Each year, changes to the tax code take effect and you as a taxpayer are responsible, whether you know of the change or not, so I highlighted a few changes that may impact you below.
IRS Mileage Rate
As most of you are aware, the IRS establishes a set mileage rate every year. This basically allows employers to reimburse employees who travel on behalf of the business with no tax consequences, provided the required documentation is submitted. This rate is determined by Runzheimer International, an independent contractor to the IRS. The rate in 2013 was 56.5 cents and beginning on Jan. 1, 2014, the standard mileage rate for the use of a car dropped to 56 cents.
Pre-tax Transit Benefits
Many employees use public transportation to travel to work or pay to park while at work, and costs for both may be significant. As a result, some employers have chosen to take advantage programs which allow employees to pay for theses costs with pre-tax dollars.
- Parking Benefit – In 2014, the amount allowable per month increased to $250, a $5 increase from the benefit allowed in 2013.
- Transit Passes – Conversely, the amount allowable per month for transit passes dropped to $130, a significant decrease from the $245 allowed in 2013.
If you participate in a program like this, be sure to take a look at your established plan since these benefits are typically lost if they are not used before the end of the year. If you would benefit from a plan like this, perhaps it makes sense to speak to your employer.
If you have questions or would like to learn more, please reach out to Genesis HR Solutions at AskUs@genesishrsolutions.com or 800-367-8367.
Genesis HR Solutions is the premier PEO provider for Massachusetts based businesses.