Most people treat their pets a lot like children. You feed them, provide them a safe place to live, teach them skills (sit, stay), bring them to the doctor when they are sick or for a checkup, play with them, and show them love. They are part of your family.
Can you or someone you know deduct these and other pet-related expenses? Like most tax deductions, it depends. Let’s look at some situations:
Service Animals / Guide Dogs
If you require the assistance of a service animal (these include assistance animals for the blind, hearing impaired, mobility impaired, and therapy animals), expenses related to the animal could be considered medical expenses.
You will need a prescription from a doctor showing your medical necessity before you obtain the animal, and keep all documentation that shows the animal was trained and certified as a treatment for your specific medical illness or condition. Then, keep records of all expenses that relate to the animal. These could include training, veterinary care, grooming, food, and other reasonable expenses.
If your dog is used to guard and protect your business location, it might be a legitimate business expense. It would have to make sense (to the IRS) for a dog to be used in this fashion. For example, a dog guarding a junkyard, a warehouse, or a small retail store after hours would make sense. A dog guarding your home office – probably not.
Also, the size and breed of dog is important to help prove the dog being a legitimate guard dog. German Shepherds, Rottweilers, Bull Mastiffs, and Dobermans could all normally considered ‘guard dogs’. Your Teacup Poodle, Yorkie, or Chihuahua won’t be very convincing to the IRS inspector.
Think of the dog like any other business asset – you must keep track of all expenses and hours worked. Food, training, and veterinary bills can all be deductible.
Barn Cats / Pest Control Cats / Feral Cats
Instead of keeping out criminals, maybe your goal is to keep your barn / warehouse / lot / junkyard free of mice and rats. This could be either cats you own or feral cats you attract by leaving out food. You may be able to deduct food and veterinary bills for these pest control professionals.
Like the guard dog example, you have to show a reasonable business use, and document your expenses.
Show Animals / Hobby Income
Do you have a ‘show dog’ or ‘show cat’? Do you enter your dog or cat in shows to earn money? If so, the prizes and other income you earn from these shows could be considered hobby income. You may be able to deduct food, training, veterinary, show fees, travel, and even lodging expenses up to the amount of your winnings. Detailed records are the key for any hobby income and deduction, and show animals are no exception.
If you provide a foster home for animals from a qualified nonprofit organization, your expenses related to the foster care may be deductible. You can’t deduct expenses that are provided or reimbursed by the organization (most organizations provide food, litter, and medical care for the animals). However, any other expense that is not reimbursed (like mileage to/from the organization) may be considered a tax-deductible charitable contribution.
If you have to move due to work, you may be able to deduct some of the moving expenses. Moving your personal belongings, vehicle, boat, lodging on the way to the new home are all valid expenses. So are expenses related to moving your pets. This could include a pet carrier for the trip, or the cost of shipping your pets separately from the rest of the family.
If you think one of these deductions may apply to you, contact us to discuss your pets and what documentation you might need. This will save valuable time when we prepare your tax return.