Saving (A Little Less) Money by Biking to Work

Congress took aim at a niche tax break for cyclists. But you can still come out ahead.

The new tax law passed late in 2017 included an odd provision: raising taxes on people who bike to work.

Here's how that works: Since 2009, employers have been allowed to reimburse employees who commute by bike up to $20 a month, tax-free, for the cost of a bicycle and accessories, plus some other related expense.

But now, that $240 is taxable income to the employee. So the value of the benefit is reduced by as much as 37%, depending on your tax bracket. Roughly 60,000 bike commuters will be affected, according to figures by the League of American Cyclists. Bicycling advocates are unsure why the tax treatment of the employee benefit was altered. The net benefit to the U.S. Treasury from will add up to only about $5 million, the League estimates.

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While the tax hike on cyclists may cast a bit of a shadow over this year's Bike Month, keep in mind that bicycling remains a dirt-cheap way to get to work. Not to mention the health benefits. If you're currently commuting by car, our calculator will help you put a hard dollar figure on the savings available to you by trading four wheels for two. Plug in your numbers to see.

TRY IT: Bike to Work Savings Calculator

David Muhlbaum
Senior Online Editor, Kiplinger.com

In his current role as Senior Online Editor, David edits and writes a wide range of content for Kiplinger.com. With more than 20 years of experience with Kiplinger, he has worked on and written for a range of its publications, including The Kiplinger Letter and Kiplinger’s Personal Finance magazine. He is a co-host of Your Money's Worth, Kiplinger's podcast and has helped develop the Economic Forecasts feature.