Unfortunately, it is hard for self employed people to take the deduction. You have to be an employee, it's an employee fringe benefit kind of thing, from my understanding.

I am also self employed, but through my company, which is a an S corporation. Technically, I am an employee of the corporation. I just happen to own the corporation, and I am its only employee. Owners of S corporations can't take the deduction as an employee.

Tax law. Fun stuff!

But, my friend, if you are using your bike for your self employed work, you should be able to deduct your bike expenses as a business expense. Ordinarily, no one can deduct their commuting expenses. This stipend is an exception. But using your bike to haul packages for work is not a commuting expense. That is a business expense, and it should be deductible.

If you are self employed and use your car for business purposes, you have to keep track of your mileage to take a deduction. If they treat bikes the same, I guess you're gonna have to spring for an odometer for your bike.

Here's a Q+ A from the League of American Bicyclists:
www.bikeleague.org/news/100708faq.php

( www.irs.gov/publications/p15b/index.html )