Author Topic: Thaanks, IRS!  (Read 6479 times)

oldtoyota

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Thaanks, IRS!
« on: November 13, 2013, 01:15:23 PM »
The IRS offers pre-tax benefits for transportation. For 2014, the limit for parking increases from $245 to $250 per month. The benefit for using mass transit decreases from $245 to $130.

oldtoyota

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Re: Thaanks, IRS!
« Reply #1 on: November 13, 2013, 01:21:58 PM »
And I think they announced it *after* I had to make other pre-tax decisions about decuctions at my work. Double thanks!

marty998

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Re: Thaanks, IRS!
« Reply #2 on: November 13, 2013, 01:31:32 PM »
What public policy goal is served by giving a benefit for parking?

beltim

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Re: Thaanks, IRS!
« Reply #3 on: November 13, 2013, 01:42:22 PM »
What public policy goal is served by giving a benefit for parking?

Re-election.

seattlecyclone

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Re: Thaanks, IRS!
« Reply #4 on: November 13, 2013, 01:44:52 PM »
As far as I know, the main public policy benefit of the pre-tax parking subsidy is that it frees employers in lower-cost areas from the burden of calculating a fair-market dollar value on space provided in the company parking lot and withholding an appropriate amount of tax on that value from employee paychecks. In higher-cost areas, parking is treated as a taxable benefit only to the extent that it exceeds $250/month in value.

For a variety of reasons I would argue that the $250 limit is a higher than prudent and should in no cases be higher than the public transit subsidy limit. Still, some level of tax-free parking allowance makes a lot of sense in order to reduce administrative reporting burdens on fringe benefits of minimal value.

brewer12345

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Re: Thaanks, IRS!
« Reply #5 on: November 13, 2013, 01:48:29 PM »
Shouldn't you be blaming Congress rather than the IRS?

jfer_rose

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Re: Thaanks, IRS!
« Reply #6 on: November 13, 2013, 02:31:05 PM »
Shouldn't you be blaming Congress rather than the IRS?

Yup, the blame goes to Congress on this one.

acroy

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Re: Thaanks, IRS!
« Reply #7 on: November 13, 2013, 02:59:18 PM »
wow I had no idea you could deduct parking. How arbitrary is that?? Subsidizing driving your car - while Mrs President is spending tax dollars at the same time on her LetsMove.gov campaign. Bah.

Luckily my work pays me $2.25/day to cycle to work. I have to say, they really do try to be green.

dragoncar

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Re: Thaanks, IRS!
« Reply #8 on: November 13, 2013, 04:38:46 PM »
As far as I know, the main public policy benefit of the pre-tax parking subsidy is that it frees employers in lower-cost areas from the burden of calculating a fair-market dollar value on space provided in the company parking lot and withholding an appropriate amount of tax on that value from employee paychecks. In higher-cost areas, parking is treated as a taxable benefit only to the extent that it exceeds $250/month in value.

For a variety of reasons I would argue that the $250 limit is a higher than prudent and should in no cases be higher than the public transit subsidy limit. Still, some level of tax-free parking allowance makes a lot of sense in order to reduce administrative reporting burdens on fringe benefits of minimal value.

Now that makes sense! It never occurred to me that the government would consider an employer's parking lot where employees can park a taxable benefit.

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CommonCents

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Re: Thaanks, IRS!
« Reply #9 on: November 14, 2013, 10:24:34 AM »
wow I had no idea you could deduct parking. How arbitrary is that??
It's not deducting parking, it's letting employers pay for parking for employees tax free.

And really, while it is stupid, what is that $115 difference going to cost you? Maybe $40 in taxes if you're in the top bracket?

You're on a forum where people are making spreadsheets to optimize grocery shopping and discussing the finer points of darning. We're exactly the kind of people who worry about $40.

Very true.

I'm moving shortly and will need to get a $173/month pass instead of my $70 one.  That's $43*12 or $516.  Not an insubstantial sum to have tax free.  About $150 at a 28% bracket.

rocketman48097

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Re: Thaanks, IRS!
« Reply #10 on: November 14, 2013, 12:02:55 PM »
wow I had no idea you could deduct parking. How arbitrary is that??
It's not deducting parking, it's letting employers pay for parking for employees tax free.

And really, while it is stupid, what is that $115 difference going to cost you? Maybe $40 in taxes if you're in the top bracket?

You're on a forum where people are making spreadsheets to optimize grocery shopping and discussing the finer points of darning. We're exactly the kind of people who worry about $40.

EXACTLY

dragoncar

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Re: Thaanks, IRS!
« Reply #11 on: November 14, 2013, 03:20:32 PM »
wow I had no idea you could deduct parking. How arbitrary is that??
It's not deducting parking, it's letting employers pay for parking for employees tax free.

And really, while it is stupid, what is that $115 difference going to cost you? Maybe $40 in taxes if you're in the top bracket?

And the employer gets to deduct the business expense

oldtoyota

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Re: Thaanks, IRS!
« Reply #12 on: November 14, 2013, 07:37:56 PM »
wow I had no idea you could deduct parking. How arbitrary is that??
It's not deducting parking, it's letting employers pay for parking for employees tax free.

And really, while it is stupid, what is that $115 difference going to cost you? Maybe $40 in taxes if you're in the top bracket?

You're on a forum where people are making spreadsheets to optimize grocery shopping and discussing the finer points of darning. We're exactly the kind of people who worry about $40.
lol. Very true but $40 per year? I agree it sucks and it's stupid but not worth griping over. Especially since in theory (snicker) that means less taxes for the general population to cover this break

Edit: I just saw the limits were per month, not per year. Ignore my remarks :)

Well. If it is such a small amount, then why won't the gubment let us keep it?