6 Tax Breaks for Pet Owners You Can Actually Get
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We certainly love our pets, don't we?
We consider them part of the family, but the IRS doesn’t quite see it that way. The IRS takes the position that the money you spend on Fido or Fluffy is generally a personal expense. Your pet gives you pleasure like that latte you bought on your way to work this morning, but just like your cup of coffee isn’t tax deductible, neither is your pet.
There are a few loopholes, however. You might be able to deduct costs related to your pet if he serves another purpose in addition to accepting your undying devotion—and if you can prove it.
Guard Dogs
Generally, it’s difficult to claim your pet as a business expense, but if your pet guards your business location, you might be able to deduct the costs of keeping him fed and healthy.
“The IRS has taken a fairly hard-nosed stance when it comes to deducting the cost of animals as business expenses—and the courts have agreed with them,” says Micah Fraim, a CPA in Roanoke, Va., and author of “The Little Big Small Business Book.” “But one area that has been consistently upheld is when you own a guard dog. In fact, in Raleigh Cox and Brenda J. Cox v. Commissioner, the IRS didn’t even attempt to disallow deductions for a guard dog. The business was in a bad part of town, and the IRS felt that it was a legitimate expense.”
Cats Used for Pest Control
You might also be able to deduct costs associated with your kitty who keeps your business property free of mice, rats and other vermin.
“Cats or other animals that are kept primarily for pest control are also deductible,” says Fraim.
Fraim noted that in Samuel T. Seawright, et ux. v. Commissioner, the petitioners were entitled to a $300 business expense deduction for cat food.
“The couple owned a junkyard and put the food out to attract feral cats,” he says. “The court upheld the deduction as cats were there ‘to deter snakes and rats.'”
Offsetting Hobby Income
If you make money showing your pet—which the IRS might consider hobby income—you might be able to claim a tax break for related expenses.
“Pets used in hobbies, such as show dogs, might be deductible,” says Grasso. “If the dog wins prize money in the endeavor, then the expenses incurred to train, show, etc., are deductible up to the winnings.”
You can expet to receive a 1099 at the end of the year if you earn hobby income.
“You can also deduct related expenses up to the amount of income earned on Schedule A of the 1040,” says Fraim.
Foster Pet Parent Deductions
If you foster animals, you might be able to take advantage of tax benefits for charitable contributions.
“Any expenses you incur caring for foster animals from a qualified nonprofit are deductible on Schedule A as charitable donations,” says Fraim.
These must be unreimbursed expenses if you want to get the deduction, though, Grasso adds. And, the expenses should go toward caring for these animals, such as pet food, supplies and veterinary bills.
“Thankfully, most of these organizations provide the medical care and food for these animals,” says Fraim, “but any expenses paid out of pocket that are necessary for their care that are not provided for or reimbursed are deductible.”
What about if you volunteer at a shelter or rescue organization?
“Keep track of mileage for trips made to further the organization’s work because this is deductible at 14 cents per mile,” says Grasso.
Guide Dogs and Service Animals
Medical expenses are tax deductible if you itemize. Let’s say your pet helps you in a health-related capacity. If so, you’ll likely get a tax break.
You can also include the costs of purchasing and training guide dogs for the blind or hearing impaired. This also includes veterinary, food and grooming expenses. Pets are also used in therapy, such as in the treatment of post-traumatic stress disorder. These animals are covered as well, say Fraim and Grasso.
Moving Expenses
The IRS won’t let you claim your pet as a dependent—but it’s not so heartless as to make you leave him behind if you’re forced to move due to work.
You can deduct costs associated with transferring your pet to your new home, but there are some requirements you have to follow, according to the IRS.
Please contact us if you have any questions or comments.