March 13, 2013

Commuter Deduction

A followup to last week's posting about the Commuter Fringe Benefit offered by the IRS. The state of Massachusetts also has a Commuter Deduction. According to the Massachusetts Filing and Payment information page:

If an employer pays for an employee's MBTA pass, the amount by which the value of the pass exceeds $125 a month is included in the employee's income and reported as wages on the employee's W-2. To calculate the commuter deduction in these circumstances, the employee first deducts the $125 a month ($1,500 a year) from the cost of the pass; the remainder is the amount qualifying for the commuter deduction. The amount of the commuter deduction is the portion of the qualifying expenses that exceeds $150, and the total amount deducted cannot exceed $750.

May sure to to talk to your tax adviser on how to fill out the Massachusetts Schedule Y if you a commuter rail rider. This is a good deduction to take advantage to offset the price increase in done in July.

Comments

Add your Comments

Feel free to leave a comment about this post.

- Feel Free to add HTML to your comment!