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USA bike-commute tax break

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  • Tone
    I image this may have been brought up before, but a post on another bike forum I am on reminded me of it, and I thought I would bring it up on RootsRadical.
    Message 1 of 7 , Apr 13, 2010
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      I image this may have been brought up before, but a post on another bike
      forum I am on reminded me of it, and I thought I would bring it up on
      RootsRadical. Even if it was discussed here before, I know we have new
      members, who might like to know about it.

      According to this web page:
      http://finance.yahoo.com/news/7-new-tax-laws-to-brn-502875043.html?x=0

      It says (word-for-word copy-and-paste to save you the link-trip:
      "6. Biking tax break
      Last year bicycling commuters were included in the tax code section that
      allows for employer reimbursement of workplace transportation costs.
      Thanks to the Bicycle Commuter Act, cyclists now get some of the same type
      of tax-free fringe benefits as do their motoring co-workers. If a company
      provides the benefit, which is $20 per month, a worker can put into a
      special tax-favored account, bicycle commuters can use that money to help
      defray such costs as the purchase of a bicycle, bike lock, helmet, bike
      parking fees, shower facilities and general bike maintenance."

      Ride safe... and save,
      _TONE_
    • Dave Lloyd
      It s a start, but it also depends on your company financing this as a benefit. I believe that this is actually an extension of the Qualified Transportation
      Message 2 of 7 , Apr 13, 2010
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        It's a start, but it also depends on your company financing this as a benefit. I believe that this is actually an extension of the Qualified Transportation Benefit (QTB), which works a bit like a health spending account.

        Some companies provide parking and public transit benefits (e.g., they will pay part or all of your parking or transit costs). This allows companies to offer the same benefit to bike commuters but in the form of a rebate to the bike commuter for purchasing bike commuting related supplies, paying for facilities, etc. This does have some tax advantages for the business as well as I believe it lets the business reduce its tax liability (talk to an accounting first, please).  All that said, it depends on your company willing to fork over up to $240/year for a bike commuter.  That may make sense if that person doesn't get a "free" parking space if the company pays for, but for many of us that work where parking is "free" on a surface lot around the office building, there's no economic incentive to provide this benefit to employees.  Add in the craptacular economy, and unless you work for somplace like REI, Planet Bike or QBP, your chances of receiving this benefit aren't too good.

        Some other companies also allow employees to pay money into a pre-tax account that works somewhat like a health spending account to buy transit passes.  What I'd like to see is an extension to this to allow me to contribute to an employee funded account, just like my health spending account, where I could use pre tax dollars to buy qualified bike commuting gear.  There would be some administrative cost to the company for this, but it would likely be minimal as most companies already pay this cost as a part of offering HSA and other flex spending accounts to their employees.

        --dlloyd



        On Tue, Apr 13, 2010 at 09:13, Tone <tone@...> wrote:
         

        I image this may have been brought up before, but a post on another bike
        forum I am on reminded me of it, and I thought I would bring it up on
        RootsRadical. Even if it was discussed here before, I know we have new
        members, who might like to know about it.

        According to this web page:
        http://finance.yahoo.com/news/7-new-tax-laws-to-brn-502875043.html?x=0

        It says (word-for-word copy-and-paste to save you the link-trip:
        "6. Biking tax break
        Last year bicycling commuters were included in the tax code section that
        allows for employer reimbursement of workplace transportation costs.
        Thanks to the Bicycle Commuter Act, cyclists now get some of the same type
        of tax-free fringe benefits as do their motoring co-workers. If a company
        provides the benefit, which is $20 per month, a worker can put into a
        special tax-favored account, bicycle commuters can use that money to help
        defray such costs as the purchase of a bicycle, bike lock, helmet, bike
        parking fees, shower facilities and general bike maintenance."

        Ride safe... and save,
        _TONE_


      • Pete Beers
        Thanks Tone. Getting employers to implement this is sometimes difficult though. I work for a large company and they have a lot of HR initiatives that they
        Message 3 of 7 , Apr 13, 2010
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          Thanks Tone.  Getting employers to implement this is sometimes difficult though.  I work for a large company and they have a lot of HR initiatives that they need to chase down.  Implementing a program like this is not easy for them and the relative benefit is pretty small.  I'm one of the only people who would take advantage of it.  Basically it is set up so that you're only able to receive the $20/month if you receive no other transportation benefit.  In our company, Metrochecks pay out $70-80/month for employees to ride metro.  Paid Parking by the company is $340/month.  Few employees are going to forgo those benefits for the $20/month that this provision gives.  I'm pretty much the only person in the office that rides every day all year.

          On Tue, Apr 13, 2010 at 10:13 AM, Tone <tone@...> wrote:
           

          I image this may have been brought up before, but a post on another bike
          forum I am on reminded me of it, and I thought I would bring it up on
          RootsRadical. Even if it was discussed here before, I know we have new
          members, who might like to know about it.

          According to this web page:
          http://finance.yahoo.com/news/7-new-tax-laws-to-brn-502875043.html?x=0

          It says (word-for-word copy-and-paste to save you the link-trip:
          "6. Biking tax break
          Last year bicycling commuters were included in the tax code section that
          allows for employer reimbursement of workplace transportation costs.
          Thanks to the Bicycle Commuter Act, cyclists now get some of the same type
          of tax-free fringe benefits as do their motoring co-workers. If a company
          provides the benefit, which is $20 per month, a worker can put into a
          special tax-favored account, bicycle commuters can use that money to help
          defray such costs as the purchase of a bicycle, bike lock, helmet, bike
          parking fees, shower facilities and general bike maintenance."

          Ride safe... and save,
          _TONE_


        • Steve Lange
          ... ^^^ This, a thousand times this. And why stop with employers... why not offer a federal and state tax break to bicycle life-stylers ? We create much
          Message 4 of 7 , Apr 13, 2010
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            On Tue, Apr 13, 2010 at 7:53 AM, Dave Lloyd <dave@...> wrote:

            Some other companies also allow employees to pay money into a pre-tax account that works somewhat like a health spending account to buy transit passes.  What I'd like to see is an extension to this to allow me to contribute to an employee funded account, just like my health spending account, where I could use pre tax dollars to buy qualified bike commuting gear. 

            ^^^ This, a thousand times this. And why stop with employers... why not offer a federal and state tax break to bicycle "life-stylers" ?  We create much less wear & tear on infrastructure, good for traffic, the natural environment, stimulate the economy with our bike passion, etc. Would be nice to be able to save up taxfree bike bucks, that's for sure.

            Steve Lange
            Santa Barbara, CA
          • Kate and Rob Hanson
            What Pete said below. It should have been written to let commuters combine benefits into a multi-modal commuting tax break, or even one that is a
            Message 5 of 7 , Apr 13, 2010
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              What Pete said below.  It should have been written to let commuters combine benefits into a multi-modal commuting tax break, or even one that is a multi-modal-except-personal-auto commuting tax break.  There's no way I'd give up the pre-tax Metro benefit at $60+ a month for a $20 a month benefit if I have to choose, because I don't ride every day all year.  But if I could combine them up to a limit of say $100/mo, that would work, because I hate to ride in the rain almost as much as I hate to drive my car to work, so if it's raining, I'm taking public transportation.



              Posted by: "Pete Beers" pete.beers@...   pedrogringo

              Tue Apr 13, 2010 8:07 am (PDT)



              Thanks Tone. Getting employers to implement this is sometimes difficult
              though. I work for a large company and they have a lot of HR initiatives
              that they need to chase down. Implementing a program like this is not easy
              for them and the relative benefit is pretty small. I'm one of the only
              people who would take advantage of it. Basically it is set up so that
              you're only able to receive the $20/month if you receive no other
              transportation benefit. In our company, Metrochecks pay out $70-80/month
              for employees to ride metro. Paid Parking by the company is $340/month.
              Few employees are going to forgo those benefits for the $20/month that this
              provision gives. I'm pretty much the only person in the office that rides
              every day all year.
            • Tone
              In an ideal world/country bicyclists could simply write-off their commuting-related bicycle expenses when they do their taxes. I was only able to write-off
              Message 6 of 7 , Apr 13, 2010
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                In an ideal world/country bicyclists could simply write-off their
                commuting-related bicycle expenses when they do their taxes. I was only
                able to write-off bike expenses when I worked as a messenger, and even
                then I was only able to do so when filing as an independent contractor
                rather than an employee. Usually to boost my write-off I would use any
                money I would get for Xmas and buy/order a bunch of bike related
                equipment during the after-Christmas sales in the week before the New
                Year hit. That was an ideal time to do it because it was out of season,
                prices were incredibly low, I usually had extra cash, and it was right at
                the end of my fiscal year.

                One of the reasons I presume bikers are not given as much tax
                incentive/deductions or much overall consideration by our government, is
                because they are a relatively low-cost item for most people when compared
                to big-ticket items such as cars. Furthermore, the vast majority of
                people in America drive rather than bike on a regular basis, so
                politicians are not pushed to lean to “green”, green as in the
                eco-friendly bike solution. Instead politicians are persuaded much more
                by the other “green” because so much more money is involved.
                Think about it, first the car costs way more than a bike does, so less
                can be taxed. Secondly, bikes do not need gas, so that is another
                non-taxable factor with bikes. Thirdly, car parts are way more expensive
                than bike parts both because of size and complexity, which is another
                thing that can be taxed. Fourth, in even a small town there is a massive
                support structure of workers in the auto industry, such as mechanics,
                washers, attendants, etc. when compared to your local bike shop, which
                might have half a dozen people employed… so government funds generated by
                income taxes are way less. Additionally, because more people drive and
                automobiles do much more damage to roadways… you have extended industries
                and jobs dedicated to their upkeep like repair crews, highway
                contractors, and even toll-takers, which are a direct method for taxing
                cars. And do not forget parking meters and parking lots, which also
                generate money, which can be taxed.
                Politics is big business, so unless money can talk loudly for bicycles…
                then sadly it is very unlikely the government will dedicate funds,
                resources, and tax incentives for cyclists.

                Of course one can argue that active cyclists improve their own health and
                thus reduce the strain on health care, but as always the USA government
                rarely drives itself and its money toward preventative methods, but
                instead listens to businesses and corporations, who already have money to
                protect their own interests. In time hopefully consumers will vote for
                what they want simply by buying into businesses selling worthwhile
                products.

                I bike to my local voting center, do you?
                Ride safe,
                _TONE_
              • Pete Beers
                I ride everywhere. Quite honestly, I would much rather have the government focus on incentives to have localities include bicycles in their transportation
                Message 7 of 7 , Apr 14, 2010
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                  I ride everywhere.  Quite honestly, I would much rather have the government focus on incentives to have localities include bicycles in their transportation plans.  $20/month with all the restrictions and other issues involved really isn't an incentive.  It is cute and symbolic.  I guess that is something.

                  Interesting for me, it took EPA in DC over a year to make this incentive available to their employees that ride to work every day. 

                  Love,

                  Pete



                  On Tue, Apr 13, 2010 at 7:43 PM, Tone <tone@...> wrote:

                  I bike to my local voting center, do you?
                  Ride safe,
                  _TONE_


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