Financial Planning & Social Media
BY: Chrissy Israel, ChFC®- Financial Planner
Social media is a place that can connect people in many ways. As more people are connecting and sharing information and ideas, it is important to note that while you can get incredibly helpful tips, social media can also circulate inaccurate or misleading information.
A common trend in social media is tips and tricks videos and links to help make daily activities easier and less time intensive. These videos can be incredibly helpful with cleaning tips, gardening, and cooking. Recently, these videos are providing financial and tax advice to their viewers.
The Internal Revenue Service came out with an article during their Dirty Dozen tax scam series that deters people from utilizing these financial tips to better your tax refund. They noted in the article that the advice given on these tips are luring people with bad advice, potentially leading to identity theft and tax problems in the future. These scams include creating fraudulent tax forms for a larger refund and filing professional use forms for personal use to avoid a balance due. The IRS states the best way to learn how to properly use tax forms, and to accurately follow social media accounts related to taxes, is to go to IRS.gov. They will list instructions in their form repository for each form in your tax return and will list their official social media accounts. You can also talk with a tax professional to help identify any opportunities with your tax plan.
Other tips you will commonly see revolve around financial planning. Most of these tips and tricks involve saving plans, retirement planning, purchasing insurance contracts, and debt relief. A lot of these videos can be extremely relatable because these are people who are seen to be “just like us.” One thing to keep in mind with this advice is it should be your first step. If a video inspires you to make a change, it is important to discuss the information with a financial professional who is a fiduciary. A fiduciary must act in the best interest of their clients when providing advice. A lot of the products and advice given are an overview of what each tip can do. They often have limitations, qualifications, and underlying costs that are not discussed or presented in an honest manner. A fiduciary will be able to help build a realistic plan for your financial goals that works best for your situation, because what you see on social media is surface level.
If you would like to discuss any of the tax or financial tips you’ve seen recently, please contact our office at 937-435-2742.
IRS Article for reference: https://www.irs.gov/newsroom/dirty-dozen-taking-tax-advice-on-social-media-can-be-bad-news-for-taxpayers-inaccurate-or-misleading-tax-information-circulating