Tax Break Expected To Change Next Month For Commuters

English: SEPTA New Flyer E40LFR (Photo credit: Wikipedia)

Commuters who take trains or buses to work face a cut of up to $1,380 in their annual pretax transportation benefits, while commuters who drive will get a slight increase, starting next month.

Currently, both transit riders and drivers can set aside up to $245 a month to cover their commuting costs, through plans managed by their employers.

That “transportation fringe benefit” is similar to flexible spending accounts for medical or dependent-care expenses. Employees elect to deduct a certain amount of their salary for commuting costs; employees benefit by reducing their taxable incomes and employers benefit by reducing their payroll taxes.

But the transit benefit is caught up in tax-policy debates in Washington, and time is running out for congressional action to prevent the benefit from reverting to $130 a month (the 2012 limit of $125, plus a $5 inflationary bump). The parking benefit, meanwhile, is set to rise to $250, from the current $245.

Read more at http://www.philly.com/philly/business/transportation/20131206_Tax_break_expected_to_change_next_month_for_commuters.html#xQaDM8PsQcDa1VCv.99

Automatic Tips May Be Off The Table

If you’ve dined out in a big group, chances are you had an automatic tip tacked on to your bill.

That practice might soon go away.

Orlando, Fla.-based Darden Restaurants may drop automatic gratuities for tables of eight or more at its chains including Olive Garden, Red Lobster and LongHorn Steakhouse.

Experts predict others will follow suit.  An Internal Revenue Service ruling will treat automatic gratuities as wages. That could lead to higher payroll taxes for restaurants and make record-keeping more complicated.

Read more at http://www.philly.com/philly/business/consumer_news/Automatic_tips_may_be_off_the_table.html#0ZM1lP8QkvHAEumM.99

Senate Approves “Fiscal Cliff” Deal, Crisis Eased

WASHINGTON (Reuters) – The Senate moved the U.S. economy back from the edge of a “fiscal cliff” on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives.

In a rare New Year’s session at around 2 a.m. EST (0700 GMT), senators voted 89-8 to raise some taxes on the wealthy while making permanent low tax rates on the middle class that have been in place for a decade.

But the measure did little to rein in huge annual budget deficits that have helped push the U.S. debt to $16.4 trillion.

The agreement came too late for Congress to meet its own deadline of New Year’s Eve for passing laws to halt $600 billion in tax hikes and spending cuts which strictly speaking came into force on Tuesday.

Read more:  http://www.nbr.com/news/story?id=tag%3Areuters.com%2C0000%3Anewsml_BRE8A80WV#.UOMJA-TAdcz