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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: sheepstache on January 22, 2013, 08:42:49 PM

Title: tax-deductible mass transit expenses--something to play around with?
Post by: sheepstache on January 22, 2013, 08:42:49 PM
My workplace allows you to get, direct-deposited to your bank account a pre-tax reimbursement for mass transit expenses.  Anyone have any experience with this?  The amount I spend per month varies and I'm wondering what the consequences are if you find that at the end of the year you've underspent what you requested.  I mean, it's not like an HSA where it's use-it-or-lose-it, particularly since it just gets deposited to your bank account, so I guess I mean regulations-wise.

 In case anyone else has a similar program know that the amount you can put down doubled due to recent legislation, from $120 to $245, plus, you can put down another $245 for parking.

ps. apparently there's a related program to compensate you for bike commuting expenses up to $20/month.
Title: Re: tax-deductible mass transit expenses--something to play around with?
Post by: mlipps on January 23, 2013, 09:36:56 AM
I've done this, but not in the way you're describing. When I worked in DC, my employer sent a check directly to the Metro to be deposited to my SmartCard.

Here in Chicago, you can do the same (although I'm not so trusting of the CTA and rarely take the train, so I haven't bothered) or get checks to pay for Metra (commuter train) fares.

Anddddd now I'm salty because my Metro fares were well above the tax deductible amounts when I lived in DC. No fair.
Title: Re: tax-deductible mass transit expenses--something to play around with?
Post by: tooqk4u22 on January 23, 2013, 09:39:42 AM
Mine gets deducted monthly from my paycheck and deposited into the transportation flex account and I have to request reimbursement and if I don't have receipts I need to certify that I used it appropriately. 
Title: Re: tax-deductible mass transit expenses--something to play around with?
Post by: sheepstache on January 23, 2013, 10:36:56 AM
Okay, I confirmed the details.  We can get the money deposited to a special card specifically to be used to purchase the metrocards or we can get it direct deposited and just keep receipts for our own peace of mind in case we get audited.  Which is hot because then I can still break metrocard purchases into smaller increments to make up the minimum number of debit swipes I need for the checking account.  If I do end up having more deducted than I need, it's not a problem because, on paper, it rolls over to the next year so, so long as I eventually use it for transit expenses, I should be legit I think.
Title: Re: tax-deductible mass transit expenses--something to play around with?
Post by: Fuyu on January 25, 2013, 08:23:11 PM
I'm not sure if its the same for you, but if your company uses BriWeb too, you can adjust what amount is deducted as often as you want online.
Title: Re: tax-deductible mass transit expenses--something to play around with?
Post by: c on January 25, 2013, 08:46:47 PM
My company takes part in this. I currently have monthly metro card cost deducted from my salary pre-tax.  Once every two years or so I put a stop on the deduction for a couple of months because I end up with a largish balance as I'm not really buying a card *every* month. It rolls over, but I have to use the balance for me and for my travel; I can't buy a weekly pass for out of town guests for example.  A friend retired recently, she had a HUGE amount left on her balance and calculated that she'd never use it all given how her transport needs have changed. I watch mine more carefully.

My company uses WageWorks to administer this.

If you work for a company in NYC you can ask them to sign up for this, they have various incentives to encourage companies to participate, but I've never looked into who "they" are.  My last company offered this too, but you got a $20 metro card each month on top of your tax-free deduction.

Other cities probably have similar things. I know my Boston SiL's car insurance company would send her a rebate every year if she could send them her monthly subway (bart?) cards.
Title: Re: tax-deductible mass transit expenses--something to play around with?
Post by: Skyn_Flynt on January 26, 2013, 07:37:34 AM
I have access to this too, and used public transportation for several years. But I finally got tired of the unreliability of it. Seemed like every other week, there would be a day that the transit system didn't have all their busses operating, and I'd end up waiting an extra 30 minutes. So I resumed driving to work.

Yeah, yeah, I know - live closer. Walk or bike to work. But I like the part of town I'm in, it's proximity to the park system, and the stores where I shop for food. I don't feel like building my whole life around my employer.
Title: Re: tax-deductible mass transit expenses--something to play around with?
Post by: jnik on January 26, 2013, 08:07:15 AM
ps. apparently there's a related program to compensate you for bike commuting expenses up to $20/month.
Unless that's changed recently, it's set up that if your employer reimburses you for bike commuting expenses, they can claim that as a deduction. A lot of people heard it as "I can deduct bike expenses" but it requires employer involvement.