Save on Your Commute with Pre-Tax Dollars
You already know that there are costs involved with either a car or public transit commute. Most people assume the only way to reduce this is through ridesharing or carpooling. Great start, but also consider an even better option: paying for your commute with pre-tax dollars.
Yes, that's right: reduce your tax obligation and reduce your commuting costs at the same time. Win-win. Here's how.
Under federal law workers can receive up to $230 a month in employer-paid tax-free transit costs, or take up to $230 a month in tax-sheltered payroll deductions for transit costs. This reduces your take-home pay and may even put you in a lower tax bracket.
With some transit providers, such as the MTA in New York City, you may realize savings of up to 40 percent paying this way.
Your company may also offer other benefits, such as merchandise discounts or other incentives, on top of it.Check with your HR department to see if your company has any commuter benefits. Some companies will allow you to pay for parking or metro fee's with pre-tax dollars. Paying with pre-tax dollars is the same as being able to write off your expense which could save you $50-$100 a month.
If the Human Resources Department can't hook you up, the website CommuterChoice.com will help you find a program in your area to save you some commuting coin. Consider your commute, hacked!