Can I Claim Miles and Expenses Using My Bicycle, eBike, Scooter or Motorcycle?

The good news is, you can save a TON of money using your bicycle, scooter, your eBike or your Motorcycle while delivering for gig companies like Grubhub, Doordash, Postmates and Uber Eats or for courier or bike messenger work.

The bad news is, you can't take the same kind of deductions.

It would be awesome to claim the 56 cents a mile (2021, or 58.5¢ in 2022) when your favorite two wheel mode of transportation is so much less expensive to operate than a car.

Unfortunately, the IRS only allows the standard mileage deduction on passenger vehicles, certain other trucks and four wheel vehicles.

Using your e-bike or scooter might be cheaper, but it's not without cost. It doesn't seem fair that you can't claim miles, does it?

While you can't claim a per-mile amount like you can with your car, you can claim the actual expenses related to the use of your bike, e-bike, motorcycle or scooter. We'll talk about how to do that.

How to claim expenses on your motorcycle, scooter, bicycle or eBike when using it for delivery.

I would suggest three steps for claiming your expenses for your bicycle, motorcycle, eBike or motorized scooter.

1. Determine the business percentage of the use of your vehicle
2. Track everything.
3. Understand depreciation.

1. Determining the business percentage of the use of your bicycle, eBike, motorcycle or scooter.

The IRS makes an allowance for items that have both business and personal uses. Common examples might include your car, cell phone, and computer. Your bike or scooter may fit into that category.

For such an item, you need to determine how much of that use is for business. HOW you determine that can vary.

100% use of an item

If an item is used 100% for business, that makes things much easier. You do need to be able to make a plausible case that the item is not used at all personally. You can more easily claim a cell phone if you have another phone for personal use.

If you are part of the bicycle community, you may be familiar with the term N+1. There's a fun site called the Velominati, the keepers of the rules of cycling etiquette. I haven't figured out yet if it's tongue in cheek, satire, or if they are really serious. Maybe it's a bit of everything. Rule #12 is as follows:

 The correct number of bikes to own is n+1.While the minimum number of bikes one should own is three, the correct number is n+1, where n is the number of bikes currently owned. This equation may also be re-written as s-1, where s is the number of bikes owned that would result in separation from your partner.

Rule #12, The Velominati

I think it's easier with bikes than anything else to have a bike dedicated to delivery work. Especially where you do have more than one bicycle. At that point, you would track all of your expenses related to that particular bike.

Using odometer readings or miles

If you do use your bike, scooter, eBike or motorcycle for both business and pleasure, you will want to find a way to determine what percentage of the use is for business. The most common form of doing so is to track miles.

Most motorcycles, motorized scooters, and a lot of eBikes will have odometers. Some people will equip their bicycles with odometers as well. In this instance, you can record what the miles were at the start of the year (or when you started delivering) and the end of the year. That allows you to calculate total miles.

Then, you need to keep a log just like you would for a car. The best way is probably to record the odometer readings at the start and end of your business trip.

You can use GPS apps such as Mile IQ or Stride, or fitness based apps like Strava or Garmin. I think this works better if you have an odometer to track your TOTAL miles, and that way you can track your business use via GPS. It's a little harder to use GPS to try to track total miles, just because you have to remember to record EVERYTHING you do.

The biggest challenge I've had when tracking my cycling miles is, it's too easy to forget to turn the GPS off when I load it up on the back of my car or hop on the light rail with my bike. The problem with that is, if it records as personal use, that can reduce the percentage that you can claim for business.

Keeping a time log.

Something that might be easier logistically would be to log the time that you use your bicycle, eBike, scooter or motorcycle. Every time you ride, for personal or for business, record how much time you spent doing so. Then divide your total business time by total hours to get your business percentage.

2. Track everything.

You need to record every related expense. Track it well. Keep receipts. You can claim the business percentage of these items (so if you use it 80% for business, you can claim 80% of the cost).Some of the items you might be tracking as part of the business use of your bike, scooter, motorcycle or eBike would include:

• Repairs and maintenance. That includes replacement parts, any service being done, repairs of flats, etc.
• Rental or lease costs. Last year, I rented an eBike for a day to try out on delivery, just to get a feel for if it's a good idea. 100% of that use was for business. There are lease programs for bikes and scooters being used in delivery. Even if you rented a Lime scooter or a Jump eBike to get you around a congested area and the use of that rental was exclusively for business, you can claim that expense.
• Fuel and operating expenses. If you are using a motorcycle or gas powered scooter, you'll want to track those costs.
• Insurance. If you have an insurance policy for your vehicle, you would track that cost.
• Taxes. Some of the larger two wheeled vehicles might have property taxes.
• Registration. If the local laws require you to register your bike, ebike, scooter or motorcycle, those costs would count.
• Interest. If you financed the vehicle, the business portion of the interest is deductible.
• Special items needed to use the vehicle. Helmets. Bike gloves or bike shoes. Anything needed for the use of the bicycle, scooter or motorcycle that would not be common to use otherwise.

Where do you record all this?

There's not a lot of definitive information out there about recording bicycle, scooter or motorcycle expenses on a schedule C. The IRS doesn't really go into detail. I see two schools of thought:

• Track everything as part of an overall cost of operating the item, and then record the business percentage under Line 27 (Other) – possibly using a description like “Business use of bicycle.”
• Record the individual items under the applicable lines in Schedule C. For example:
  • Rent or Lease – Line 20
  • Repairs and Maintenance – Line 21
  • Interest Expenses – Line 16
  • Insurance – Line 15
  • Supplies – Line 22
  • Taxes and Licenses – Line 23

3. Understand Depreciation

Your use of your bike, ebike, scooter or motorcycle will play a role in decreasing its value. You want to track that depreciation and claim it appropriately.

Establish the value of the item.

How much is it worth?

If you started delivery this year but have had the bike or scooter or motorcycle, that's different than if you purchase the item this year. If you just purchased it, that makes it easier, you have the purchase price (plus sales tax).

You want to establish a market value if the item has been in use. You can use some resurces like Bicycle Blue Book or other pricing guides. Possibly search for similar items for sale in market places (craigslist, Facebook market place, etc).

Identify how long you expect it to be in use

Five years is the accepted useful life for a car. It's pretty standard for a lot of other items as well. If you have an older beater and you think you can only get 3 years out of it, there's your answer.

Divide your value by the useful life.

I have a Surly Disc Trucker that's three years old. I'm seeing similar bikes listed for about $1200. Say I think it's got 5 years useful life left. $1200 over 5 years is $240. So for five years, I can depreciate it at $240 per year. If half my riding is for business, then I could claim $120 in depreciation.

Two options to write off the total purchase of your bike, scooter or motorcycle.

The IRS lets you write off the total purchase price of a lot of depreciable items in the year that you bought it. For example, say I bought an eBike for $4,000 and 80% of my use is for delivery. I could write off the entire bike this year and claim $3,200 (80%) of that purchase price under section 179.

If the you purchase a bike, motorcycle, scooter or e-Bike for less than $2,500, you may claim the business percent of the purchase elsewhere on Schedule C, such as supplies or as a line item under Other Expenses. The IRS calls this a de minimis safe harbor election.

The de minimis safe harbor option makes it easier to claim property that is lower than $2,500 without all the complexities of depreciation.

There are forms involved for both options. Understand that if you completely write off the purchase, you cannot claim depreciation later.

Also understand that if you sell your bike after writing off the purchase price as a business expense, you may have to claim that sale as income.

For all of these, it's better to consult with a tax professional to see how all of this works with your personal tax situation.

Using a bike, eBike, Motorcycle or Scooter does cost you.

Even a bicycle costs money to operate.

Typically that cost isn't as high as the 56 cents per mile (2021) the IRS lets you write off for using your car.

However, you might be surprised how much it adds up to once you add everything up. Track everything related to the cost of using that item. Know what percent of the time you use it for your delivery for Grubhub, Postmates, Doordash, Uber Eats, or any messenger or other delivery platform.

It's kind of a bummer that you can't write off a mileage amount for your bike, e-bike, scooter or motorcycle..

The flip side is, it's usually so much cheaper to use a bicycle, an eBike, scooter or motorcycle than to drive a car. The important thing here isn't how much you pay in taxes, but it's how much is left over after expenses and taxes.

The tax deduction might seem smaller. However, the actual expense is much lower. That means using a lower cost means of transportation may still be the better way to go.

With all that said, keep good records and you can still offset your taxes by what it costs to operate your two wheel vehicle.