What is the tax treatment for personal use of company cars?
The value of personal use of company cars or any other taxable cash or non-cash benefit must be included on Form W-2. Taxpayers are required to report these benefits before their last payroll for the year.
Reporting taxable benefits with cash wages allows the appropriate withholding taxes to be deducted from the employee’s check. If these amounts are processed without wages, the taxpayer may be required to pay the employee’s portion of Social Security and Medicare taxes.