Old 01-07-09, 08:33 PM
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Scubachisteve
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Join Date: Jan 2008
Location: San Clemente, CA
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Bikes: 2008 Fuji Roubaix, 1988 Peugeot Monaco; 1985 Peugeot PH501

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Originally Posted by Scubachisteve
It depends.

A few questions:
1. Does your company have a section 132 plan?
2. Do you elect any pre-tax deductions for other commuter expenses such as train/bus passes for which you are reimbursed?

Your company needs to setup a fringe 'plan' before they can reimburse you. And they won't flat out give you $20. The plan works by allowing you to set aside $20 a month pre-tax for bicycle related items which creates a net benefit of a couple dollars to you depending on what tax bracket you are in. The government likes to word tax benefits to sound like you get $20(!) when really they're just allowing you to keep a few bucks in taxes because you're doing something socially acceptable in their eyes (like having kids or getting married; being green is the new hotness so papabear is going to cut you a break for riding your bike). Loves me some gubmint social engineering through taxes

Sorry I can't help but get snarky when I start talking about Uncle Sam. Regardless, there are some more details which I can get into depending on what other questions you have (and how you answer the ones asked). Just let me know.

-Scubachi
One clarifying point. Your employer COULD decide to contribute a portion of that $20 to you. If that happened I assume it would still come to you without being taxed (not sure though) and the employer can write it off as an expense. This may be how they pay for your parking. If that is the case then you would not qualify for the $20 reimbursement.

As a practical example:

I put my bike on the train everyday and ride from the train station to the office. Via my section 132 plan I've elected to set aside $120 a month pre-tax in a fringe account, from that account my employer pays me every time I give them a receipt for my train pass. My employer has the option of paying into some of that $120 expense thus taking the write-off (and reducing the amount I can set aside), but they don't. In any case if I or my employer are taking advantage of that existing benefit during the year, then I, nor they, can receive any further tax benefit from the $20 bicycle add-on.

In your case, If your employer just leases a bunch of parking spaces, hands out passes and doesn't take a credit via S.132, then you could take advantage of the $20 credit (whether subsidized by your employer (ideal) or just as a pre-tax benefit to you). That is, if you convince them to create a plan and add another fringe line to the payroll.

Okay, now I'm just rambling.....

Cheers!
Steven
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