Ferry Rider Fringe Benefits

Are you getting what you deserve for doing the right thing?

By Lionel Mayrand

Welcome to our new Money column. Bay Crossings has a few objectives for this new feature. In order to make your commute easer you need three things: There must be enough boats for your commute. There must be a convenient schedule for your commute. Your commute should be affordable. Our objective is very simple; "Help you earn more and keep more of what you earn."

You already have a billion-dollar view during your commute time; give some thought to using that time wisely. When I have to plan my time and spending, I use this formula "One third of the time to expand my knowledge and my income, one third of my time to save money, one third of the time just for me". To help you use this information in the Crossing, we have a simple format: A Topic, background information, discussion and a action check list. Your job is to use the checklist to "Help you earn more and keep more of what you earn." Bay Crossings needs your help in return. We ask you to spread the word about the Ferry System as a commuting and leisure time option. If you this information will help your friends, you need to tell them. If you are a decision maker in your company, you are going to get some great ideas to help retain your most valuable asset, your employees! Last note, we have tried to make this easy to read, but you need to check with your financial advisors, benefit department or Human Resources.

This is all about money and we are going to start with how your taxes can affect your transportation and commute. This year the Internal Revenue Code was changed, what a surprise! This paper is about the Regional Ferry System and how it can help you improve your life. So we are going to start this series with three articles devoted to Fringe Benefits. Our objective is to focus your commute time on updating your personal Fringe Benefits, more bang for the dollar, as an employee or self-employed person. If you or your company wants more information on any of our topic, let me know I will be glad to help. If you are self employed or work for your "S" corporation none of this applies to you and the other owners.

When the Congress changed the Energy Policy Act of 1992, Public Law 102-486, your companies’ Fringe Benefits options were changed as well. Our tax laws are not written by the Internal Revenue Service, they are written by your elected members of Congress, not government employees. One of the reasons our tax laws are so complex is that taxation is more than a revenue generating system. Taxation is a part of a set of public laws intended to make national policy and social change. Our tax system is made even more complex by the America devotion to the individuality. We make a lot of changes to extend fairness to everyone.

The changes that were made can help you save money. First, lets look at what the company can do for its employees, next we will look at what you as an employee can do. Here’s the good news: companies may now expand qualified fringe benefits to include Transportation Fringe Benefits, or additional tax-free benefits, for its employees. We are going to summarize the option and tell you as a decision maker what I think of the idea. If your company is doing some of these things, it’s your job to make it happen. The bad news is your company policy may not comply with all the current provisions of the law. If so, you need a checkup.

Transit passes can now be a qualified fringe benefit, up to $65.00 per month and it changes to $100 in 2002. Most transit authorities have a program that allows corporate purchase of pass for distribution and sale to employees. This would include all the Bay Area pass programs including Muni tokens. Add a Transportation Plan to your section 125 Cafeteria or Flex Plan; if you don’t have one you should.

Qualified Parking has changed this year. We all know the companies may provide free parking in company facilities and company parking lots,. What is new is that parking is now a Qualified Transportation Benefit, which means good news and bad news. The bad news is that the benefit is limited to $175 per month, which may not cover the full cost of the parking. Further, it must be in your benefit plan and the amounts are adjusted for inflation from time to time. What this means for many of us in the Bay Area is the difference between the amount paid and the $175 limit is taxable and needs to go on the W-2. The good news is that parking and transit can be combined as benefits so the monthly limit for both plans is $240.00. These changes mean its time to check on company policy. If I were a manager, I would not use this benefit option. It’s just too complicated. Add a Transportation Plan to your section 125 Cafeteria or Flex Plan, if you don’t have one you should.

Now it’s your turn as an employee. Remember our objective? "Help you earn more and keep more of what you earn." We are going to tell you how to check all your benefit options. Get out a file folder or a large envelope mark it "Benefit Plans" and we are going to get started. This file or envelope is going to be used to store the information and forms for our journey. During the next six months you can use this folder and our check list to review and understand each part of your benefit package. Each month we will cover another topic, next thing you know it’s done. "Help you earn more and keep more of what you earn." Now you can tell your family you are doing financial planning, and its part of your commute time. The Regional Ferry System offers you one of the best opportunities to use your commute time for focused attention on your family finances.

To help you get started with reducing the cost of your ferry rides you will need some information. Our Getting Started Checklist will help you organize your time and effort. First thing is to sign up in the company flex plan for transportation benefits. Up to $65 of your monthly commute pass or individual tickets can be received tax free, not state or federal income tax and no FICA. Next you combine this benefit with any parking expenses you have each month, up to $175 per month. Parking can be on either end of your Ferry Trip or that once or twice a month trip to the city. Sorry tolls are not part of this program, but get a transponder anyway. Now save your receipts for the monthly reimbursement from you plan. Don’t forget this even includes parking meters all you need to know is when and how much you spent. Keep your receipts in your "Benefit Plan" envelope or file folder. During the first week of the month, get a good cup of coffee on your way in to work, or a glass of wine on your way home. Get the reimbursement request form out of your file, file it in, mail it the next day. You just earned a bit of tax-free income, and the savings can as much as half your commute cost. I like to think the Internal Revenue Service and the Governor bought me a drink.

We have saved the hard part for last, if your company does not have a Flexible Spending Plan, a Dependent Care Plan and a Transportation Plan, ask them if they want information. Bay Crossings will send them an information kit and answer as many questions as we can.

Start Up Checklist

» Does your company have a 125 or Flex Plan?

» What is the name of the company plan?

» Contact person and phone number.

» Does your company have a transportation plan?

» Ask for information and forms

» If you do not have a current copy of your benefit plan or a handbook, ask for a new one. Put it in your benefit folder or envelope.

» If your company does not have a plan, send them this article.