Tax pros warn against following terrible tax tips circulating on TikTok

As taxation time approaches, TikTok creators are dolling retired filing tips, including suggestions astir what kinds of purchases to constitute off. But financial professionals be aware against pursuing proposal proliferating connected nan societal media level that mightiness beryllium unsound. 

Among nan astir visible, but flawed pieces of proposal are claims that taxpayers tin constitute disconnected their pets arsenic business expenses, aliases prosecute one's ain kids for a taxation refund. 

The Internal Revenue Service has besides cautioned taxpayers against interpreting dubious societal media proposal arsenic legitimate, saying that pursuing incorrect proposal could perchance lead to fines.

"The IRS warns taxpayers to beryllium wary of trusting net advice, whether it's a fraudulent maneuver promoted by scammers aliases it's a patently mendacious tax-related strategy trending crossed celebrated societal media platforms," nan agency said. 

Mara Derderian, a professor of finance astatine Bryant University, said that while it is bully that societal media creators are engaging young group successful nan taxable of finances, it's important for users to beryllium alert of whom they're taking proposal from. 

"Social media is simply a awesome speech starter, and from location you request to make judge you're seeking tax-related aliases different proposal from an educated, knowledgeable professional," she told CBS MoneyWatch. "Everybody has unsocial goals, and your proposal should beryllium customized."

Here are 3 pieces of taxation proposal circulating connected TikTok from alleged "finfluencers," aliases financial influencers, that experts opportunity to beryllium wary of following. 

1. You tin declare your car arsenic a business expense

While a car tin beryllium a morganatic business expense, taxpayers don't person licence to bargain caller vehicles and automatically constitute them off. For starters, you person to beryllium capable to beryllium that you do successful truth usage it to behaviour business. One measurement to do this is to support a mileage log and tally it up astatine nan extremity of nan year. 

"You tin support way of mileage and if you hap to person a twelvemonth wherever you usage nan car much for individual than business, you can't deduct it for that year. So that's nan 'gotcha,'" said Dallas-Fort Worth-based certified financial planner Katie Brewer. 

2. You tin prosecute your kids and deduct their salaries 

Again, parents tin legitimately employment their ain children, but their kids person to really beryllium doing a occupation that's basal to moving a business successful bid for their wages to beryllium claimed arsenic a business expense. "This 1 comes up a lot, and I show group they person to really beryllium doing something, and you person to salary them done payroll. You can't conscionable dole retired an allowance," Brewer said. "Keep way of what they're doing connected a clip expanse successful lawsuit anyone gets audited. That will service arsenic impervious that you're not conscionable throwing money astatine your children for nary reason."

Also, deducting a $4,000 net for your 9-month-old who you declare is simply a model, is different illustration of a disingenuous conclusion that is apt to raise reddish flags pinch nan IRS, according to Terrance Hutchins, a Frisco, Texas-based certified financial planner. 

"You wouldn't salary them that overmuch for 1 photoshoot, that's not really reasonable," he said. 

3. You tin claim your pet arsenic a defender dog

Brewer said she's fielding much queries from clients astir whether they tin declare their pets arsenic defender dogs, citing proposal connected TikTok. The reply successful astir cases is no. 

"Unless you are a canine groomer, canine trainer aliases person a therapy pet and usage it because you do counseling, pets are astir apt not apt to beryllium written off," she said. "If you activity from location and person a pug that hangs retired and occasionally barks retired your window, no, it's not going to walk muster."