Using Your Bike for Business

Hi June,

Quick question about deductions - if you are self-employed, in my case a freelance technology consultant, and you use a bicycle every day to do things for work (going to clients' offices, picking up supplies, etc.), can you deduct the cost of the bicycle as well as the maintenance?

I read that next year there will be a deduction ($20/month) for employers whose employees use bicycles for work, but in the IRS publication (http://www.irs.gov/pub/irs-pdf/p15b.pdf) specifically says (p. 19) "a self-employed individual is not an employee for qualified transportation benefits."

This doesn't seem fair! I've asked 2 other accountants and got 2 different answers, so i turn to you, the acknowledged master of all self-employed tax
issues... :-)

thanks,
eric


Hi Eric,

Hmmmm ...."quick question" usually requires a three page answer. And "fair." You want the tax code to be fair! Well, you're not an employee. In many cases there are different regs for employees and indies. This is one of those cases. Unless there's new regs next year.

Here's what I would do: Treat bicycle expense similar to car expense. Figure out how much you use your bike for business transportation versus your total use and deduct that % of the total cost of your bike. A $300 bike used 90% for business would get you a $270 business equipment deduction. Repairs, new tires would be handled the same way.

Hope that helps.

Best,
June