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Check into employer programs

Federal tax law allows employers to provide transit, vanpool and parking benefits to employees on a tax-free basis. The law allows up to $230 per month for transit and vanpool, and another $230 per month for parking benefits.

Some companies are taking flexible scheduling to the next level.

"Employees can receive both benefits if, for example, they park at a commuter train station and take the train into work," says Dan Corbett, vice president for transportation development of WageWorks in San Mateo, Calif., which bills itself as "the nation's largest independent provider of consumer-directed spending solutions and services."

Employers can provide the benefit as direct in-kind benefit or allow employees to pay for the benefit through a pretax payroll deduction similar to a 401(k) deduction, Corbett says.

"The exact savings will vary based on the particular tax brackets and state you live in, but typically customers save 30 (percent) to 40 percent of their costs up to the pretax limits," he says.

For example, a customer spending $100 per month on transit would save about $500 per year.

"A customer spending up to the limit of $230 per month, for monthly parking or a commuter train ticket, could save $1,100 per year," he says.


 

 

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