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Tax deductible bike?

Old 10-22-08, 02:24 PM
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Tax deductible bike?

Hey all, I was thinking about this, but does anyone know if a bike can be deducted from taxes in any of these situations:

1. Business expense - advertising, if I were to put a "wrap" with my business info (similar to a vehicle wrap) or if I were to say make and attach a sponsor sign (similar to sponsorship plates in a race)

2. Hobby expenses - not sure what all can be deducted here, but I've seen it on tax forms

3. Medical expense - if riding is your main method of "staying healthy" cuz you can't afford insurance.

I know commuters can deduct and/or get tax breaks, but for those of us non commuters......anyone?
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Old 10-22-08, 02:44 PM
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Originally Posted by CollectiveInk
Hey all, I was thinking about this, but does anyone know if a bike can be deducted from taxes in any of these situations:

1. Business expense - advertising, if I were to put a "wrap" with my business info (similar to a vehicle wrap) or if I were to say make and attach a sponsor sign (similar to sponsorship plates in a race)

2. Hobby expenses - not sure what all can be deducted here, but I've seen it on tax forms

3. Medical expense - if riding is your main method of "staying healthy" cuz you can't afford insurance.

I know commuters can deduct and/or get tax breaks, but for those of us non commuters......anyone?

If the polls are right this time, and you can indeed write off any bike expense, you can probably kiss that idea goodbye.
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Old 10-22-08, 02:50 PM
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Medical expense won't work. You could probably get away with a business expense if you also had some logo'd clothes made up and wore them while riding. Hobby expense won't work unless you are making something cycling related and selling it. Then you could claim the income from that as hobby related and write off your bike as testing expense.
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Old 10-22-08, 02:59 PM
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Can you build a frame, from tubes, and want to do it as a hobby where you may in fact sell some but not make any real money? I know someone who built his own bike from the tubes for him and his wife. I wonder if he takes them as hobby deductions for the cost of some part of it.

I wouldn't think just buying a frame and parts then putting it together would count as a hobby but maybe if you flip bikes?

If you are going to for the business expense route make sure to get some really deep rims or maybe a disc on the back so you have lots of display area Either of these deductions have been listed at some point or another as a HUGE audit red flag so please consult a tax advisor or something.
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Old 10-22-08, 03:17 PM
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How do you prove that you commute?
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Old 10-22-08, 04:05 PM
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I'm a CPA, so I like these kinds of questions!

Originally Posted by CollectiveInk
Hey all, I was thinking about this, but does anyone know if a bike can be deducted from taxes in any of these situations:

1. Business expense - advertising, if I were to put a "wrap" with my business info (similar to a vehicle wrap) or if I were to say make and attach a sponsor sign (similar to sponsorship plates in a race)

2. Hobby expenses - not sure what all can be deducted here, but I've seen it on tax forms

3. Medical expense - if riding is your main method of "staying healthy" cuz you can't afford insurance.
#3 is definitely not a legitimate deduction unless your doctor specifically ordered you to ride a bike for rehabilitation (as opposed to general, overall health) purposes. And if this happened (doubtful), you must spend no more than what would be considered "reasonable" under the circumstances.

Regarding #2, hobby expenses can only be deducted to the extent of hobby income. As an example, if you were a part-time bike racer (not a professional cyclist) and won $1,000 in prizes, you can't deduct more than $1,000 in bicycle related expenses. You can never have hobby losses to offset ordinary income.

#1 would probably be your best bet. But keep in mind that if audited, the IRS can say these aren't legitimate expenses and disallow them. As a former auditor, here's how I'd evaluate this type of expense: If your business is unrelated to cycling or sporting activities, I'd probably disallow it. Also, if your expenses were over and beyond what was necessary (i.e. you tried to deduct a $5,000 bike when a $700 bike would do just as good a job), I'd disallow it to the extent of the difference. Also, your expenses have to have a reasonable relationship to your revenues. For example, if your business received $2,000 in revenues, but you tried to deduct a $1,200 bike, I'd probably disallow it.


Originally Posted by CollectiveInk
I know commuters can deduct and/or get tax breaks, but for those of us non commuters......anyone?
edit: this law will be largely ignored by employers and will likely be pretty ineffective. But every little bit helps, I guess.

Last edited by Sprocket Man; 10-22-08 at 04:19 PM.
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Old 10-22-08, 05:05 PM
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If you were a bike courier for example you could probably reasonably deduct your bike related expenses from income. If you had a sideline business as a part time bike courier, who knows...

Hobby expenses: no way.

Medical expenses: maybe if a doctor ordered it. BUT only if you file Schedule A and your bike expenses are more than 7.5% of your AGI. Might be an invitation to an audit though.
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Old 10-22-08, 05:48 PM
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Originally Posted by CollectiveInk
I know commuters can deduct and/or get tax breaks, but for those of us non commuters......anyone?
Not that I've ever heard of.

From the IRS website:

Examples of Expenses You Cannot Deduct

• Commuting expenses. See Pub. 529 for the definition of commuting.
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Old 10-22-08, 06:12 PM
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Originally Posted by deraltekluge
Not that I've ever heard of.

From the IRS website:

Examples of Expenses You Cannot Deduct

• Commuting expenses. See Pub. 529 for the definition of commuting.
A bicycle commuter won't necessarily get the tax break directly, but an employer has the option of subsidizing an employee who commutes by bike up to $20/month towards bicycle related expenses.

"Effective Jan. 1, people who use bicycles as their primary means of getting to work will be eligible to get up to $20 a month in tax-free payments from their employers for the costs of owning and operating a bike. Employers can deduct the payments as an expense from their federal taxes."

https://www.mercurynews.com/breakingnews/ci_10698093

So if an employer doesn't want to implement it (which will probably pertain to >98% of all employers), the bike commuter won't get the tax-free subsidy.
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Old 10-22-08, 06:19 PM
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The only one I'm fairly certain of is if you are a cycle courier, in Canada, in addition to bike expenses, you can deduct $20/day food expenses. ( Fuel )
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Old 10-23-08, 07:52 AM
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If you put an advertising sign on your bike for your business, you could almost certainly deduct the cost of the sign. But deducting the cost of the bike would probably be a hard sell unless the bike was being used for business purposes such as making deliveries to customers.
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Old 10-23-08, 11:22 AM
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Originally Posted by supcom
If you put an advertising sign on your bike for your business, you could almost certainly deduct the cost of the sign. But deducting the cost of the bike would probably be a hard sell unless the bike was being used for business purposes such as making deliveries to customers.
Originally Posted by Sprocket Man
#1 would probably be your best bet. But keep in mind that if audited, the IRS can say these aren't legitimate expenses and disallow them. As a former auditor, here's how I'd evaluate this type of expense: If your business is unrelated to cycling or sporting activities, I'd probably disallow it. Also, if your expenses were over and beyond what was necessary (i.e. you tried to deduct a $5,000 bike when a $700 bike would do just as good a job), I'd disallow it to the extent of the difference. Also, your expenses have to have a reasonable relationship to your revenues. For example, if your business received $2,000 in revenues, but you tried to deduct a $1,200 bike, I'd probably disallow it.
I was thinking in terms of business owner's who wrap their vehicle, whether primary or secondary, advertising their business. Then whether the vehicle is parked in front of the store, or getting groceries it's advertising for them. And then there are vehicles (boats, cars, trailers, etc) that aren't used in the business, but advertise for the business, almost like a permenant moving billboard.

Seeing as how my graphic design firm provides these wraps for many clients, it could be logical for me to "showcase" the uniqueness of vehicle wraps. Also, word of mouth is a big generator of new clients, so being out on a group ride would advertise for me (since I'll be too out of breath to answer "what do you do?" )
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Old 10-23-08, 12:35 PM
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Be creative.

The advertising bike is a big clunker designed to even pull like a two seat passenger bike taxi, or like a two wheel trailer with a billboard visible on both sides. Use this for advetrtising as a display or around town.

The second bike is the backup in case the first one is out of order. Both are "ordinary and necessary". Classify the two expenditures as "advertising" and wait 3 years for the IRS statute of limitation expires. In California, wait 4 years for the State statutes to expire.
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Old 10-11-12, 03:33 PM
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Originally Posted by Sprocket Man
I'm a CPA, so I like these kinds of questions!



#3 is definitely not a legitimate deduction unless your doctor specifically ordered you to ride a bike for rehabilitation (as opposed to general, overall health) purposes. And if this happened (doubtful), you must spend no more than what would be considered "reasonable" under the circumstances.

Regarding #2, hobby expenses can only be deducted to the extent of hobby income. As an example, if you were a part-time bike racer (not a professional cyclist) and won $1,000 in prizes, you can't deduct more than $1,000 in bicycle related expenses. You can never have hobby losses to offset ordinary income.

#1 would probably be your best bet. But keep in mind that if audited, the IRS can say these aren't legitimate expenses and disallow them. As a former auditor, here's how I'd evaluate this type of expense: If your business is unrelated to cycling or sporting activities, I'd probably disallow it. Also, if your expenses were over and beyond what was necessary (i.e. you tried to deduct a $5,000 bike when a $700 bike would do just as good a job), I'd disallow it to the extent of the difference. Also, your expenses have to have a reasonable relationship to your revenues. For example, if your business received $2,000 in revenues, but you tried to deduct a $1,200 bike, I'd probably disallow it.




edit: this law will be largely ignored by employers and will likely be pretty ineffective. But every little bit helps, I guess.
Sorry to revive an old post, but this is a great question...

Sproket Man: I'm new here so I couldn't PM you yet since I haven't posted yet.

As a business expense for advertising, what about a racing team of the same name as the business, with logo'd jerseys and entry fees to rides and races... and bike parts??? How would an auditor look at the owner being the primary member on the team (of one initially)? Say for example, said company (mine) is a dealer for cycling specific prescription eyewear; how far much could be reasonably expensed as advertising in the eyes of an auditor?

Thanks!
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Old 10-11-12, 04:01 PM
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