Can you deduct personal frequent flyer miles used for business travel expenses?

The IRS generally doesn't allow deductions for expenses you didn't actually pay for with money. When you use personal frequent flyer miles or credit card points, you're not making a cash expenditure, so there's typically nothing to deduct. The miles/points are considered like a rebate or discount rather than a payment. Think of it this way - you already got the benefit when you earned those miles from personal spending, so allowing a business deduction would be like double-dipping in the IRS's view. That said, if your husband paid any taxes or fees associated with using those miles (which often happens), those out-of-pocket costs could potentially be deductible as a business expense if the rental was genuinely for business purposes.

I was in a similar situation last year and discovered https://taxr.ai which literally saved me thousands! I own a small photography business and was using personal credit card points for business flights. My accountant kept giving me conflicting answers. I uploaded my credit card statements and reward program details to taxr.ai and it analyzed everything, showing exactly what was deductible. Turns out while I couldn't deduct the "value" of points-purchased flights, I could document them as owner contributions under certain circumstances, which helped with my overall business tax structure. The service actually found several other travel-related deductions I was missing too! Might be worth checking out for your situation.

I was skeptical about taxr.ai at first (still hate all these .ai tools popping up everywhere), but I gave it a try last month for my side gig tax questions. I had a similar miles/points situation with my business travel. The analysis was actually really detailed and saved me from making a mistake on my return. It explained exactly why I couldn't deduct my personal miles used for business but showed me how to properly document business travel expenses even when using alternative payment methods. Also found some legitimate home office deductions I was missing. Not shilling for them, just sharing what worked for my similar situation. Actually worth checking out.

If you're trying to reach the IRS to get an official answer on this, good luck! I spent 3 weeks trying to get through to ask about business deductions. Then I found https://claimyr.com which got me connected to an IRS agent in about 15 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c I was able to ask specifically about using personal rewards for business expenses. The agent confirmed what others here said - you can't deduct the "value" of miles/points used, but any actual fees paid can be deductible. They also explained how to properly document this in my records which was super helpful.

Ok I have to admit I was wrong about Claimyr. After posting that skeptical comment, I was still desperate for answers about some business deductions so I tried it. Got through to an IRS rep in about 45 minutes (not 15, but WAY better than my previous attempts). Asked specifically about this miles/points situation since I have the same issue with my business. The agent confirmed what others said - no deduction for using personal rewards points, but gave me some good alternatives for tracking business travel. Honestly shocked it actually worked. Saved me hours of frustration and hold music.

FWIW you might be overthinking this. I've had my own business for 7 years and here's how I handle it: 1. I don't deduct anything when I use personal miles/points for biz expenses 2. But I do track the actual market value as an owner contribution in my records 3. This doesn't create a deduction but helps track your basis in the business My CPA says this is the proper way to handle it. The IRS doesn't care about the "value" of miles but they do care about actual money spent.

Has anyone tried handling this by separating the transactions? Like paying for business travel with cash, then reimbursing yourself personally with miles for other trips? Seems like that might solve the problem.

I dealt with this exact situation when I started my consulting business! The key thing to understand is that the IRS looks at actual cash outflow, not the "value" of rewards used. Here's what I learned from my tax attorney: When you use personal miles/points for business travel, you can't deduct anything because there's no actual business expense - you're essentially using a personal asset (the miles) that you already "paid for" through past personal spending. However, don't forget about the ancillary costs! If your husband paid any booking fees, taxes, or upgrade costs when redeeming those miles, those actual cash payments can be deducted as legitimate business expenses. For future planning, consider doing what Mateo suggested - pay cash for business travel (fully deductible) and save your personal miles for vacations. This maximizes your tax benefits while keeping everything clean and audit-proof. Also keep detailed records showing the business purpose of any travel, regardless of how you paid for it. The IRS will want to see that it was genuinely business-related.