chas58

The previous tax break is dead, long live the new tax break.

"bike commuters will get to write off up to $53 in monthly expenses, thanks to a new tax bill introduced in the House this week."

I think they missed the part that the bill has been "introduced," but not yet passed. A rather significant distinction.

The old tax break, which "Republicans ended just last year, was structured differently, as a reimbursement and was limited to $20 a month." As I recall, that also required your employer to participate - which made it worthless for many of us.

I would take the money and run (well, bike actually) if it was actually made available to normal people and not hidden under red tape and requirements that most of us bike commuters can not meet.

Source:
https://usa.streetsblog.org/2019/03/...ike-commuters/
https://www.fastcompany.com/90317511...rs-a-tax-break

mcours2006

Giving financial incentive is one way to get more people onto bikes. Giving financial disincentive to drive is another.

clengman

I've read the two articles and the text of the bill. I'm having a hard time figuring out for sure how they want this to be implemented. Seems like you would still have to do it as a reimbursement through your employer. So, first your employer has to agree to participate, then you have provide them with receipts for all your bike-related purchases and then you get 20% of those costs back in your paycheck?

acidfast7

We have this:

https://www.bike2workscheme.co.uk/

I don't spend enough to make it really worth it.

chas58

@clengman Good question, I'm not sure. The old bill was like that - and thus was worthless unless your employee benefits specifically included that. I hope this on is not like that...

RubeRad

Interesting. I'll be keeping cycling-related receipts this year, I'm not sure I could actually reach a full $636 to deduct as I don't plan to buy any bikes this year, just regular maintenance. Pair of tires will probably be the biggest expense this year.

noglider 

There was recently a discussion on cost per mile of a bike. I don't remember which section it was in, maybe this one. Figures were all over the place because there are so many ways to calculate. Can we depreciate our purchases? That would help.

acidfast7

It was in general cycling an it ranged from 0.02 to 20c/mi.

RubeRad

Here's the link: https://www.bikeforums.net/general-c...-per-mile.html

DiabloScott

My old employer provided the old plan and I received the benefit nearly every month. I never had to provide a receipt although per the fed rule I was supposed to.
Out of probably 1200 employees nationally there were only a few who got the benefit regularly.
Under the old rule, the monthly benefit didn't require a monthly expenditure - just an annual justification. It could even be bike clothes, lights, or energy bars.

If the new plan is a tax credit that would be easy - and wouldn't require itemizing; which is important because the new tax law puts a lot more people into the standard deduction.

clengman

Definitiely, if they want people to actually be able to use it, a tax credit is the way to go.

bakerjw

A lot of the problem is that many dopn't have enough deductions to itemize. My son is virtually debt free and commutes but has to take the standard deduction.

noglider 

At my most recent job, if I remember right, I had a choice between being reimbursed for mass transit or for bike commuting. Even though I commuted by bike far more frequently, I incurred more costs on mass transit, so I took that benefit.

RonE

The company that I work for decided not to participate in the previous tax credit (and probably will not participate in any new tax credit) because they would have to pay a third party to manage the plan for them. Interestingly, our health insurance currently pays $20 if you go to the gym 12 times a month, but the insurance company will not reimburse anything for bicycling more often.

So, I have to revel in how much I save by bicycling compared to driving my car. I keep a spreadsheet that tracks the miles that I commute by bike and it uses the cost of gasoline and miles per gallon for my car, as well as the maintenance, repair and tire costs per AAA to compute my savings. The net result is that my bicycle commuting saves me approximately $0.15 per mile in car costs, not counting tolls. In my case, that corresponds to a couple of tuneups and a set of tires for my bike and a lot fewer miles on my car.

C9H13N 

So you believe only wealthy people should drive. Got it.

CliffordK

Does this mean one can call oneself a "Pro" if one is getting paid?

mcours2006

Strawman much?

Darth Lefty 

I checked with my employer about the old benefit. They didn't offer it. It's not like a big city here. It's the burbs. Bike and transit are both available but clearly everything is set up for cars.

DiabloScott

It was a federal program that didn't cost employers anything except for the admin time to process it. The employer got a tax credit to equal the amount they paid out. It was just added to my check and it showed up in my paystub as a "negative deduction" in the area where they showed deductions for long-term disability and 401k and such.



I don't think anyone rode their bikes because of this benefit, but it was pretty nice.
Offering people a choice of transit dollars or bike store gift cards does make some business sense in lots of communities.

Skipjacks

My office has about 50 people.

I am the only one who bikes to work.

There are maybe 3 other people in the office who live close enough that they even COULD bike to work regularly. None of them ever would.

These things just aren't realistic when you make the employer be involved. My company isn't going to spend the resources needed to set all this up so 1 person can use it.

RubeRad

What some others are saying is that it's a tax credit, not an exemption. So (like the child tax credit), whether you use the standard or itemized deductions, you first compute your total tax, then subtract how much tax was withheld, and also subtract any tax credits.

DiabloScott

We're saying a credit would be better - what the bill appears to propose is to allow employers to provide the pre-tax benefit for bikes as they do for mass transit. It's still an employer administered benefit that shows up in your paycheck, but it wouldn't require itemizing deductions on your taxes.

https://blumenauer.house.gov/sites/b...0of%202019.pdf

It's pretty simple language, although it references a bunch of other tax code numbers.