By Galen Moore
Pay for health insurance, pay the orthodontist, pay for your commute to work. These things can come out of your paycheck pre-tax, saving you 17.4 cents on the dollar (if you pay the same tax rate as Warren Buffett). Unless, that is, your ride to work is one of the bike share services now active in some 50 U.S. cities.
Washington, D.C., was a leader in bike-share adoption, one of five cities that had a program in place in 2010. It and other cities have left the federal government behind, at least as far as tax policy is concerned. According to data from the city of Portland, more than 50 cities had at least piloted a bike share by the end of last year.
The IRS works from a list of qualified transportation fringe benefits, set by Congress. The list allows pre-tax deductions for mass transit commute expenses, but excludes from its definition of “mass transit” any vehicle that seats fewer than six passengers. Congress most recently renewed these programs in May of 2013.
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