Author Topic: Citibank 1099 (Read 103234 times)

shmooz · « **on:** January 21, 2012, 09:49:13 PM »

Has anyone been succesful in arguing with Citi for the valuation of their 1099? Who did you call?

I got a 1099 for $1000 for getting 40k from a checking account in late 2010. The miles posted in 2010 and I thought I wouldnt get one, but they just sent it now.

Dan · « **Reply #1 on:** January 21, 2012, 10:06:48 PM »

Good luck, I doubt they will do a thing. They probably get a nice fat deduction off their corp taxes for over-inflating the value of the miles.

good sam · « **Reply #2 on:** January 21, 2012, 10:34:43 PM »

$1000???

That is theft considering what they offer for that amount of points.

mguy · « **Reply #3 on:** January 21, 2012, 11:22:40 PM »

There are reports of people adjusting the value on their return after following a procedure with the IRS (you can google around for form 4598 in conjunction with Citi/AA miles). I personally didn't want to go down that path.

shmooz · « **Reply #4 on:** January 21, 2012, 11:45:16 PM »

Wouldnt want to talk to the irs either. i suppose i'll just pay the tax and learn a lesson.

elizmm · « **Reply #5 on:** January 22, 2012, 12:15:18 AM »

Please excuse my ignorance, but why are they giving you a 1099? I have plenty of miles with citi and never got a 1099, do they give a 1099 for cashback too?

Dan · « **Reply #6 on:** January 22, 2012, 12:16:44 AM »

Just for checking accounts.

Name Changed · « **Reply #7 on:** January 22, 2012, 09:33:32 AM »

I also just got one - I got 25k AA miles - I got a 1099 for $625

Name Changed · « **Reply #8 on:** January 22, 2012, 09:42:32 AM »

Quote from: shmooz on January 21, 2012, 11:45:16 PM

Wouldnt want to talk to the irs either. i suppose i'll just pay the tax and learn a lesson.

What lesson - Even after paying the taxes - I think its prob still worth the miles... Comes out like $100 for 25k miles (in my case) thats not worth it for you?

Dan · « **Reply #9 on:** January 22, 2012, 09:50:32 AM »

Quote from: Name Changed on January 22, 2012, 09:42:32 AM

What lesson - Even after paying the taxes - I think its prob still worth the miles... Comes out like $100 for 25k miles (in my case) thats not worth it for you?

Your marginal federal+state+local tax rate is 16%?

For most people it will be more than double that. In some places triple that is not unheard of.

Name Changed · « **Reply #10 on:** January 22, 2012, 09:52:48 AM »

Quote from: Dan on January 22, 2012, 09:50:32 AM

Your marginal federal+state+local tax rate is 16%?
For most people it will be more than double that. In some places triple that is not unheard of.

I'm not exactly sure... I'll know once I file

But, I'm prob in the bracket that I get most of my taxes refunded

fred · « **Reply #11 on:** January 22, 2012, 03:01:02 PM »

it will probably cost me about 500.00 in taxes for 80k miles. (me and wife) not terrible, but would never have done it if i had known. The scary thing is that for people that get earned income credit value could be as high as 10k for some low income people, there is a limit of 3100 in unearned income. if you go a dollar over 3100 you loose all $10,000. I have a friend who just got the 1099 from citi for 2k and he almost had a heart attack!! thankfully he just stayed under the limit barely..... im sure this 1099 is going to cost someone out there his EIC....

Name Changed · « **Reply #12 on:** January 22, 2012, 03:28:08 PM »

Quote from: fred on January 22, 2012, 03:01:02 PM

it will probably cost me about 500.00 in taxes for 80k miles. (me and wife) not terrible, but would never have done it if i had known. The scary thing is that for people that get earned income credit value could be as high as 10k for some low income people, there is a limit of 3100 in unearned income. if you go a dollar over 3100 you loose all $10,000. I have a friend who just got the 1099 from citi for 2k and he almost had a heart attack!! thankfully he just stayed under the limit barely..... im sure this 1099 is going to cost someone out there his EIC....

Wow! good to know... At least mine is only for $625

Side incomer · « **Reply #13 on:** January 22, 2012, 03:34:21 PM »

Maybe it's time for a class action lawsuit?

AsherO · « **Reply #14 on:** January 23, 2012, 12:03:25 AM »

Quote from: fred on January 22, 2012, 03:01:02 PM

it will probably cost me about 500.00 in taxes for 80k miles. (me and wife) not terrible, but would never have done it if i had known. The scary thing is that for people that get earned income credit value could be as high as 10k for some low income people, there is a limit of 3100 in unearned income. if you go a dollar over 3100 you loose all $10,000. I have a friend who just got the 1099 from citi for 2k and he almost had a heart attack!! thankfully he just stayed under the limit barely..... im sure this 1099 is going to cost someone out there his EIC....

For $10k I'd consider risking an audit and not filing my 1099.

Dan · « **Reply #15 on:** January 23, 2012, 10:18:32 AM »

You're not risking an audit, you're practically guaranteed an letter audit.
Better to contest the value of the 1099.

AsherO · « **Reply #16 on:** January 23, 2012, 10:35:04 AM »

Quote from: Dan on January 23, 2012, 10:18:32 AM

You're not risking an audit, you're practically guaranteed an letter audit.
Better to contest the value of the 1099.

I forgot some 1099s in previous years and (BH, KA"H) avoided a letter audit, granted they were for smaller amounts.

Name Changed · « **Reply #17 on:** January 23, 2012, 01:36:30 PM »

Quote from: AsherO on January 23, 2012, 10:35:04 AM

I forgot some 1099s in previous years and (BH, KA"H) avoided a letter audit, granted they were for smaller amounts.

+1
Also the ones I forgot were really little dollar amounts

Dan · « **Reply #18 on:** January 23, 2012, 09:50:26 PM »

True, if it's small enough the IRS probably doesn't bother, but being that 1099s are sent to the IRS it's pretty dangerous stuff...may make them wonder what else you're hiding in the worst case scenario.

Redbull3 · « **Reply #19 on:** January 24, 2012, 09:24:26 AM »

AA sets the value at 2.5 not Citi. Citi used to offer 40k and 25k promotions for different types of checking accounts, and those are the ones that hit in 2011 and are getting 1099s now. In begining of 2011, Citi marketing realized this and the potentially disastrous PR and stopped launching offers over 24k (that's why 23,500 was the offer in the 2nd half of last year lol).

As far as class action law suit, the T&C always said "customers are responsible for taxes, if any." - so there goes that. You've been warned.

They may go back to raising the offer over 25k, look out for a 30k Citigold offer in your citi credit card statements, february e-mails and a direct mail in march or april (if you don't have a checking account), with better, clearer language in t&C (maybe something like... "this WILL generate a 1099 MISC and be reported to the IRS").