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Tax breaks for getting to and from work

Labor Day is a holiday for many workers. But come Tuesday, most employed folks will be braving traffic again to get to their offices.

Traffic happens by Reinis Traldas via Flickr CCTraffic happens by Reinis Traldas via Flickr CC

Depending on the transportation method these workers use to get to their jobs, they could be eligible for some tax benefits.

On the road to work again: The peak commuting time, according to the U.S. Census Bureau's American Community Survey in 2014 (the most recent available data), was 7 a.m. to 7:29 a.m.

Of the more than 139 million total commuters two years ago, 20.56 million were on the road during that half hour.

The next most crowded commuting time was the following 30-minute segment. Almost 17.5 million drivers were on the road to work between 7:30 and 7:59 a.m.

Driving along beats carpooling: And Uncle Sam's Census data analysts have bad news for environmentalists.

Most commuters -- around 80 percent, or more than 111.5 million -- headed to work by car, truck or van and drove those vehicles alone.

Almost 16.7 million solo commuters hit the highways in the first half of the 7-to-8 a.m. hour. Another 14.6 million lone drivers were on the road in the 30 minutes leading to workday start at 8 a.m.

Carpoolers, however, accounted for just 13.5 million commuters.

Around 3.5 million of these groups of workers were headed together to their jobs primarily between 7 a.m. and 8 a.m. However, the 6:30 to 7 a.m. segment of carpooling was almost as crowded as the 7:30 to 8 a.m. time frame.

I guess you have to start a little earlier when you're collecting a lot of work colleagues.

Other transportation alternatives: Public transportation accounted for 7.6 million workers getting to their jobs in 2014. The peak travel periods for the folks who took to government-sponsored travel modes were between 7-to-7:29 a.m. for 1.16 million bus, train, etc. travelers and 8-to-8:29 a.m. for 1.11 more from.

In the half hour between those two periods, around 789,000 additional employees used mass transit to get to their workplaces.

The remainder of workers, just more than 4 million, walked to work, while another 2.7 million used a cab, motorcycle, bicycle or some other means (Uber or Lyft, perhaps?) to get to their jobs in 2014.

Tax breaks for commuters: Generally, the cost of getting from your home to your workplace (and back home again) is not tax deductible. The Internal Revenue Code considers commuting costs as nondeductible personal expenses.

But tax law does offer some ways to offset some of the heigh-ho-heigh-ho-it's-off-to-(and-from)-work-we-go costs.

And last year, the commuting tax help was tweaked. Public Law 114-113, which included both the Consolidated Appropriations Act and the Protecting Americans from Tax Hikes (PATH) Act, known as extenders, provisions and took effect on Dec. 18, 2015, permanently smoothed out the bumps in the commuting method tax highway.

P.L. 114-113 established parity for tax-free employer-provided benefits for workers who drive to work and park and those who use mass transit or van pools to commute. 

The law means that in 2016, the maximum monthly benefits for parking, transit and commuter highway vehicles are $255 per month. Prior to this law change, transit and commuter highway vehicles were limited to just $130 per month.

The amount also will be indexed in future tax years for inflation.

And commuters can receive both the transit and parking benefits, a total of up to $510 per month.

The qualifying commuting expenses that an employer provides are excluded from the recipient employees' gross income for income tax purposes. Companies also can set up special transportation savings accounts that they can use to use pretax dollars to pay for transit passes, van pool fares and parking fees.

Biking breaks, too: Employees who prefer non-motorized two-wheeling it to work can't set up a pretax savings account like their coworkers who drive or use mass transit.

But if companies decide to offer this benefit, bicycle commuters can get up to $20 a month to cover those to-work travel costs. That's up to $240 a year a business could provide each employee that meets the biking requirements for a full 12 months.

Bicycling woman headed to work by Sunny via Flickr CCPhoto by Sunny via Flickr CC

The bicycle commuting employer reimbursement includes the purchase of a bicycle and bike improvements, repair and storage.

These costs are considered reasonable reimbursable expenses under tax law as long as the bicycle is regularly used for travel between the employee's home and job.

Work-related tax breaks for non-commuters: If you're self-employed, remember that you can deduct business mileage.

And if you don't have to commute because, like me, you work from your residence, you have a couple of options to write off your home office expenses.

But for all y'all who will be heading to the office tomorrow, here's hoping the traffic is light and that your employer offers you some commuting tax savings.

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