No, you cannot deduct expenses accrued from cycling as a hobby in the United States. Since hobbies are not businesses, you are not allowed to take tax deductions to which business people are entitled. Note that the IRS considers a hobby as something you do for fun without expecting to earn a profit from it.
You engage in it irrespective of whether or not it does generate any income. You can only deduct your cycling expenses if it is no longer a hobby but a business. If you can treat your cycling hobby as a business, then you can claim your expenses on Schedule C, the tax form used to calculate net taxable income for sole proprietors, independent contractors, and some business owners.
If you intend to engage in cycling as a hobby and still want to be able to deduct your expenses, you will be expected to take certain steps to convert that activity into a business. According to the IRS, a “business” is an activity you engage in to earn a profit.
You can love doing it, but then the fun is not your primary motivation, profit is. You won’t even have to earn a profit every year—or even for many years—but making a profit will have to be the primary intention you indulge in the activity.
You will have to work regularly at the activity and carry it on in a businesslike manner by keeping good records, having a business plan, and obtaining expertise in the activity. Have it in mind that the federal tax code that gave taxpayers the leverage to take a hobby tax deduction for their costs, the Tax Cuts and Jobs Act (TCJA), was duly changed in 2018.
The fact that you can’t deduct your expenses doesn’t mean you shouldn’t continue to earn money from a hobby, but you will have to consider minimizing your expenses. However, you can earn from cycling via the Qualified Bicycle Commuting Reimbursement. Under the Qualified Bicycle Commuting Reimbursement scheme, you can get paid to ride your bike to work.
Note that within the umbrella of the bicycle commuting reimbursement, your employer can pay you $20 per month if you use your bicycle at regular intervals to get to and from work. While $20 may not be much, it is still small enough (in the eyes of the IRS) to be non-taxable.
Therefore, you won’t be expected to report it on your income tax. To qualify for this reimbursement under the Qualified Bicycle Commuting Reimbursement scheme, your bike will need to be your primary form of travel to and from your job.
Note that you are not eligible for this tax-free reimbursement if you use your bike for a few days and drive or ride the train for the rest of the month. According to the IRS, you will have to use your bicycle as work transportation for a substantial portion of each month to qualify.
Creative Ways to Convert Your Passion for Cycling into a Business
Note that you can’t just hit up the IRS to say, “Hello, I have successfully turned my cycling hobby into a business,” and be done with it. Your activities will need to buttress your goal. You need to show the IRS that you are genuinely using your bicycle to run a business.
Have it in mind that the IRS considers numerous factors when differentiating businesses from hobbies. Nonetheless, here are creative ways to convert your passion for cycling into a business.
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Open A Bike Shop
This is, without doubt, one of the most visible businesses to invest in as a cycling enthusiast. Truth be told, starting a bike shop can be quite expensive. However, if you start small, and leverage some innovative ideas, you can grow it into something massive.
Aside from investing in a brick-and-mortar shop, you can consider selling products online that appeal to bike enthusiasts. You can leverage online marketplaces like Etsy and eBay to market and sell your products.
Advertise on Your Bike
This is another valid way to turn your passion into a business and also make some cool cash along the way. Note that you can partner with Ridevert to display ads on your bicycle. This side hustle app tends to track how many miles you ride each day to calculate your pay.
According to reports, you can earn up to $280 per month; however, you will need to be at least 18 years old to join. Once you download the app, Ridevert analyzes your daily route and starts matching you with brands.
Build A Website
You can leverage your love for cycling to make good money by building a niche website on the subject. All you need to start is a domain name which will cost around $10 – $15 per year and a content management system such as WordPress, which can be free to use.
Have in mind that your primary expense for this bike-centric website will be hosting, and that cost can be as cheap as $25 a month. Once your website can boast of a significant amount of high-quality articles, you can start to place pay-per-click (PPC) advertising on your site with Google Adsense.
You can also align with bicycle accessories companies to promote their goods or services for a commission, or even serve as an affiliate where you get a percentage of every sale initiated from your website. When done correctly, you can attract massive traffic to your site and also make good money.
Deliver Meals
Making food deliveries remains a very viable way to turn your cycling hobby into a business and also earn cash. In recent times, platforms such as Uber Eats and DoorDash have made it possible to earn cash with your bicycle by making deliveries from local restaurants to customers.
One very notable benefit of these apps is that they let you create your schedule and also receive weekly payments. DoorDash drivers are known to earn as much as $23 per hour while delivering food. These apps are available in 5,000+ towns across the nation, but not every city allows bikes or scooters.
Become a Bicycle Tour Guide
This is another way to get paid for riding bicycles. If you are conversant with bike back roads or long-distance bike trails, you can sell your services to people who are looking for an experienced bicycle tour guide. Aside from making good money by showing tourists the hottest spots for biking, you can also have an exciting time making friends and doing what you love.
There are numerous ways to supplement your tour guide endeavors. You can sell certain bike gear such as travel packs, saddle bags, water bottles, and other things that any long-distance bicyclist may need.
Conclusion
Indeed, the TCJA has eliminated the itemized deduction for hobby expenses, coupled with all other assorted itemized deductions. The prohibition on deducting these expenses went into effect in 2018 and continues through 2025.
This simply entails that you can deduct any expenses you earn from your cycling hobby during these years, but will still be expected to report and pay tax on any income you earn from cycling. Although the deduction is expected to return in 2026, consider the options noted above if you are looking for ways to convert your passion for cycling into a business.
