tax deduction on commuting to work

if the employer is paying this for you, then you will not get any tax deduction. You can only deduct things you actually pay for. Even if you covered all of your commuting expenses, it would still have to be over 2% of your ago for you do deduct anything.

transit benefits should be available pre-tax. your employer should offer this benefit - as it saves them some scratch as well.

just ask HR if they offer pre-tax transit benefit.

I'm curious what employer wouldn't already know the answer, if they offer the benefit? That is a bit scary.

In any case, do I understand corrrectly that you will net the same amount of cash on the bottom line in either scenario? In that case I would go for the higher base salary. That will benefit you more in the long run as salary increases are frequently based on a percentage. Also, if there is a tax deduction, you will only be able to claim what you pay out of pocket so you don't want that as a line item on your W-2.

Employers can deduct transportation (commuting) benefits they offer employees but they have to participate in a Section 125 Cafeteria Plan and offer the benefit(s) to all employees. There are limitations and exclusions to what the employer can deduct.

Employee paid commuting costs to and from the employee's home and main office are never deductible.

lots of caveats and trust me, I've looked into it - but the short answer is no, commuting expenses aren't deductible.

"deduction" means that it's basically not taxed - e.g. it's not considered income. Your savings is roughly your effective tax rate times the amount. so, if you pay $4000/yr for the train, and assuming it was deductible, and your effective tax rate is 15%, your tax liability would be $4000x15% = $600 less. This may or may not mean you'd have that refunded.

Quote from Dr. J : lots of caveats and trust me, I've looked into it - but the short answer is no, commuting expenses aren't deductible. "deduction" means that it's basically not taxed - e.g. it's not considered income. Your savings is roughly your effective tax rate times the amount. so, if you pay $4000/yr for the train, and assuming it was deductible, and your effective tax rate is 15%, your tax liability would be $4000x15% = $600 less. This may or may not mean you'd have that refunded.

Actually the savings would be the deduction times his/her marginal tax rate.

OK after some hair pulling and pencil butt biting along with cursory research I think this is what I understand:

1. since I'm taking public transportation (commuter train and subway) to work, the Fed. tax law allows my tax deduction for up to $245 for transportation and $245 for parking per month (nice!).
ref.
http://www.nctr.usf.edu/programs/...ebenefits/
http://www.kingcounty.gov/transpo...efits.aspx

2. I guess what the director meant when he said something about the tax deduction for my commute expense is that if the salary they pay me covers both the base salary and the commute, I will then be able to use the above law to get most of my traveling money back (pre-tax) for the commute part of the salary so the company won't pay me the full amount. Since the cost is $79 (parking/mo) and $345 (train+subway/mo), I can receive full $79/mo and $245/mo in tax return after the deduction, so they really only need to pay me $100/mo for the commute (good for the company!).

3. What I don't understand right now is the state tax deduction part. I fill RI tax because I am RI resident, however my traveling crosses RI and into MA. According to the director MA gives tax deduction to whoever takes public transportation to work ( but it doesn't concern me right? Maybe it concerns the company if they can get the tax return for paying my transportation ) but not sure about RI tax law and that's the part I could not find any info or even begin to understand it.

btw thanks for all the comments and ideas. It helps me understand the situation better, or understand that it's not easy to find this type of things from reputable online sources.

This doesn't really answer your question but the fiscal cliff "deal" that was just reached increased the monthly commuter tax benefit amount from $120 to $245.

This doesn't effect you but I thought I would point out in case anybody else was interested that the change was made retroactively for all of 2012. My company had to amend all of our W2's because of this.

Quote from Dem Bums : This doesn't really answer your question but the fiscal cliff "deal" that was just reached increased the monthly commuter tax benefit amount from $120 to $245. This doesn't effect you but I thought I would point out in case anybody else was interested that the change was made retroactively for all of 2012. My company had to amend all of our W2's because of this.

If I can get tax refund for my commute ($245 monthly off of my $345 monthly pass) I am happy

Quote from teetee1 : If I can get tax refund for my commute ($245 monthly off of my $345 monthly pass) I am happy

It's not a tax credit, it's a deduction.

I don't think so....

" allows employers"

I don't believe this is a deduction of any sort - your employer has to offer a program where they either pay for transportation costs or allow you to pay for them pre-tax.

You cannot get a tax deduction for your work commute costs, however, your employer can offer a program to use pre-tax money to be used toward commute (typically only public transportation) costs.

http://www.smartmoney.com/taxes/i...sts-15660/

Quote from Dr. J : lots of caveats and trust me, I've looked into it - but the short answer is no, commuting expenses aren't deductible. "deduction" means that it's basically not taxed - e.g. it's not considered income. Your savings is roughly your effective tax rate times the amount. so, if you pay $4000/yr for the train, and assuming it was deductible, and your effective tax rate is 15%, your tax liability would be $4000x15% = $600 less. This may or may not mean you'd have that refunded.

Marginal rate.