In today’s digital age, TikTok has become a hotspot for quick tips, life hacks, and yes, even tax advice. As a dental practice owner navigating the complex world of taxes, it’s tempting to turn to these bite-sized videos for guidance. However, a word of caution is in order: not all advice on TikTok is created equal, especially when it comes to taxes for dental professionals.
In short- TikTok videos don’t tell the full picture or details just the headline. Once the details are uncovered you typically realize the strategy doesn’t fit you.
Many TikTok influencers, while well-intentioned, may lack the expertise and qualifications to provide accurate tax advice for dental practices. It’s crucial to remember that tax laws are constantly changing, and what was true last year may no longer be applicable today.
Here are a few examples of bad TikTok tax advice geared towards dental practice owners:
- Buying a Car for Your Dental Practice and Writing it Off 100%: Some TikTok influencers may suggest that you can buy a car for your dental practice and write off the entire cost as a business expense, claiming a 100% deduction. While there are deductions available for business vehicle use, claiming the full cost upfront without proper documentation and adherence to IRS guidelines can lead to audits and penalties. Can you really prove the car was 100% used for your practice, and it was a necessity? Be ready for the IRS to ask for mileage logs, gas and maintenance receipts and further proof the car was only used for your dental office! Insiders Tip- Most dentists fail this audit due to lack of proof.
- Adding Your Kids to Payroll: Another common misconception on TikTok is that adding your children to your dental practice’s payroll automatically qualifies as a deductible expense. While there are opportunities for family members to work in a business and receive compensation, the IRS has specific rules regarding reasonable compensation and job responsibilities for family members, which must be followed to avoid tax issues. Plus you need proof! Do you have time sheets, job descriptions, performance reviews ect!
In conclusion, while TikTok can be a fun and entertaining platform, it’s essential for dental practice owners to approach tax advice with caution. Relying solely on TikTok for tax guidance can lead to costly mistakes and potential IRS issues. Work with your go to Tax Advisor that sees this day in and day out, and save yourself the headache by going straight to the source!
