There is no doubt that you can find a video to DIY just about anything now. Social media is full of how to’s, influencer recommendations, and seemingly helpful advice on pretty much every topic under the sun. While some of this might be helpful if you want to install a new garage door remote, there certainly are categories like professional advice that raise some eyebrows.
This tax season influencers took to social media like TikTok and Instagram making videos on accounting and tax advice. But how much of it was sound and how many taxpayers followed it?
As preparers we have all heard this sentence uttered from a client’s mouth, “I saw somewhere that I can do XYZ with my taxes.” Social media is the new car dealership advertisement that every new vehicle may be eligible for a tax break. In fact, this is still one of the favorite recommendations on social media posts for tax breaks.
Social media influencing itself has become a booming business. Unlike ten years ago when many of us still shopped in retail stores, buying habits are now heavily influenced by popular social media accounts and most shopping is done online. Trend setters and lifestyle influencers are promoting not just products to followers but also the idea that fashion and home décor purchases can be tax deductions for influencing businesses.
“Lifestyle” write-offs have been heavily promoted this year using the idea that if your appearance is part of your business model, such as in the beauty and fashion industry” items that you would otherwise be purchasing for personal use come with a tax benefit.
The concepts on social media are definitely misleading as professionals still know that anything with a potential personal use factor is extremely difficult to support when challenged by the IRS.
What’s more concerning is the number of individuals who have reported that followed advice about taxes from a social media source. A Forbes survey reported that nearly 80% of individuals aged 42 or under have followed tax advice they saw on social media. Yikes. The study didn’t reveal whether or not that advance even came from someone who appeared to be some type of tax professional.
The concepts on social media are definitely misleading as professionals still know that anything with a potential personal use factor is extremely difficult to support when challenged by the IRS.
This conundrum raises some questions about how professional preparers should combat the slew of bad advice or whether we even have a responsibility to do so? As a practice owner who uses social media to promote our services I am certainly reconsidering disclaimers we would attach to social media posts to include that our social media does not constitute tax advice.
It is clear the next generation is looking for some direction when it comes to how to best prepare their taxes. Small, at home businesses and side gigs are booming post pandemic and significantly more taxpayers are looking for ways to take advantage of their small business deductions.
If your firm has a social media presence, it can be helpful to share tools and tips on things you know potential clients are looking for. Providing a list of commonly missed deductions for Schedule C businesses or providing a list of common mistakes, like deducting too many personal expenses could be helpful.
Business miles is another commonly misleading social media post. Taxpayers are frequently misled that simply buying a new vehicle will result in tax savings, not realizing that the IRS still requires detailed logs of business miles to support any vehicle deductions. Posting a simple reminder or suggestion for mileage tracking tools like MileIQ are simple ways you can share value with your followers on social media and combat misinformation.
While we professionals know when we hear bad advice, it can be sticky to combat when a client is sitting in front of you insisting on something they heard. We certainly don’t have a requirement to attempt to combat bad advice put out on social media by non-professionals, but doing so is a simple way to support current clients, attract new ones and promote the value of our profession.
