The employer engages the services of TotalBen to offer the plan. It is usually cost-neutral to the employer, although sometimes they may realize significant tax savings.

You, the employee:

• Set aside before-tax money from your monthly pay in a special account.
• Pay for your commuting expenses in the same way you have done in the past.
• File a claim with TotalBen for your expenses and receive reimbursement (possibly in the same paycheck as your deduction).

How do you save money? The eligible expenses you incur are reimbursed tax-free. You do not pay FICA, federal, state (some exceptions), city or local taxes on that money. Your tax break is your savings. See a sample before/after paycheck.

Of course, there are details, exceptions, limits, guidelines and all sorts of other technical aspects to the Commuter Account Plan since the IRS regulates this benefit. However, at a very high-level, this is the synopsis. For the full detail, you can read the actual IRS regulations.

The bottom line is that if you have a reasonable idea of your monthly commuting expenses and they are eligible under the plan, you might save $300 - $1200 annually. Of course, each individual's situation is different and these numbers only represent the typical savings. Your own savings could be higher or lower.