Tax Breaks for Mass Transit Users

Sunday, March 03, 2013

 In 2013, users of mass transit can expect their tax returns to be a little easier to stomach. That's because users of public transportation will be allowed the same benefits as those who commute to work by car. In 2012, taxpayers who drove to work were allowed $240 monthly to help alleviate parking costs, but users of mass transit were only able to set aside $125 per month for travel costs. This year, as part of a provision that was tucked inside the legislation which helped keep Congress from falling off the fiscal cliff, those who commute by transit will receive identical benefits to those who drive to work-- $245 to set aside each month.

“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,” explained Lisa Greene-Lewis, lead CPA at the American Tax and Financial Center at TurboTax. Obviously, this is great news for anyone who commutes by bus or rail! As reported by Bloomberg News, that's 2.7 million families. Further, Congress decided to make this change retroactive for 2012 as well, so the benefits this year may even pay off double for some. Get the full details from Today.com.

The current provision will only be in effect for tax year 2013; to support mass transit and foster healthier attitudes toward ridesharing in our communities, this change must be made permanent. Whether for the same or different dollar amount, parity in benefits with commuters who drive is crucial to encouraging people to commute responsibly!

Ahh! Transit benefits about to expire!

Monday, November 22, 2010

If you take transit to get to work each day, this coming January you could pay more out of your own pocket when the transit tax deduction gets cut in half. Meanwhile drivers will keep their full parking benefit, which is double what transit commuters will be eligible to receive. For those who spend more than $120 a month on your commute in a vanpool, train or bus, the federal government will be sending a message loud and clear: they’d like you to start driving to work, where you can get $230 for parking deducted from your paycheck tax free.

A provision in the stimulus bill increased the transit benefit from $120 to $230, finally putting it on equal footing with the $230 parking benefit and extending this great benefit to everyone, whether they drive or take transit each day. But that provision is about to expire unless Congress votes to extend it during their December session.

Transportation is the second largest household expense for many households. The millions of Americans who depend on transit to get to work each day shouldn’t have to pay more to do something that also saves us energy, reduces congestion and emissions, and uses less oil.

If you do not think it is fair, then tell congress! Transportation for America has setup a petition you can sign to urge Congress to restore the transit benefit and make it equal to the parking benefit. Signatures will be delivered December 1, so you must act fast! (Source: Transportation for America)