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Commute Benefits Provide More for Less: Tax Savings make a Difference

Commute Benefits Provide More for Less: Tax Savings make a Difference. $50 salary increase:. Writes off expense for corporate income taxes (40%, federal and state). pays FICA (7.65%). Employer Cost. $34. + $4. - $20. pays FICA (7.65%). pays federal income tax (28%). pays state

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Commute Benefits Provide More for Less: Tax Savings make a Difference

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  1. Commute Benefits Provide More for Less:Tax Savings make a Difference $50 salary increase: Writes off expense for corporate income taxes (40%, federal and state) pays FICA (7.65%) Employer Cost • $34 + $4 - $20 pays FICA (7.65%) pays federal income tax (28%) pays state income tax (6%) Employee value • $29 - $4 - $14 - $3 $50 transit/vanpool benefit: Writes off expense for corporate income taxes (40%, federal + state) Employer Cost No FICA • $30 - $20 Employee value No state income taxes No federal income taxes • $50 No FICA

  2. Commute Benefits Provide More for Less:Tax Savings make a Difference Employer cost = $34 Employee takes home only $29 after taxes Employer cost = $30 Employee takes home full $50 value $50 transit/ vanpool benefit $50 Corporate income tax deduction Corporate income tax deduction Employee income taxes + employee-paid FICA Employer -paid FICA No taxes paid on benefit $50 salary increase

  3. Tremendous Value for Investment $125 For employees who switch from driving, gasoline savings alone = $40 per month $50 tax-free provides the same value to employees as $85 in taxable salary + savings from other vehicle expenses could be another $120 per month Employer cost = $30 Employee takes home full $50 value Corporate income tax deduction No taxes paid on benefit

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