Can I write off my entire financed bike purchase as a business expense?

Does this still apply if they're using a bicycle? I thought Section 179 was just for vehicles with motors and equipment. Also, wouldn't they need to track mileage like with a car?

Section 179 applies to tangible personal property used for business, which can include bicycles if they're primarily used for business purposes. You're right that vehicles often come to mind first, but the deduction is broader than that. As for tracking, while car owners typically use mileage logs, bicycle users should instead document usage patterns - like keeping a log of client visits, routes taken for business, and establishing a clear pattern of business use versus personal use. Photos of you using the bike for work, maintenance records, and a written policy about business usage can all strengthen your position if you're ever audited.

How does it handle things like partial business use? My situation is similar but I use my bike maybe 75% for business and 25% personal.

Does it actually work with bike purchases specifically? Or are you just talking about general business equipment? The IRS rules for transportation seem different from other business assets.

It handles partial business use really well. You enter the percentage (like your 75% business use), and it automatically calculates the proper deductible amount. It explains that you can only deduct the business portion, so in your case, that would be 75% of the purchase price if you use Section 179. For bikes specifically, yes, it works great with them. The tool treats bicycles used for business transportation as business assets. It helps identify whether your situation qualifies as a legitimate business expense and guides you through the documentation needed to support your deduction. Transportation between client sites definitely counts as business use, which is different from commuting (which isn't deductible).

Wait, how does this work? You pay a service to call the IRS for you? Why wouldn't you just keep calling them yourself?

Sounds like a scam to me. The IRS tells you everything you need to know on their website, and if you need help, that's what tax professionals are for. Why would anyone pay for someone else to make a phone call?

It's not that they call the IRS for you - they use technology to navigate the IRS phone system and hold your place in line. When they're about to connect with an agent, you get notified and jump on the call. I spent literally hours on hold before trying this, getting disconnected or told to call back later because call volume was too high. This isn't about the information being available elsewhere. Sometimes you have specific questions about your situation that aren't clearly addressed in IRS publications. Tax professionals charge hundreds of dollars for consultations, while getting direct answers from the IRS is free once you actually reach them. For complex business deduction questions like with this bike purchase, speaking directly with the IRS gave me peace of mind that I was filing correctly.

That's super helpful advice! Do you think I need to track actual miles biked, or is it enough to just log the client visits and have some kind of map of my regular routes?

Tracking the actual client visits with addresses and dates is the most important part. Having a map of your regular routes is also excellent documentation. While you don't need to track every single mile like you would with a car (since there's no "standard mileage rate" for bikes), I'd recommend using a free app that can record your routes and distances. This gives you solid evidence of your business travel patterns. The key is being able to show the IRS that your claim of 90% business use is reasonable and backed by records, not just a guess.

That doesn't sound right. I work at a tax firm and we've had clients successfully claim Section 179 for bicycles used in business. The key is that it must be primarily used for business (over 50%) and you need good documentation. The IRS doesn't specifically exclude bicycles from Section 179 eligible property.

I think there might be some confusion here. Section 179 applies to tangible personal property used in business, and bicycles can definitely qualify if they meet the business use requirements. The "listed property" designation you're thinking of typically refers to vehicles that could easily be used for personal purposes - like cars, computers, or cell phones - which have special documentation requirements but aren't excluded from Section 179. Your accountant may have been being overly conservative, or perhaps your business use percentage wasn't high enough to qualify. The key is proving that the bike is used more than 50% for business purposes. If you have good records showing business use, you might want to get a second opinion on this.

This is really helpful clarification! I had no idea that financing changed the timing of when you can take the deduction. So if I understand correctly, even though I'd be placing the bike "in service" right away, I can only deduct what I've actually paid out of pocket by December 31st? That definitely changes my math - I was planning to put down about $800 and finance the rest, so I'd only be able to deduct 90% of that $800 this year (around $720). The remaining payments would be deductible as I make them in 2024 and 2025. Do you know if there's any advantage to making a larger down payment to get more of the deduction this year, or does it not really matter tax-wise as long as I get the full deduction eventually?

Great question! The timing of your deduction depends on your cash flow situation and tax planning strategy. If you're having a particularly high-income year (like you mentioned with your busy summer season), making a larger down payment to maximize this year's deduction could help offset more of that income at your current tax rate. However, if you expect to be in a higher tax bracket in future years, it might actually be better to spread the deductions out. The tax savings are the same dollar-for-dollar regardless of when you claim them, assuming your tax rate stays constant. One thing to consider: if your business income varies significantly year to year, having the flexibility to claim larger deductions in high-income years can be valuable. But don't stretch your cash flow just for the tax benefit - the financing terms and your business needs should be the primary factors in your decision. Also remember that with Section 179, you need sufficient business income to claim the full deduction, so make sure your business profits can support whatever deduction amount you're planning to take.

This is excellent advice about the business income limitation! I hadn't thought about that constraint. Since my income has been way up this summer with pet sitting, I should be fine, but it's definitely something to calculate before making the purchase. Your point about being conservative with the business use percentage is really smart too. I was thinking 90% because I mostly bike between clients, but you're right that I do sometimes use it for personal errands or weekend rides. Maybe I should track my actual usage for a week or two before the purchase to get a more accurate baseline - something like 80-85% might be more realistic and defensible. Thanks for the reality check on documentation and audit risk. Better to be conservative and sleep well at night than to be aggressive and worry about it later!

This is incredibly detailed and helpful information! I'm definitely on cash basis accounting since I'm just a small operation, so that confirms I can only deduct what I actually pay out this year. The five-year lookback rule is something I hadn't considered at all - that's a really important point about potential recapture if I stop using the bike for business. Given that I'm already replacing a worn-out bike after "years of use," I should definitely factor in realistic expectations about durability, especially with a professional-grade bike that should hopefully last longer than my current one. I love the suggestion about using a mileage tracking app for the first few months to establish a pattern. Even though there's no standard mileage rate for bikes, having that data would create a solid foundation for my business use percentage claim. Do you have any recommendations for apps that work well for bicycle tracking, or would any general fitness/route tracking app be sufficient for tax documentation purposes? Also, just to make sure I understand correctly - if I make an $800 down payment and claim 85% business use, I could deduct $680 this year, then continue deducting 85% of each subsequent payment as I make them in 2024 and 2025?