Can You Earn a Tax Deduction by Redeeming Miles & Points for Business?

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Can You Earn a Tax Deduction by Redeeming Miles & Points for Business?

Million Mile SecretsCan You Earn a Tax Deduction by Redeeming Miles & Points for Business?Million Mile Secrets Team

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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.

Can You Earn A Tax Deduction By Redeeming Miles Points For Business
Jason Will NOT Get a Tax Write-Off When He Uses His Miles & Points to Cover Business Travel Expenses

I’ll explain why!

Why You Can’t Deduct Business Travel Paid With Miles & Points

Disclaimer:  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!

Can You Earn A Tax Deduction By Redeeming Miles Points For Business
The IRS Views Miles & Points as They Do Coupons & Rebates, They’re a Discount but Have NO Cash Value

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.

Can You Earn A Tax Deduction By Redeeming Miles Points For Business
Although Your Miles & Points Aren’t Valuable to the IRS, Using Them to Get Away From Work and Relax in Your Next Dream Destination Is Priceless!

Instead, he could pay for travel, dining, and other business expenses with an American Express card and earn benefits such as:

Bottom Line

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!

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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! :)

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But bank fees including credit card fees are deductible as business expenses if the expense is a legitimate business expense.

Well, while not a tax professional either, I’d beg to differ in a limited circumstance.

If you purchase airline miles or hotel points with cash, I would think that the airfare or hotel night acquired via points or miles would be deductible when using THOSE points or miles.