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Many companies provide their employees with automobiles.
Business use of an employer's car is a nontaxable, working condition fringe benefit to the employee. The value of any personal use is generally taxable compensation. Generally, the employer must treat all use as personal use except for business use properly reported and substantiated to the employer. Several safe harbor substantiation methods may be available to reduce the recordkeeping burden for both employer and employee. An employee's annual business use of an automobile usually is substantiated based on a record of business mileage and total mileage for the year.