ben hedges: maximize amex referral & sign-up bonuses! gold card, platinum, and tax tips

Hey credit warriors, welcome to the show. Now, I was browsing some articles on Doctor of Credit this morning. Great website, shout out to them. But anyway, I noticed an article on increased Amex referral bonuses, and also there are a load of increased welcome offers and signup bonuses as well. More on that in a moment, but let's talk about these increased referral bonuses. Now, if you don't know, you can get rewarded in the form of Amex membership rewards points, or in some cases cashback, for referring your friends to Amex cards. And you can actually refer them to pretty much any Amex card, except the co-branded Platinums, like the Charles Schwab Platinum, et cetera. Now, many people have reported seeing referral bonuses of up to 35,000 points per referral in their accounts. I personally see 30,000 points per referral on my Amex Gold Card account. Now, it is still limited to 55,000 points per year, same as before, but that does mean that at 30,000 or 35,000, if you get two referrals, you've basically maxed it out. And so that means that the average person who does not have a big social media following or whatever can at least get one, if not maybe two referrals and max it out per year, okay, if you're at 30,000 or 35,000. And if you're in two-player mode, i.e. you're doing credit card rewards with your spouse, you know, you refer your wife or girlfriend, she refers you back, and boom, you got a load of points. And yeah, like we said, you can actually refer to any card, not just the one that you're using the referral link from. So great, if they want the Gold Card, they can get 60,000 points using my Gold Card link, and I would get the 30,000 for being the person who is doing the referring. So together, we'd have 90,000. And in the case of me and Mrs. Credit Shifter, we'd probably just pull those points and travel somewhere together anyway. So it really does go a long way. But then they could also look at other cards. The Amex Blue Cash Preferred, for example, is offering $300 in cash back as a welcome bonus. Then we have an elevated welcome bonus on the Green Card, 45,000 instead of 30,000. The Hilton Honours Card, the basic one with no annual fee, they're offering 100,000 points plus $100 statement credit as the welcome bonus. And the Platinum Card is still going with its 60,000 points plus 10 points per dollar on gas spending on $15,000 worth of spending in the first six months. So it's a really great time to get a new Amex Card right now. I'll put the links to the Gold and the Platinum Cards below in case you're interested to check them out, learn more about them. And obviously, it's a really great time to be referring others as well. So Amex Card members, especially Gold Card members, because this is the specific card that people have been seeing these increased offers on, I would suggest that you log into your account and check out, see what offer you have. Like I said, I had 30,000 points per referral. It appears here. And what I would suggest you do is actually copy that link and save it somewhere on your computer because these links change from time to time and they do expire, et cetera. But actually, often it can be the case that in the future, even if you are not showing a current referral bonus as good as that, if you've saved a link from before, it may actually still be valid. So you can check that. Obviously, don't send people your link without checking it and they get an error message. But what you can do, if you saved a link from before, open it up, see if it still gives access to those increased signup bonuses. And if it does, then you can send that over to someone and you should get the original increased referral bonus as well, even if it has changed, okay? Not guaranteed, but this can sometimes work. So save those links. Now, some people have also asked me, do you get taxed on Amex membership rewards? And for this, the answer is yes. This is actually the only instance in which you can get taxed on credit card rewards, okay? Because if you think about it, you're basically doing some freelance marketing work for American Express, okay? Marketing their product to your friends and family and they're paying you in the form of membership rewards points. Or if your link comes from a cashback card, they'll actually pay you in cash. They'll send you a 1099 form. And if they send you a 1099 form, that means they've also already reported that information to the IRS. So don't think that you can get away with not reporting it. The IRS already knows. Now, the good thing is that they only value membership rewards points at one cent per point. In reality, you can get a lot more value out of them, but that's what they value them at. So if you've maxed it out at 55,000 points, the maximum amount of money of income that will be reported is $550. Now, I already have a few 1099 forms from Amex that we received for the referrals we did last year in 2020. I'll share with you briefly how I deal with them because I get these every year. I do a few referrals every year, normally max it out, and Mrs. Credit Shipper as well. So how I deal with this, so 1099 forms are reported on Schedule C when you do your taxes. And what I do is that I list the annual fees as business expenses on that Schedule C form because if you think about it, if you did not have the card, you wouldn't be able to do the referral. So you have to pay the annual fee in order to get the card so that you can actually do those referrals, all right? So I'll give you an example. If it was maxed out and it's $555 for 55,000 points reported as income, let's say it's the Amex Gold, $250 annual fee, I then subtract that from the 550, which gives me a profit of $300, and you're only taxed on profit, okay? Because you have that basic expense. So if you were taxed, let's say 20% or something, that would be $60 in federal taxes that you'd have to pay on that. Obviously, there's a few other things like Social Security and state taxes and other things like that, but that's kind of basically how it works. Now, guys, to be clear, though, this is not tax advice, and I'm just sharing with you what I personally do. I did check this with my CPA before I did it, and she said that it was okay to do it this way, but things may differ for you in your personal situation. So I do encourage you to check with your tax professional before you do anything like this and exactly how to report this income, et cetera, and whether you can claim expenses against it, okay? Check with your tax professional first. All right, guys, that is the video. Don't forget to check your Amex referral bonuses in your account and see what you've got. Let me know what bonuses you have in the comments below. Like me on Instagram. I'm also now on Clubhouse. Haven't done anything with it yet, but you can check me out and follow me on there at the credit Shifu Samers or my other social media. Amex Gold and Platinum Card links are below to check them out. Please subscribe if you're new. We'll see you next time. Bye-bye.