Can You Earn a Tax Deduction by Redeeming Miles & Points for Business?
Signing up for credit cards through partner links earns us a commission. Terms apply to the offers listed on this page. Here’s our full Advertising Policy.Update: One or more card offers in this post are no longer available. Check our Hot Deals for the latest offers.
Million Mile Secrets reaer, Jason, writes:
I’m using lots of points and miles for business purposes, i.e. flying in bands for an event on miles, and putting them up in a hotel with points.
I know that some contests involving points giveaways have tax implications, so I’m assuming I can somehow deduct the value of the points as an expense? If so how could I point my accountant in the right direction?
Can Jason get a tax deduction from the award flights and hotel stays he booked for his business? Unfortunately, NO.
I’ll explain why!
Why You Can’t Deduct Business Travel Paid With Miles & PointsDisclaimer: I am NOT a tax professional, so please consult YOUR tax professional before you make any tax-related decisions.
Fortunately, the IRS does NOT assign a monetary value to miles and points! That’s great news, because I and many readers have earned millions of points over the years. If we all had to pay taxes on them, we’d owe BIG money!
Because miles have no value in the eyes of the IRS, Jason will NOT get a deduction on his taxes.
Pay With the Right Card & Save the Miles for Yourself
There are so many once-in-a-lifetime opportunities that miles and points can make a reality for you. So unless Jason is really strapped for cash, it’s better to keep the miles for his own adventures and save the cash for business expenses.
Instead, he could pay for travel, dining, and other business expenses with an American Express card and earn benefits such as:
- AMEX Simply Cash – 3% on the category you choose)
- The Business Gold Rewards Card from American Express OPEN – 3X American Express Membership Rewards points on airfare purchased directly from airlines (if you choose this as a bonus category)
- The Business Platinum® Card from American Express OPEN – $200 statement credit for airline incidentals and lounge access
If you use miles and points to pay for business expenses, you won’t get a tax write-off.
And unless you are running a start-up business that’s very low on cash, you’re likely better off paying for business travel out of pocket and using your miles and points for personal travel.
Thanks for your question, Jason!
Chase Sapphire Preferred® CardAPPLY NOW
Chase Sapphire Preferred® Card
Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 80,000 points are worth $1,000 toward travel.
Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash’s subscription service. Activate by 12/31/21.
Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Either $5 or 5% of the amount of each transfer, whichever is greater.
Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)