Welcome to The Morning Shave. We read a ton of travel articles each day for our personal research and to share the best travel tips and tricks with you. Here are the articles for Thursday, January 2, 2020, that we think you should read.
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The Morning Shave
The most important thing to bring to Disney World. – I’m planning a trip to Disney World with the family in 2020, so this is great advice by Summer. As a parent, we bring a lot of things with us for the kids (and our sanity), but this one (free) thing is just as important as the rest. It will save you time and money by cutting down your waits for rides and food.
Here’s How Long You Should Take Off to Feel Productive at Work Again, According to New Study. – When I worked a corporate job, I would take a lot of long weekend vacations rather than taking a week at a time to stretch out my time off. Although that gave me the ability to book extra vacations, maybe I should have booked more 1 to 2 week trips to maximize my physical and emotional health. At least according to this survey.
Chasing Status in 2020: A Worthless Pursuit? – I think chasing status is worthless for the average traveler. Even if you earn the first or second tier of status, the benefits are basically the same as if you had the airline’s credit card. For most travelers, you are better off having an airline’s credit card to waive checked bag fees and get priority boarding. Then be a free agent and book whichever flights suit you best (departure time & city, non-stop, etc.).
Free Top Tier Rental Car Status If You Have An(y) American Express Card. – Break out your Amex card and sign up for free elite status with this rental car company. Even if you don’t have plans to rent a car right away, take advantage of this free offer while you can. Rental car elite status can save you money, time, and hassles on your next vacation.
WARNING: Your Bank is about to Tax your Airline Miles. – This makes complete sense because the bank is giving you American Airlines miles instead of interest. It is a passive activity, just like investing or saving. This is completely different than miles, points, or cash back earned on spending, which is perceived as a rebate on your purchases. I just hope that the bank assigns a reasonable value to the miles.
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When you link to clickbait nonsense articles and include the same clickbait headline, you bring the credibility of your blog down to a “nomascoach” level. Check the comments in the linked nomascoach article to get a full breakdown of the myriad issues with that article and headline. I only took the time to post this because my expectations of this blog were higher than this.
I appreciate the feedback. I linked to the article because I know that a lot of people have these accounts (or are at least interested in opening them) as a way to earn more miles.
My response to them is that it is reasonable for the bank to tax these miles because they are in lieu of interest. Nobody would balk at being taxed for the interest that they’ve earned because it is the standard. I think anyone who has gotten away without these miles being taxed in the past should count their blessings.
I do agree with them that it is in bad taste that the bank has not shared how they will value the miles. That kind of uncertainty makes people nervous. And I also agree that people should dispute values assigned in 1099s if they feel that the amount is too high.
While I do agree that the title of their article is a bit clickbaity, the topic itself is worthy of discussion. I appreciate you reading my articles and sharing your thoughts.
Miles belong to the airline, or more specifically the program. They don’t belong to the individual. How can an individual be taxed for something that isn’t even theirs?
You make a good point. Airlines are quick to point this out as justification for clawing back miles and points from your account (or forfeiting your account altogether). However, we still get to use them in place of paying cash for our flights, so I doubt the IRS would accept this argument.
I’m fearful that people will push back too hard on these somewhat trivial matters and the IRS will decide to tax all miles, points, and cash back. The airlines, hotels, and banks get to expense the rewards they give out to customers. Yet, we don’t pay taxes on them, except in situations like this where they are awarded in lieu of interest or as a signup bonus on a bank account. Seems like an easy argument for the IRS to make since there is a chunk of money that isn’t being taxed. And you know the government loves collecting taxes.
IIRC, the reason they traditionally haven’t been taxed is they’re considered a rebate rather than income.
That’s what I understand as well. It makes complete sense for consumers. But, for businesses that deduct the full expense of everything that they charge, the IRS could make the argument that the rebate should reduce the amount of the expense used to reduce taxable income.