Bike to work day is coming up on June 22nd. Questions arise this time of year and especially in Fort Collins if mileage on a bicycle can be deducted the same as mileage on a car. Several of my Fort Collins business owners ride their bikes to work and visit their client’s on bicycles. They would like to get a tax deduction just like their car-owning business partners.
While there is not a mileage deduction for bicycles there is a qualified bicycle commuting reimbursement fringe benefit for employers to give their employees who commute on a bike. It falls under the qualified transportation fringe benefits and works like this: An employer can reimburse an employee for transportation expenses and not be required to add it the employee’s compensation for things like train, bus , ferry or parking passes and expenses incurred by the employee for the purchase of a bicycle and improvements, repair or storage. This exclusion is limited to $20 per month on a bicycle regularly used for a substantial portion of the employee’s commute. Last time I looked you couldn’t purchase a bicycle for $20 or even $240 (12 months of $20 a month), but I guess it is something. The limit for the passes for the car owners is $240 per month. I’m pretty sure in our little community monthly parking passes or bus passes do not come to $240 but perhaps these limits make more sense back East.
Unfortunately partners, S corporation shareholders, sole proprietors and independent contractors cannot exclude qualified transportation fringes.