Tax Savings for 2017: Commuter Tax Benefit

As we begin the New Year and resolutions are made, a common resolution is to budget or save money in the coming year.  One way to reduce spending is to find tax savings throughout the year which can increase your take home pay as well as reduce your income taxes.

The Qualified Transportation Fringe, also known as the Commuter Tax Benefit allows Employees to use up to $255 pretax dollars to pay for public transit passes, vanpool fares and parking.

The pre-tax benefit allows employees to save  on their annual taxes by allowing them to use pre-tax dollars for their commutes. An employee using the full $255/month pre-tax transit benefit can save over $1,000 in federal and state taxes by the end of the year!

Employers can also save money through the pre-tax transit benefit.  The annual payroll tax saving of upwards is $400 per employee if that employee is using the full benefit amount. 

The pre-tax transit benefit is a win-win for everyone involved and should be considered by all eligible employees and promoted by employers. Contact your Human Resources or Payroll department if you are eligible for this benefit.

If you have any questions about tax and estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.

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