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Our October Newsletter is now available.   Catch up on the Winter Street Bridge and other timely information!

Tax information for commuters:

Massachusetts Commuter DeductioN

A deduction is allowed for certain amounts paid by an individual for tolls paid for through a FastLane account or for weekly or monthly transit commuter passes for MBTA transit or commuter rail, not including amounts reimbursed or otherwise deductible. In the case of a single person or a married person filing a separate return or a head of household filing a separate return, this deduction applies only to the portion of such expended amount that exceeds $150, and the total amount deducted cannot exceed $750. In the case of a married couple filing a joint return, this deduction applies only to the portion of such amount expended by each individual that exceeds $150, and the total amount deducted cannot exceed $750 for each individual. Also, one spouse cannot transfer his or her excess deduction to the other spouse; separate worksheets must be completed to calculate the deduction.   For a copy of the worksheet to calculate the commuter deduction please click here for the 2004 Massachusetts Income Tax Booklet and go to page 20.

 

2005 Pre-tax Limits for Transportation Fringe Benefits
The IRS code Section 132 (f) sets limits on the amount of money an employee may use on a monthly basis to pay for commuter transportation expenses.   In 2005, you may set aside up to $105/month on a pre-tax basis to pay for transit expenses (e.g. rides on the MBTA, vanpooling, or private bus carriers) and/or up to $200/month for costs associated with parking*. You have the ability to elect both mass transit and parking expenses each month if these expenses are considered qualified.  For instance, a park and ride situation where you park at a MBTA parking lot in order to take the subway to work would be considered a qualified expense (the T fare would count toward the $105 transit limit, the parking fee would count toward the $200 parking limit).  In order to receive these benefits you must purchase your transit pass or parking directly through your employer.  Expenses paid out of your own pocket directly to a parking operator or transit provider do not qualify.
*Note:  The IRS may change the amount that is allowed to be tax-free on an annual basis.

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