The rise of the “facet hustle” economic system has led to a report variety of People forming Restricted Legal responsibility Firms (LLCs) in 2026. Social media “finance gurus” usually promise that an LLC is a magic wand that turns your total life right into a tax deduction. They let you know to “write off your G-Wagon,” “deduct your loved ones trip,” and “expense your wardrobe.”
The truth is much much less glamorous. The IRS has considerably ramped up its enforcement price range for 2026, particularly focusing on small enterprise returns (Schedule C) that include aggressive, grey-area deductions. Whereas the tax code permits for a lot of official bills, claiming the improper ones is the quickest solution to set off a handbook audit that digs by years of your monetary historical past. To maintain the tax man away out of your door, listed below are the ten tax breaks you must completely keep away from claiming, it doesn’t matter what you noticed on TikTok.
1. The “Enterprise Swimsuit” Deduction
Probably the most persistent myths is which you could deduct garments purchased for work. The IRS rule on that is extremely strict: clothes is simply deductible if it’s not appropriate for on a regular basis put on.
The Entice: Shopping for a pleasant swimsuit for consumer conferences or a costume for a convention shouldn’t be deductible since you may technically put on it to a marriage or dinner.
The Actuality: Until you might be shopping for a uniform with a stitched firm brand, theatrical costumes, or protecting security gear (like steel-toed boots), IRS Publication 529 clearly states that work garments are a private expense. Claiming high-end vogue as a “uniform” is an instantaneous pink flag.
2. The “Commuting” Mileage
You possibly can deduct miles pushed for enterprise, however you’ll be able to by no means deduct miles pushed to enterprise.
The Entice: Many LLC house owners observe each mile from their driveway to their workplace (or their first consumer) and again residence.
The Actuality: The IRS classifies the drive from your private home to your principal administrative center as “commuting,” which is a private expense. You possibly can solely deduct journey from one work location to a different—for instance, out of your workplace to a consumer website. If your private home shouldn’t be your “principal place of job” (see #4), that first drive of the day is by yourself dime.
3. The “Household Trip” Board Assembly
This can be a favourite technique of aggressive tax preparers: reserving a household journey to Disney World and holding a 30-minute “annual assembly” within the resort room to write down off the airfare and resort.
The Entice: The IRS requires that the “major objective” of the journey be enterprise.
The Actuality: Should you spend 5 days on the seashore and 4 hours working, the journey is a trip. You may be capable of deduct the precise value of the enterprise meal, however writing off the household’s flights and the resort keep is taken into account tax fraud. The IRS journey tips particularly warn in opposition to disguising private holidays as enterprise journey.
4. The “Eating Room” House Workplace
The House Workplace Deduction is official, but it surely comes with a deadly caveat: “Unique Use.”
The Entice: You declare a deduction in your eating room or a nook of the lounge the place you’re employed in your laptop computer.
The Actuality: Should you (or your loved ones) use that area for anything—consuming dinner, watching TV, or children doing homework—the deduction is void. In 2026, auditors are more and more asking for pictures or ground plans throughout opinions. If the area isn’t a devoted room used just for enterprise, don’t declare it.
5. The “100% Enterprise Use” Automobile
Until you personal a plumbing van with no passenger seats that stays parked on the warehouse in a single day, claiming you utilize a car 100% for enterprise is statistically unattainable within the eyes of an auditor.
The Entice: You purchase a luxurious SUV underneath the LLC and declare it’s by no means used for groceries, college pickups, or private errands.
The Actuality: The IRS is aware of that small enterprise house owners combine private and enterprise driving. Claiming 100% use with no second private car within the family is a documented audit set off. It’s safer (and extra sincere) to maintain a mileage log and declare the precise proportion (e.g., 85%).
6. The “Fitness center Membership” Networking
You may meet purchasers on the health club, and also you may have to be match in your job, however the IRS usually views your well being as a private asset, not a enterprise one.
The Entice: Deducting your month-to-month Equinox charges as a result of “I community there.”
The Actuality: Until you’re a skilled athlete or a private coach who pays a price to coach purchasers at a selected facility, health club memberships are thought of private bills. Your normal well being shouldn’t be a tax write-off.
7. The “Membership Dues”
Within the days of “Mad Males,” you possibly can deduct nation membership dues. These days are lengthy gone.
The Entice: Writing off golf membership or social membership dues as “advertising and marketing bills.”
The Actuality: The Tax Cuts and Jobs Act explicitly eradicated the deduction for leisure bills, together with membership dues for any membership organized for enterprise, pleasure, recreation, or social functions. You possibly can deduct the meal you eat with a consumer on the membership (50%), however the dues themselves are 100% non-deductible.
8. The “Passion” Loss
In case your LLC loses cash each single yr, the IRS stops viewing it as a enterprise and begins viewing it as a passion.
The Entice: Working a pictures or craft enterprise that spends $10,000 on gear however solely makes $500, and utilizing that loss to decrease the taxes in your W-2 wage.
The Actuality: The IRS “Passion Loss” rule usually requires you to point out a revenue in not less than 3 out of the final 5 years. Should you don’t, they’ll retroactively disallow all of your losses, forcing you to pay again taxes and penalties on the earnings you thought you sheltered.
9. “Spherical Quantity” Bills
Nothing screams “I made this up” fairly like a tax return stuffed with zeros.
The Entice: Itemizing your promoting expense as $1,000, your journey as $2,000, and your provides as $500.
The Actuality: Actual life doesn’t occur in spherical numbers. Your promoting was seemingly $987.42. When the IRS laptop scores your return (utilizing the DIF system), spherical numbers are a high-risk issue that implies you might be estimating reasonably than holding data.
10. The “Charitable” Time
You can’t deduct the worth of your time, it doesn’t matter what your hourly fee is.
The Entice: You invoice $200/hour as a advisor, so that you donate 10 hours of labor to a non-profit and attempt to deduct $2,000.
The Actuality: You possibly can deduct out-of-pocket bills (like mileage or provides) for charity, however the IRS assigns a price of $0 to your labor. Claiming a financial deduction for time labored is a straightforward error for auditors to catch and penalize.
Avoiding an Audit Entice
The golden rule of tax planning is that if a deduction feels “too good to be true,” it most likely is. The aim of your LLC needs to be to generate revenue, to not generate audit letters. In 2026, the price of defending your self in an audit—paying a CPA 1000’s of {dollars} to reconstruct your logs—far outweighs the $300 you may save by making an attempt to write down off a swimsuit. Follow the black-and-white deductions, preserve impeccable receipts, and sleep soundly figuring out the IRS has no cause to knock in your door.
Have you ever ever been suggested to take a questionable deduction by a “artistic” accountant? Go away a remark under—sharing your story may save another person from an audit!
