Personal Use of Company Car (PUCC)
If you drive a company-owned car or truck ("personal use of company car" or PUCC), it is important that you keep detailed records of your miles driven regardless of your position or status as a shareholder of the corporation. The miles driven, both for personal and company use, will be referenced along with the Fair Market Value of the vehicle to determine a dollar amount that should be reported to payroll and included on your W-2 as a taxable fringe benefit. This calculation is something most CPAs will perform as part of their year-end tax planning.
Report With Wages: This fringe benefit is taxable across all payroll tax types (Federal withholding, Social Security, Medicare, and State withholding). Thus, it is ideal to have the PUCC amount calculated prior to the final payment of wages for the calendar year in order to provide an employee sufficient other earnings to offset the tax due. If the amount is not included before the payment of the employee's final wages, the employer will be required to cover additional employee taxes.
How is the PUCC amount calculated? IRS Publication 15-B details three methods related to this fringe benefit (cents per mile rule, commuting rule and leased value rule). For more details see IRS Publication 15-B.