One common tax myth is the belief that you can deduct the cost of commuting by bicycle. This misconception can lead to incorrect deductions and potential issues with the IRS. Here's what you need to know to stay compliant and avoid these pitfalls.

Origin of the Myth

• Commuting Expense Confusion: Many people assume that all commuting expenses, including those for environmentally friendly options like bicycling, are deductible.

• Lack of Clarity: There's often confusion about which commuting expenses qualify for tax deductions.

Reality of Deducting Bicycle Commuting Costs

• Personal Expenses: The IRS generally considers the cost of commuting to work by any means, including by bicycle, to be a personal expense, which is not deductible.

• Employer Reimbursement: Although employers can provide a reimbursement for bicycle commuting expenses, this benefit is not currently tax-deductible under federal tax law.

IRS Guidelines on Commuting Deductions

• Non-Deductible Personal Commuting: Regular commuting expenses to and from work are considered personal and non-deductible.

• Qualified Bicycle Commuting Reimbursement: While the Bicycle Commuter Act allowed employers to reimburse up to $20 per month for bicycle commuting expenses, this benefit was suspended under the Tax Cuts and Jobs Act (TCJA) from 2018 through 2025 and is not currently deductible.

Why the Myth Persists

• General Misconceptions: Many taxpayers believe that all environmentally friendly commuting expenses should be deductible.

• Anecdotal Advice: Misleading information and anecdotal advice from non-professional sources perpetuate the myth.

Avoiding the Pitfall

• Know What’s Deductible: Clearly understand the rules for deducting commuting expenses.

• Non-Deductible: Costs of commuting to and from work by bicycle or any other means.

• Potential Employer Benefits: Check if your employer offers any non-taxable benefits for bicycle commuting, although they are not currently deductible.

What You Can Deduct

• Business Travel: If you use a bicycle for travel between business locations during the workday, those expenses may be deductible as business travel.

• Home Office Commute: If you have a home office that qualifies under IRS rules, travel from your home office to other work locations may be deductible.

Consulting a Tax Professional

• Seek Professional Advice: Given the complexities of tax laws, consulting a tax professional can ensure that you are correctly identifying and claiming eligible deductions.

• Accurate Records: A professional can help you maintain proper documentation and calculate the correct deductions for any business-related travel expenses.