responsible_fruit1

responsible_fruit1 t1_j6knijx wrote

this is a confusing question but if you're planning on spending the money anyway, you're always going to save money pre-tax vs. post-tax.

for example: if your pre-tax income is $1000 and you spend $100 per month on public transportation for whatever reason (and assuming 20% taxes):

  • using the commuter benefits pre-tax
    you'd be paying 20% on your income minus $ you save for commuter benefits
    $1000 - $100 = $900
    paying total of $900 * 20% = $180 in taxes
  • if you forgo the commuter benefits and just pay out of pocket
    you'd pay 20% tax on your income of $1000
    paying total of $1000 * 20% = $200 in taxes

it'll always be in your best interest to decrease your overall taxable income to save money in the long run.

1