HomeTop StoriesTax pros warn against following terrible tax tips circulating on TikTok

Tax pros warn against following terrible tax tips circulating on TikTok

As tax day approaches, TikTok creators give archive tips, including suggestions on what types of purchases you can charge off. But financial professionals warn against following the advice spreading on the social media platform could be unsound.

Among the most visible but flawed pieces of advice are claims that taxpayers can write off their pets as business expenses, or hire their own children for tax refunds.

The Internal Revenue Service has also warned taxpayers not to misinterpret dubious advice on social media as legitimate, saying following the wrong advice could potentially lead to fines.

“The IRS cautions taxpayers to be wary of relying on internet advice, whether it is a fraudulent tactic promoted by scammers or a blatantly bogus tax-related scheme trending on popular social media platforms,” the agency said.

Mara Derderian, a professor of finance at Bryant University, said that while it’s good for social media creators to engage young people in the topic of finance, it’s also important that users know who they’re seeking advice from.

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“Social media is a great conversation starter, and from there you should make sure you seek tax-related or other advice from a well-trained, experienced professional,” she told CBS MoneyWatch. “Everyone has unique goals and your advice should be tailor-made.”

Here are three tax pieces of advice circulating on TikTok from so-called “finfluencers,” or financial influencers, that experts say they should be wary of following.

1. You can declare your car as a business expense

While a car can be a legitimate business expense, taxpayers are not licensed to purchase new vehicles and automatically depreciate them. To start with, you must be able to demonstrate that you are actually doing business with it. One way to do this is to keep a mileage log and keep it updated at the end of the year.

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“You can track the mileage and if you have a year where you use the car more for personal use than for work, you can’t deduct it for that year. So that’s the problem,” says Dallas-Fort Worth. based certified financial planner Katie Brewer.

2. You can employ your children and deduct their salaries

Again, parents can legitimately employ their own children, but their children must actually do work required to run a business in order for their wages to be claimed as a business expense. “This one comes up a lot and I tell people they actually have to do something, and you have to pay them through payroll. You can’t just hand out a grant,” Brewer said. “Keep a timesheet of what they do, just in case someone gets audited. That will serve as proof that you’re not just throwing money at your kids.”

Also, withholding a $4,000 salary for your 9-month-old child, who you claim is a model, is another example of a disingenuous deduction that will likely raise red flags with the IRS, according to Terrance Hutchins, an in Frisco, Texas based Certified Financial Planner.

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“You wouldn’t pay them that much for one photo shoot, that’s not really reasonable,” he said.

3. You can claim your pet as a watchdog

Brewer said she’s fielding more customer questions about whether they can claim their pets as guard dogs, citing advice on TikTok. The answer is no in most cases.

“Unless you’re a dog groomer or dog trainer or have a therapy pet and you’re using it because you’re doing counseling, chances are pets aren’t going to be written off,” she said. “If you work from home and have a pug that hangs around and occasionally barks out your window, no, it won’t pass the test.”

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