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Fare of the Day: New York to Nassau, Bahamas $295 RT including all taxes

Posted by Tracy Stewart on Tuesday, February 28, 2012

Fly from New York to Nassau, Bahamas for $295 round-trip, nonstop, including all taxes, on JetBlue.

This fare is valid for spring/summer travel through July.

For booking info, see our fare details.

To learn more, visit Tracy Stewart's profile on Google+

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Fare of the Day: Los Angeles to Singapore $655 RT including all taxes

Posted by Tracy Stewart on Monday, February 27, 2012

Fly from Los Angeles to Singapore for $655 round-trip, including all taxes, on Delta Air Lines.

This fare is valid for travel on a handful of dates from March through July. Similarly priced seats ($668) available for travel on other dates. Seats are limited, so get a move on!

Thanks to reader Matt E. who tipped us off to this one over the weekend.

For booking info, see our fare details. And visit our Singapore fare page for a look at all current listings.

 

To learn more, visit Tracy Stewart's profile on Google+

Fare of the Day: New York to Chicago $123 RT, nonstop, including all taxes

Posted by Tracy Stewart on Friday, February 24, 2012

Fly from New York to Chicago for $123 round-trip, nonstop, including all taxes, on Southwest.

This fare is good for travel on Tuesdays and Wednesdays through June 20. Tickets require a 10-day advance purchase. No minimum stay required.

For booking info, see our fare details.

To learn more, visit Tracy Stewart's profile on Google+

Fare of the Day: Oakland to Honolulu $389 RT, nonstop, including all taxes

Posted by Tracy Stewart on Thursday, February 23, 2012

Fly from Oakland to Honolulu for $389 round-trip, nonstop, including all taxes, on Alaska Airlines.

This fare is valid for travel on Mondays through Thursdays, from April 24 through June 8. No advance purchase required.

Slightly lower fares are available on some dates with other carriers, but include connections.

For booking info, see our fare details.

To learn more, visit Tracy Stewart's profile on Google+

Fare of the Day: New York to San Diego $255 RT including all taxes

Posted by Tracy Stewart on Wednesday, February 22, 2012

Fly from New York to San Diego for $255 round-trip, nonstop, including all taxes, on JetBlue.

This fare is good for travel on a handful of dates in early March. Valid for travel on Tuesday, Wednesday, and Saturday. Latest travel date is March 14. Tickets require a 7-day advance purchase.

For booking info, see our fare details.

To learn more, visit Tracy Stewart's profile on Google+

Fare of the Day: Detroit to Las Vegas $197 RT, nonstop, including all taxes

Posted by Tracy Stewart on Tuesday, February 21, 2012

Fly from Detroit to Vegas for $197 round-trip, nonstop, including all taxes, on Southwest.

This fare is valid for travel every day between October 1 and November 2. This one won't last, so get a move on!

For booking info, see our fare details.

To learn more, visit Tracy Stewart's profile on Google+

$50 Promo Code from Aer Lingus for Spring/Summer Travel

Posted by Tracy Stewart on Friday, February 17, 2012

Save $50 on your next flight with Aer Lingus, when booking a round-trip ticket to Dublin or Shannon from Boston, Chicago, New York, or Orlando. Just enter promo code TVLEIZOO when booking.

This offer is valid for travel from April 1 through June 30. Code expires February 22.

Fares with code include:

Boston to Dublin $549 round-trip, including all taxes

Chicago to Dublin $675 round-trip, including all taxes

New York to Dublin $564 round-trip, including all taxes

New York to Shannon $546 round-trip, including all taxes

To learn more, visit Tracy Stewart's profile on Google+

Fare of the Day: Detroit to Spokane $197 RT including all taxes

Posted by Tracy Stewart on Friday, February 17, 2012

Fly from Detroit to Spokane for $197 round-trip, including all taxes, on United Airlines.

This fare is valid 7 days a week, for fall travel from September through December. Seats are limited.

For booking info, see our fare details.

To learn more, visit Tracy Stewart's profile on Google+

New Service to Colorado Springs from Frontier

Posted by Tracy Stewart on Thursday, February 16, 2012

From Frontier, save on new nonstop service between Colorado Springs and Los Angeles, Portland, Phoenix, and Seattle. Tickets require a 14-day advance purchase.

Flights begin May 18 (and May 19 for Portland), and sale fares are valid for travel through June 18. Seats are limited and certain flights and/or days of travel may be unavailable, especially during busy travel periods.

All tickets must be booked by 11:59pm ET, February 29. Fares include:

Los Angeles to Colorado Springs $138 round-trip, including all taxes

Portland to Colorado Springs $178 round-trip, including all taxes

Phoenix to Colorado Springs $98 round-trip, including all taxes

Seattle to Colorado Springs $178 round-trip, including all taxes

For a complete listing of fares, please visit our Colorado Springs page.

To learn more, visit Tracy Stewart's profile on Google+

Are Taxable Frequent Flyer Miles in Your Future?

You probably never paid a penny in taxes for the frequent flyer miles you've earned. I certainly haven't.

There's only one exception to the no-tax-on-miles rule, as it's been generally understood. If you win frequent flyer miles in a contest or sweepstakes, the sweepstakes host publishes an estimated retail value of the miles in the terms and conditions, and sends a 1099 form to the winner and to the IRS, which considers the prize's value to be tantamount to extra income and taxable as such.

On the other hand, there are no tax consequences for earning frequent flyer miles for day-to-day transactions, such as shopping, traveling, and so on.

But what about the miles that banks award as incentives to open checking and savings accounts? Or the miles that credit card issuers routinely give to consumers as an incentive to apply for new cards?

Until recently the prevailing assumption on the part of both mileage-earners and tax experts was that such sign-up bonuses were not taxable.

This year, however, as reported by the Los Angeles Times, Citibank began sending 1099s to customers who had received mileage bonuses for opening savings or checking accounts. And of course, copies of those 1099s were also sent to the IRS.

Citi's move—which it claims is in response to IRS guidelines—raises a host of questions and concerns. Among them:

Citi valued the AAdvantage miles awarded for opening checking and savings accounts at 2.5 cents each. While it's possible to get that much value for the miles when redeeming them, my estimate of the average value of a mile is around 1.2 cents. And certainly Citi paid American much less than 2.5 cents apiece for the miles. In fact, the vagaries of valuation are one of the issues that the IRS has historically cited as an insuperable barrier to taxing miles.

What's the difference between earning miles for opening a bank account and miles earned for signing up for a credit card? If the former incentive is taxable, why isn't the latter? With the marketplace awash in lucrative credit card sign-up bonuses, this question is hardly academic—hundreds of thousands of consumers would be affected if credit card bonuses were treated like bank account bonuses.

And if bonuses for financial services transactions are taxable, wouldn't that suggest that miles earned for other transactions were taxable as well?

According to David Lazarus, who wrote the L.A. Times story, the IRS considers the bank account bonuses to be "income miles," while other bonuses are "rebate miles." The logic of that distinction eludes me.

So, what to do? This is what Eva Rosenberg, my tax advisor and publisher of TaxMama.com, advises: "ANYTIME you get a 1099 form of any kind, report it on your tax return wherever the IRS computer expects to see the income. In this case, on Line 21, Other Income. Then, if the income is not taxable, deduct it back out, and include a statement explaining why it's not taxable."

I'm sure that's solid advice. But I'm equally sure that any policy that causes so much confusion, and that requires taxpayers to report, back out, and then explain themselves, is a policy that needs to be rescinded.

Apparently Senator Sherrod Brown (D-Ohio), chairman of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, agrees. He appealed directly to Citi chief Vikram Pandit to "end this gratuitous practice. The Internal Revenue Service (IRS) clearly stated that frequent-flier miles are not subject to income tax."

Since there's obviously disagreement as to the interpretation of the IRS' rules, frequent flyers can only hope that he and like-minded politicians will take the no-tax case to the IRS as well.

Reader Reality Check

Did you earn miles for opening a new savings or checking account in 2011? Did the bank send you a 1099 for the miles?

This article originally appeared on FrequentFlier.com and SmarterTravel.com.

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