Citi Says Those Free Rewards Miles You Received Are Taxable

If you received a bunch of miles from Citi for signing up for one of the bank's credit cards or rewards-earning accounts, be on the lookout for a 1099-Misc tax form coming in the mail, as Citi has decided that these miles have a taxable value.

Citi has put a value of around $.025 on each mile, meaning that if you signed up for some program that rewarded you with 25,000 bonus miles, the bank says you owe taxes on $625 of miscellaneous income and it's telling the IRS about it.

"I've been practicing for 25 years and I've never had an instance where miles have been treated as taxable," one CPA tells the L.A. Times' David Lazarus about Citi's decision to send out the 1099 forms.

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