So one negative I found with the next tax cut bill

[steppinthrax]

It removes the employer business expense deduction for reimbursing transit expenses. This would have a high impact one those living in SoMD or transit areas that use commuter bus/wmata etc... Those that work for private contractors or private sectors. My employer pays for my transit benefit (commuter bus). I will have to see how it plays out, it might likely not change much, but they could get rid of that benefit. In my case that is at least $2,000 a year in savings.... My colleague spends around 3500 a year in train fares...

I believe 60% or so of Calvert commutes to DC.

 

[LightRoasted]

If I may ...

It removes the employer business expense deduction for reimbursing transit expenses. This would have a high impact one those living in SoMD or transit areas that use commuter bus/wmata etc... Those that work for private contractors or private sectors. My employer pays for my transit benefit (commuter bus). I will have to see how it plays out, it might likely not change much, but they could get rid of that benefit. In my case that is at least $2,000 a year in savings.... My colleague spends around 3500 a year in train fares... I believe 60% or so of Calvert commutes to DC.

Just means the business can't use it as a deduction anymore, not that the reimbursing will stop. Depends on the employer now if they will keep doing it. How much they value the employee. Maybe there will be cost sharing programs created? Maybe the employee will have to bear the total cost. Maybe an increase in pay to counter the loss and have employee be responsible for their own bus transit costs. Time will tell.

 

[Gilligan]

I was not even aware that employers were providing such a benefit. My company reimburses employees for POV round trip travel for off site work (mostly airport round trips), but nothing for a daily commute.

Is company reimbursement for commuting expenses common?

Edit: Wait...what??

The IRS allows businesses to deduct expenses for business travel by owners and employees, but no deductions are allowed for commuting expenses. The rationale is that everyone commutes (travels to work), so commuting is not a business but a personal expense.

https://www.thebalance.com/communicating-expense-versus-travel-expense-398676

 

[vraiblonde]

I'm sure there are a number of minor negatives in the tax bill. The idea is that the bigger breaks more than make up for them. Greater good, and all.

 

[Gilligan]

I'm sure there are a number of minor negatives in the tax bill. The idea is that the bigger breaks more than make up for them. Greater good, and all.

Except that employee commuting reimbursements were not deductible/expensible by the business before the recent bill either...

 

[vraiblonde]

Except that employee commuting reimbursements were not deductible/expensible by the business before the recent bill either...

Well, whatever. I'm just saying that there are going to be minor changes in there that negatively impact some people. A friend of mine works for a state facility and she's worried about funding being cut, while acknowledging that there's a lot of waste that goes on. People who are all about wealth redistribution aren't going to like the new tax laws. Rich blue staters who are used to being able to deduct their ridiculously high state and local taxes are weeping in their Beluga and Cristal.

I thought this report, from the New York Times, no less, was fun:

https://www.nytimes.com/interactive/2017/12/05/us/politics/tax-bill-salt.html

Note the subhead line:

Why the Wealthiest Are Hit Hardest
Even as it repeals several itemized deductions, the bill nearly doubles the standard deduction to roughly $12,000 for individuals and $24,000 for couples.

While many lower-income people take the SALT deduction, many would end up better off under the bill because the new standard deduction would be worth more than what they deducted in SALT and other itemizations. Experts predict that the share of taxpayers who itemize their deductions will fall to less than 10 percent from 30 percent currently.

The bill is very unpopular with rich tax cheats.

 

[steppinthrax]

If I may ...



Just means the business can't use it as a deduction anymore, not that the reimbursing will stop. Depends on the employer now if they will keep doing it. How much they value the employee. Maybe there will be cost sharing programs created? Maybe the employee will have to bear the total cost. Maybe an increase in pay to counter the loss and have employee be responsible for their own bus transit costs. Time will tell.

You are correct, yes it would depend if the employer wishes to continue the reimbursement. But this would entirely depend on your corporate ideology. If we say that corporations are inherently psychopathic and only care for saving a dollar (and there are those that exist) then they would cut such a program knowing it provides them no tax-savings benefit. However, some will keep it, considering they are getting a lower tax rate anyway. Knowing they don't want to lose good people over 200 a month etc...

 

[steppinthrax]

I was not even aware that employers were providing such a benefit. My company reimburses employees for POV round trip travel for off site work (mostly airport round trips), but nothing for a daily commute.

Is company reimbursement for commuting expenses common?

Edit: Wait...what??



https://www.thebalance.com/communicating-expense-versus-travel-expense-398676

I work around the DC/MD/VA area it's pretty common. Especially in SoMD where our commutes are like a 2nd job on top of our job...

 

[Gilligan]

I work around the DC/MD/VA area it's pretty common. Especially in SoMD where our commutes are like a 2nd job on top of our job...

That's pretty cool that the companies do that. However, as you can see from the various links I provided, it was not something they were allowed to deduct before now either. So it stands to reason that there would be nothing that would upset status quo.

 

[Gilligan]

Experts predict that the share of taxpayers who itemize their deductions will fall to less than 10 percent from 30 percent currently.[/I]

The bill is very unpopular with rich tax cheats.

10 percent? That seems low...considering how many small businesses there are in the country.

 

[GURPS]

It removes the employer business expense deduction for reimbursing transit expenses.

I remember in the early 2000's employers ins DC would get stacks of specially colored METRO Fare cards for employees to ride the subway.

Except that employee commuting reimbursements were not deductible/expensible by the business before the recent bill either...

just another method to encourage use of mass transit

 

[Gilligan]

I remember in the early 2000's employers ins DC would get stacks of specially colored METRO Fare cards for employees to ride the subway.




just another method to encourage use of mass transit

ahh...so it was a special carve out for expenses incurred taking public transportation?

 

[steppinthrax]

Well, whatever. I'm just saying that there are going to be minor changes in there that negatively impact some people. A friend of mine works for a state facility and she's worried about funding being cut, while acknowledging that there's a lot of waste that goes on. People who are all about wealth redistribution aren't going to like the new tax laws. Rich blue staters who are used to being able to deduct their ridiculously high state and local taxes are weeping in their Beluga and Cristal.

I thought this report, from the New York Times, no less, was fun:

https://www.nytimes.com/interactive/2017/12/05/us/politics/tax-bill-salt.html

Note the subhead line:

Why the Wealthiest Are Hit Hardest
Even as it repeals several itemized deductions, the bill nearly doubles the standard deduction to roughly $12,000 for individuals and $24,000 for couples.

While many lower-income people take the SALT deduction, many would end up better off under the bill because the new standard deduction would be worth more than what they deducted in SALT and other itemizations. Experts predict that the share of taxpayers who itemize their deductions will fall to less than 10 percent from 30 percent currently.

The bill is very unpopular with rich tax cheats.

Well for the past 2 years I've had over 25K in itemized deductions. I suspect 2018 I will have much more. I also have an LLC and passive income (rental), which I believe are taxes the same (need to find out). If not I need to think about putting the rental into a separate LLC, but I need to work out how much the personal property taxes will be in Maryland or if I will pay Baltimore's personal property tax for real estate in Maryland even though I live in Calvert. Calvert has one of the lowest personal property taxes (business) in the state (as my accountant says).

Anyway those minor things may have little difference to the lower taxes I may pay next year. I'm on the higher end of the bracket (at least definitely will be next year). But this is the important thing here, we are making assumption that there will be an increase in growth, if not then this tax cut will serious #### things up...

 

[steppinthrax]

That's pretty cool that the companies do that. However, as you can see from the various links I provided, it was not something they were allowed to deduct before now either. So it stands to reason that there would be nothing that would upset status quo.

Unless this article is wrong (posted below) or I'm reading from old sources.

https://www.cbsnews.com/news/the-gop-tax-plans-unwelcome-surprises-the-disappearing-deductions/

Or we are talking about two different things...

 

[Gilligan]

Unless this article is wrong (posted below) or I'm reading from old sources.

https://www.cbsnews.com/news/the-gop-tax-plans-unwelcome-surprises-the-disappearing-deductions/

Or we are talking about two different things...

https://www.washingtonpost.com/business/commuters-lose-transit-parking-biking-benefits-in-tax-bill/2017/12/15/e95d3690-e1ef-11e7-b2e9-8c636f076c76_story.html?utm_term=.1b71da77f590

Pretty limited..to only parking and transit passes.

Currently, companies can provide parking or transit passes worth up to $255 a month to employees

Ah..here we go...a much better explanation. And, as its been all along, only mass transit and parking expense are involved.

These benefits, however, will continue to be tax-exempt to employees, who can pay their own mass transit or workplace parking costs through an employer-sponsored program, using pretax income.

https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/commuting-benefits-deduction.aspx

 

[steppinthrax]

https://www.washingtonpost.com/business/commuters-lose-transit-parking-biking-benefits-in-tax-bill/2017/12/15/e95d3690-e1ef-11e7-b2e9-8c636f076c76_story.html?utm_term=.1b71da77f590

Pretty limited..to only parking and transit passes.

Well,

You consider bus passes, smart trip passes (which cover bus, rail, metro). The IRS is not specific on identifying the service uses by the employee. Have you taken the metro for a full month. From Suitland to Union is around 3.55 (last I check) + 5.10 parking so total day would be 12.20 a day * 22 (work days i a month) gives you around $268 a month. Now parking is not usually covered, so that's 7.10 a day still runs around $156 a day. Either way is significant. I'm also somehow assuming that everyone gets off at Union Station. . You have bus trans that could possibly occur. Now the article you posted is what I've been reading, possibly one of the other articles I've read it does say this...

"The reasoning behind the elimination of the deduction is that since the tax bill substantially lowers the corporate tax rate, smaller tax breaks that complicate the tax code are no longer necessary. Companies could still provide the parking and transit passes to employees, but they would no longer get the tax deduction."

That would be the employee to employer defense....

 

[Gilligan]

Well,

You consider bus passes, smart trip passes (which cover bus, rail, metro). The IRS is not specific on identifying the service uses by the employee. Have you taken the metro for a full month. From Suitland to Union is around 3.55 (last I check) + 5.10 parking so total day would be 12.20 a day * 22 (work days i a month) gives you around $268 a month. Now parking is not usually covered, so that's 7.10 a day still runs around $156 a day. Either way is significant. I'm also somehow assuming that everyone gets off at Union Station. . You have bus trans that could possibly occur. Now the article you posted is what I've been reading, possibly one of the other articles I've read it does say this...

"The reasoning behind the elimination of the deduction is that since the tax bill substantially lowers the corporate tax rate, smaller tax breaks that complicate the tax code are no longer necessary. Companies could still provide the parking and transit passes to employees, but they would no longer get the tax deduction."

That would be the employee to employer defense....

Seems to me that employers in the DC area that rely on employees from outlying areas would still have incentives to help were legal to do so.

My commute to my office is about 75 yards, so I obviously don't have a dog in this fight. I commuted over an hour each way (and on a traffic-free route too) for only 3 years of my entire 30+ year career. I don't know how you manage that...I doubt I could.

 

[nobody really]

You are correct, yes it would depend if the employer wishes to continue the reimbursement. But this would entirely depend on your corporate ideology. If we say that corporations are inherently psychopathic and only care for saving a dollar (and there are those that exist) then they would cut such a program knowing it provides them no tax-savings benefit. However, some will keep it, considering they are getting a lower tax rate anyway. Knowing they don't want to lose good people over 200 a month etc...

I thought that started in the early 90s when the government was providing funding to businesses that provided a supplement to people using public transportation. You didn't get anything if you drove in a carpool, etc. you had to use a commuter bus or metro.

 

[steppinthrax]

Seems to me that employers in the DC area that rely on employees from outlying areas would still have incentives to help were legal to do so.

My commute to my office is about 75 yards, so I obviously don't have a dog in this fight. I commuted over an hour each way (and on a traffic-free route too) for only 3 years of my entire 30+ year career. I don't know how you manage that...I doubt I could.

True, I agree. I suspect, unless you have a pretty ####ty and greedy employer that they won't cut it.

Well I'm 35, so I still have a lot of energy....

 

[GURPS]

Well I'm 35, so I still have a lot of energy....

I am 52 and drive an hour to Hollywood Everyday.