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Interest earned from PenFed's Credit Card...Is it taxable?

Super Contributor

Re: Interest earned from PenFed's Credit Card...Is it taxable?


rubaty wrote:

I have been doing taxes on base for the last 4 years with training provided by the IRS in 2006 & 2007 and you don't have to claim the money earned by rewards credit cards.

 

You do have to claim any amount over $10 on any interest bearing account that is held by a bank, CU or other finanical institution.


You are right!

Message 11 of 16
Senior Contributor

Re: Interest earned from PenFed's Credit Card...Is it taxable?


DI wrote:

rubaty wrote:

I have been doing taxes on base for the last 4 years with training provided by the IRS in 2006 & 2007 and you don't have to claim the money earned by rewards credit cards.

 

You do have to claim any amount over $10 on any interest bearing account that is held by a bank, CU or other finanical institution.


You are right!


No he's not. Read it again. You only have to report interest UNDER 10 bucks? Think about it.

Message 12 of 16
Super Contributor

Re: Interest earned from PenFed's Credit Card...Is it taxable?

 

 

 Include amounts of $10 or more, whether or not designated as interest, that are paid or credited to the person's account by savings and loan associations, mutual savings banks not having capital stock represented by shares, building and loan associations, cooperative banks, homestead associations, credit unions, or similar organizations. Include interest on bank deposits, accumulated dividends paid by a life insurance company, indebtedness (including bonds, debentures, notes, and certificates other than those of the U.S. Treasury) issued in registered form or of a type offered to the public, or amounts from which you withheld federal income tax or foreign tax. In addition, report interest of $10 or more accrued to a trust interest holder (TIH) of a widely held fixed investment trust (WHFIT), a real estate mortgage investment conduit (REMIC), a financial asset securitization investment trust (FASIT) regular interest holder, or paid to a collateralized debt obligation (CDO) holder, as explained below.  www.irs.gov

Message Edited by DI on 01-09-2010 04:02 PM
Message 13 of 16
Super Contributor

Re: Interest earned from PenFed's Credit Card...Is it taxable?


smallfry wrote:

DI wrote:

rubaty wrote:

I have been doing taxes on base for the last 4 years with training provided by the IRS in 2006 & 2007 and you don't have to claim the money earned by rewards credit cards.

 

You do have to claim any amount over $10 on any interest bearing account that is held by a bank, CU or other finanical institution.


You are right!


No he's not. Read it again. You only have to report interest UNDER 10 bucks? Think about it.


The poster said over $10. 

Message 14 of 16
Senior Contributor

Re: Interest earned from PenFed's Credit Card...Is it taxable?

Currently the tax laws do not specifically cite rebates, points or other rewards.  However, it has been proposed on multiple occassions that these become taxable at their market value.

 

IRS code states that any income or increase is taxable.  Technically a garden is taxable at the market value of the harvested produce, minus the cost and expenses of its production.  However, it is unlikely that you will ever get garden audited Smiley Wink

 

For now the precedent has been not taxed, or at least not taxable if you don't claim them as income.  The future may hold different results as the government seeks new ways to raise more revenues to cover its ever expanding budgets and deficits.

 

 

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09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549
Message 15 of 16
Senior Contributor

Re: Interest earned from PenFed's Credit Card...Is it taxable?

Message 16 of 16