Transit riders to get a bigger tax break this year

Transit riders to get a bigger tax break this year
Transit riders will get a bigger tax break this year, thanks to the deal that averted a fall off the fiscal cliff. That law gives those who take mass transit to work the same pretax benefits as those who drive and pay to park.

You can set aside up to $245 a month to cover these expenses if your employer offers such a program.

That’s a big change from last year, when employees could set aside up to $240 a month to park, but only $125 a month for transit expenses.

"Someone in the highest federal tax bracket – 30 to 39.6 percent – could save about $570 a year. Someone in the 15 percent tax bracket could save about $260 a year," said Lisa Greene-Lewis, lead CPA at the American Tax and Financial Center at TurboTax.

And there’s more good news: Congress made the change retroactive. It’s as if the higher limit of $240 had been in effect for transit riders all last year.

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A bigger take break for those who take public transit