- Days left

Signing Up for Commuter Benefits Can Cut Your Tax Bill

If your employer offers this pretax subsidy, you can usually enroll anytime during the year.

×
Signing Up for Commuter Benefits
Ben Margot/AP
By Kimberly Lankford

My employer lets us set aside pretax money for commuting costs, but I didn't sign up at the beginning of the year. I just moved, and now I take the subway to work. Can I still get the subsidy? How much is it?

It's probably not too late. You can usually enroll anytime during the year for this monthly benefit. Contact your employer's benefits department to find out how to sign up.

Under the commuter benefits program, you can set aside up to $130 per month pretax for public transportation, such as the subway, bus or train.
People who drive to work can set aside up to $250 per month pretax for parking, and if you both drive and use public transportation -- if you, say, drive to a park-and-ride lot at the subway or commuter rail station-- then you can take both benefits and set aside $380 per month.

Once you enroll, your employer will automatically set aside the money, which won't be subject to income, Social Security or Medicare taxes. You can tell the benefits department to stop setting aside money -- usually for full-month increments -- if, for example, you'll be out of the office for a few weeks. You can then resume the benefits.

Keep an eye out for an increase in the commuter benefit limit. In past years, the public transportation and parking subsidies were the same, and Congress may still bump up the public transportation benefits for 2014 to match the parking benefits. "In the coming weeks, Congress will be determining if and how they will address a tax-extenders package, including commuter benefits," says Dan Neuburger, president of commuter services at WageWorks, which administers pretax benefits for employers. See WageWorks' employee site for more information and updates.


More from Kiplinger


Increase your money and finance knowledge from home

Introduction to Retirement Funds

Target date funds help you maintain a long term portfolio.

View Course »

Economics 101

Intro to economics. But fun.

View Course »

TurboTax Articles

Video: Tax Filing Requirements for Children

Depending on how much money they made during the year, your children may very well have to file for taxes. Learn about tax filing requirements for children with help from TurboTax in this video on tax tips.

Are Losses on a Roth IRA Tax Deductible?

When the value of your investments in a Roth IRA (Roth Individual Retirement Account) decreases, you might wonder if there is a way to write off those losses on your federal income tax return. Find out what you can and can't write off when it comes to your Roth IRA.

Video: Save Taxes by Saving Energy

Note: The content of this video applies only to taxes prepared for 2010. It is included here for reference only. From basements to attics, the federal government wants homeowners to save energy year-round. They're even willing to pitch in with tax credits for energy-efficient improvements.

Add a Comment

*0 / 3000 Character Maximum