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Thursday, January 17, 2008

Tax talk - Changes in the exempt public transportation and parking rates

For 2008, the IRS has increased the monthly amount employers can exempt from employee's taxable pay for bus fare/van pool to $115; I believe the limit was $100 previously. In additional, as per Accountingnet: IRS Increases Tax-Free Help for Commuters, up to $220 per month towards work-related parking is also exempt from employee's taxable pay.

Many firms, especially several federal, state and county governmental agencies, provide free subway/public transportation passes/fare cards to their employees. The main idea is to help their employees with the commuting costs, and at the same time, encourage the use of mass transportation. While this program is fine for private companies since they are using their funds, I am a bit apprehensive of the need for this benefit for the governmental agencies since the cost of such benefits is ultimately borne by tax payers. In the past, I remember reading in newspapers taht several governmental employees had abused this program as they would get the subway/bus fare cards from their agencies and then sell them for slightly lower than their face value on sites like Craigslist. I hope the governmental agencies have taken steps to curb that practice as otherwise this governmental benefit is just another way to waste tax payers' hard-earned money.

For complete article, see:

Accountingnet: IRS Increases Tax-Free Help for Commuters

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posted by Ruby @ 8:13 AM

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