As tax day approaches, financial professionals caution against following unsound advice circulating on social media platforms like TikTok. Claims such as writing off pets as business expenses or hiring one’s own kids for a tax refund could potentially lead to fines, according to the Internal Revenue Service. The agency warns taxpayers to be wary of fraudulent tactics or false tax-related schemes trending on popular social media platforms. While it is positive that social media creators are engaging young people in finances, it is crucial for users to seek advice from experienced professionals. Advice should be customized based on individual goals.
One flawed piece of tax advice circulating on TikTok is that taxpayers can claim their car as a business expense. While a car can be a legitimate business expense, it must be proven that the vehicle is used for business purposes. Keeping a mileage log can help track business use versus personal use, and deductions can only be claimed for business-related expenses. Another erroneous suggestion is that parents can hire their children and deduct their salaries as a business expense. However, the children must be performing necessary tasks for the business, and payments must be made through payroll. Disingenuous deductions, such as claiming a high salary for a young child as a model, are likely to raise red flags with the IRS.
Another piece of questionable advice is that taxpayers can claim their pets as guard dogs. Unless the pet is used for specific business purposes, such as dog grooming or therapy, it is unlikely to be considered a legitimate deduction. Pets that simply hang out at home and occasionally bark are not likely to pass muster as guard dogs. The IRS cautions taxpayers against interpreting dubious social media advice as legitimate, as following incorrect advice could result in penalties. It is crucial for individuals to seek advice from educated and experienced professionals when it comes to tax matters.
Business expenses such as claiming a car or hiring children must be legitimate and supported by documentation to withstand IRS scrutiny. Keeping detailed records, such as mileage logs and time sheets, can provide evidence of legitimate business expenses. Hiring professionals like certified financial planners can help taxpayers navigate complex tax regulations and ensure compliance with the law. While social media can serve as a conversation starter on financial topics, it is essential for individuals to seek professional advice tailored to their unique circumstances and goals.
In conclusion, taxpayers should be cautious when following tax advice from social media platforms like TikTok, as some suggestions may be inaccurate or misleading. The IRS warns against trusting fraudulent tactics or false tax-related schemes promoted on popular social media platforms. It is essential to seek advice from educated and experienced professionals when it comes to tax matters to avoid penalties or fines. Keeping detailed records and documentation of business expenses can help support legitimate deductions and ensure compliance with tax laws. Consultation with certified financial planners can provide personalized advice tailored to individual goals and circumstances.
