There are hacks for almost anything on TikTok, but not all are worth following. While trying a viral recipe or a makeup tip might not do much harm, following bad tax advice could cost you a lot. Some so-called loopholes spread quickly online, but taxes are complex, and simplifying them into a 30-second video often leads to misinformation.
Believing these TikTok tax hacks could leave you with penalties, unpaid taxes, or even legal trouble. These are some of the worst ones floating around that you should completely ignore.
Claiming Pets as Business Expenses
Another viral hack suggests that pet owners can write off expenses by claiming their pets serve a business purpose. Some claim that if a pet occasionally barks at strangers, it qualifies as a guard dog expense and can be deducted.
NVO / Pexels / While hiring your kids can provide tax benefits, the IRS has strict rules. Children must perform legitimate work appropriate for their age and receive reasonable wages.
Sure! The IRS does allow deductions for guard dogs, but only in specific cases. The animal must be a breed suitable for protection and used primarily to guard business property. Listing your household pet as a business expense without meeting these conditions is not allowed and could trigger an audit.
Hiring Your Kids as a Tax Hack
Some TikTok users claim business owners should hire their kids to reduce taxable income and fund a Roth IRA. They argue that paying children a salary lets families shift income to a lower tax bracket and build tax-free savings.
Simply adding them to the payroll as a loophole could be considered fraud. If the IRS investigates and finds no real work being done, you could face serious penalties.
Forming an LLC to Deduct Personal Expenses
Many TikTok users suggest forming a Limited Liability Company (LLC) to write off personal expenses like mortgage payments, car loans, and even groceries. They claim this setup lets people reduce their taxable income by disguising personal costs as business expenses.
In reality, LLCs do not grant blanket tax exemptions. The IRS strictly separates personal and business expenses. Only expenses that are ordinary and necessary for business operations qualify for deductions. Writing off personal costs as business expenses could lead to hefty fines and IRS scrutiny.
Mike / Pexels / If your luxury car is not used for business purposes at least 50% of the time, you can not write it off!
Writing Off Luxury Vehicles
Some TikTok videos promote a so-called loophole that allows business owners to deduct the full cost of a luxury vehicle, like a Range Rover, as a business expense. These videos reference IRS Section 179, which does let businesses deduct some vehicle costs.
However, there are strict limitations. The vehicle must be used for business purposes at least 50% of the time, and there are caps on how much can be deducted - especially for luxury vehicles. Misusing this rule could lead to disallowed deductions and trouble with the IRS.
TikTok ‘Tax Hacks’ Are Risky
Relying on TikTok for tax advice is risky. While some creators mean well, most viral hacks leave out crucial details or bend the truth. The IRS regularly warns taxpayers about misleading advice on social media, as following bad guidance can lead to audits, penalties, and legal trouble.
Instead of trusting viral videos, get tax advice from a certified professional. A qualified tax expert understands the law, stays updated on changes, and ensures you remain compliant with IRS rules.
