TIKTOK IS SPREADING TAX MYTHS:
From the Editor: As if there were not enough bad actors out there, a new study has shown that many individuals are getting their tax advice from social media.
TikTok is spreading financial misinformation, according to a new report, including five troubling tax myths affecting self-employed workers.
According to Paul Koullick, CEO of tax software developer Keeper, the majority of the software's customers are in their 20s and early 30s and spend several hours a day on social media. A 2021 survey commissioned by Forbes Advisor found that nearly 80% of millennials and Gen Zers have gotten financial advice from social media, with 32% relying on TikTok.
"We constantly deal with misinformation coming from an account they follow, as well as more conservative fake news that the article doesn't focus on as much," said Koullick. "As a business, Keeper has to deal with the context people are coming in with and we need to understand that gray space in the tax world because we have to come up with our stance and values for our customers."
As a result, Keeper staff writer Chloe Bryan watched hundreds of TikTok videos to immerse herself in how tax information gets portrayed on social media. Relying on accountants and tax experts to validate the information to get both sides of the picture, the Keeper team also used the anonymized 2022 transactions from 28,449 self-identified freelancers who used the Keeper app.
The top tax five myths they discovered follow:
- If you write off $500 in business expenses, you'll save $500 on your taxes
- People who rely on their appearance for work can write off appearance-related expenses
- Lifestyle influencers can write off "lifestyle expenses" like clothing hauls or home decor
- You need an LLC to claim write-offs
- You can choose an expensive vehicle to go to work, because you'll be able to deduct its full cost the first year it's in use
According to a report commissioned by cryptocurrency company Paxful in 2021, one in seven videos from TikTok finance influencers is misleading, and only one in ten influencers is transparent about their qualifications. In a digital era where information spreads faster than ever, remaining critical about the content found online seems more critical than ever, especially when it concerns personal finances.
