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
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.
For More Info:
A bigger take break for those who take public transit
WHY !? Transit is already subsidized with federal ,state,local tax dollars.
This is a very broad and frankly not that accurate look on taxes. First of all, 30% to 39% is not "the highest tax bracket." There are several brackets within that range. The highest bracket is 39.6%. There is only one highest bracket. Â
Secondly, while each person or family's situation is different, I highly doubt that anyone paying the 39.6% rate (income over 400k) would avoid the Alternate Minimum Tax after taking these deductions. Obamacare taxes which only hit the rich cannot even be applied towards the AMT. Other health care deductions can no longer be applied to the AMT. Â
This is a tax deduction for middle/working class families, don't pretend it will help the rich too. Â
How about the bus rider making up the difference? If you use it... you pay. I'm waiting for the bus rider to subsidize my tank of gas a week for my commute. Same w/ the ferries. If you use it... you pay for it. When I visit a National Park, I'll pay. No worries there. There has to be some accountability and a use fee applied to those who use the service. Not tapping the whole for a subset of the few. I might as well pay for their parking at the Park & Ride too. What else of mine do you want?
@d_2Â You do pay for the park and ride . What made you thin kyou didn't. Park and ride lots are state,federal local property Thus pay no property tax. The land is also bought with tax dollars,fenced,paved ,maintained and patrolled.Â
@d_2You only had to read as far as the second sentence to see "That law gives those who take mass transit to work the same pretax benefits as those who drive and pay to park."
So it is extended the same benefit to them that you already have.
But nice rant. Hope you feel better.
@Steve98028 @d_2 And what about those of us that don't get that added benefit  I don't pay to park nor ride the bus.  The helping by the government only increases prices.  Tax breaks, write-offs and subsidizing doesn't come from no where, we pay for it still or it is added to our debt.
@Steve98028 I do thanks. Enjoy your bus ride on my dime.
@d_2Â @Steve98028 All this ranting because you are unwilling to admit you made a mistake in your reading of the article and original comment. Pathetic.
@Steve98028 The 'so-called' ignorance cop. Welcome... I hope you have the one bullet that is being passed around. Subsidized too I'll bet. Feeling great.. thanks! The benefit that I have is evident... but, I don't use it. It is a 'benefit' that should not be applied to the masses but only levied on those who use it. As you would apply it... if those who disagree with your position, you're ready to wave your 'ignorance' badge. Â
@d_2Â @Steve98028 Sorry, I don't ride the bus. Well, I did once about 4 years ago. My comment was not based on my riding the bus, just an attempt to stamp out ignorance.
Glad you feel better.
Wow the buses can't support themselves so tax payers subsidize them and then the people that are using this subsidized system get a tax break. This money isn't printed from no where it comes from us the tax payers.  I'm tired of working 55+ hours a week busting my hump and paying my taxes to see my tax dollars go to things like this.
@APenny4MyThoughts All transportation is subsidized in this country in some way, don't like it? Go form your own country if you don't wanna live in society.
@APenny4MyThoughts Are you sure your tax dollars are going towards this? Are you paying federal income taxes because there is a 50/50 chance that you don't. Your payroll taxes don't go towards this btw.Â
@APenny4MyThoughts  ummm what do you think the program does? I have it work and it allows me to pay for Parking/Bus passes with my pretax earnings and decrease my tax bases. For example if I made 50K and took out 200 amount for this program I would decrease my tax bases down to 47600. I can also use the program to pay for my daycare pretax with is much more expensive then my bus pass.  The Bus pass portion would  marginally decrease my tax bases and being most people pay at most for a two zone pass at 108 that would  be about 1300 dollar yearly benefit. You want to know the big thing your EMPLOYER has to sign up for this program. Most of the people I know who have this program also pay IN FULL for their employees to have a bus pass.Â
If you care where I got my prices from you can fine them here - http://metro.kingcounty.gov/tops/bus/fare/fare-info.html and the price for a pass http://metro.kingcounty.gov/cs/employer/pdf/ORCA-BusinessChoicePriceList.pdf
Here are my questions. You have no problem me decrease my taxable earnings paying for parking but not a bus pass? And in your words you have no issues me subsidizing a for profit entity but not government?
@Nikitalynn You would likely take the reduction and enter it into your itemized deductions since the standard deduction does not allow for this. Most people don't qualify for itemized deductions thus they would lose out on this. You cannot have this reduce your AGI.Â
@PrairieDawn I would love to know where you are preparing taxes so I can avoid it. The point you made about itemization is the reason these programs are around. It started with Child care payments, which the people who really need to benefit from being able to deduct them can't because they don't itemize. This programs allows you to pay with pre tax dollars they way you pay in to your 401K. So take my example above my W-2 doesn't list any more the 50K it only list the 47,600 I earned.Â