May is National Bike Month and what better time to share ways biking and other transportation methods may save you money when you’re traveling for work. Phil Taylor of PT Money shares tips on how you can get some of your money back for work-related commuting expenses.
In the fight to keep more of your money in your bank account, it’s always important to stay informed about available tax deductions. Knowledge is power. And in this case, knowledge is also money.
If you drive, fly, bus or bike for work, then you may qualify for tax deductions or reimbursements.
Many different people choose many different means of transportation for work each day. And not just the daily grind, but work-related conferences, business trips, and a long list of other work-related travel. All of this travel has one thing in common…it all cost money.
The good news is, there’s a chance to get some of that money back – in the form of work-related commuting deductions and reimbursements from Uncle Sam.
Many travel expenses for your job may be tax deductible. You may be able to deduct daily business-related commuting expenses as well as business-trip and conference costs. Here’s the basic list of potential deductions:
- Unreimbursed travel expenses by car, train, or plane for work
- Using your vehicle for your job
- Using your vehicle while on your business trip
- Toll costs, mileage, parking fees, and taxis
- Travel to and from hotels and airports
- Other similar travel expenses related to your job
Record-keeping is key. Be sure to keep receipts, mileage logs, and any other documentation that can prove the costs you incurred while on the job.
It’s also important to note that you can’t claim the cost of travel if you are provided with free travel as part of your employment. If you didn’t have to pay for the plane ticket or the rental car, then you can’t deduct it. You also can’t deduct your daily expense of using your own vehicle if you go to your same employer’s office everyday.
Qualified Bicycle Commuting Reimbursement
There is a growing slice of the population these days choosing to ride bikes to work. It saves on gas money and vehicle-maintenance costs, and it helps reduce pollution. It’s great.
And now there’s another incentive to ditch your car and bike to work – financial reimbursement. That’s right, the Qualified Bicycle Commuting Reimbursement.
Here’s how you can get paid to ride your bike to work. Beneath the umbrella of the bicycle commuting reimbursement, your employer can pay you $20 per month if you use your bicycle on a regular basis to get to and from work.
$20 isn’t a fortune, but it’s small enough (in the eyes of the IRS) to be non-taxable. So you don’t have to report it on your income tax. The stipulation is, your bike must be your primary form of travel to and from your job.
You don’t qualify for this tax-free reimbursement if you use your bike for a week and drive or ride the train for the rest of the month. The IRS keyword is “substantial”. You have to use your bike as work transportation for a substantial portion of each month to qualify.
And some good news for your employer, the money they reimburse their biking employees is tax-deductible for the company. Everyone wins, you stay healthy, you help the environment, and you get to keep more money.