Darrin Klimek/Getty Images


If you're not already taking public transportation to work, here's a fine reason to start doing so: you can deduct your transit costs tax-free from your payroll. Or, if you have a green-minded employer, s/he can get tax-free deductions by paying your publicly transported way.

As part of Obama's American Recovery and Reinvestment Act (the ol' stimulus bill, the amount of money you can write off for taking public transit to work has nearly been doubled. This time last year, you could've been getting $120 a month set aside, tax-free, for your public transportation expenses?now, the number's been bumped up to $230 a month. This means that if transit costs you $230 a month, you can set that much aside from your paycheck as pre-tax dollars, and dodge the taxation bullet on the amount that accumulates over the year.

According to the American Public Transportation Association:

The law allows employers to give their workers up to $230 each month for transit or vanpool commuting costs as a tax-free benefit. It also allows employers to give employees the option to use payroll deductions to avoid paying taxes on up to $230 a month in commuting costs. Alternatively, employers can share these costs with their workers by paying part of their monthly commuting costs and letting workers pay the balance using pre-tax dollars. Either way, both employers and their employees can save money by participating in this simple plan.

You're eligible whether you take the subway, bus, tram, even vanpooling?and it amounts to a $2500 a year tax-sheltered incentive to start doing public transit. Which ends up amounting to a few hundred dollars in savings?and taking the bus/train can relieve some serious financial stress too, considering you won't be shelling out money for gas anymore (or at least you'll be buying much less). Ride your bike to work, and worried you're missing out on that sweet, sweet government stimulus nectar? Fear not, friend?you can get a tax break for riding your bike to work, too.

So if you want to get the benefit of riding public transit, just start heading for the bus stop. Or, even better, tell your boss that you're going to start taking public transit, and work out the best possible situation so you both can save some tax dollars.

For more on going green and saving green, check out our Eco-nomics Feature.