor ourselves so heavily when we go to work?” wrote Earl Roethke of Minneapolis. “Do our work places really have to be a battle ground? In a well led company all the employees would understand that by cooperating, instead of competing for turf, the success of the whole is so much greater.”
Baby On Board
A reader recently wrote to The Washington Post @Work columnist Karla Miller to get advice on whether she should disclose that she is pregnant during job interviews.