Tax season is upon us, and pet parents are faced with the unfortunate reality that although they may consider their pets as family, the IRS doesn’t allow them to claim their animal companions as dependents. That being said, there are a few different deductibles that may apply to your fuzzy family members. Keep on reading to learn more if these pet deductions could benefit you!
1. For Service and Guide Animals
If your pet is a service or guide animal and is medically necessary for you to have, you may be able to claim their expenses as a medical deduction, as long as your total medical expenses are more than 7.5% of your adjusted gross income. Expenses that you could potentially write off include food, toys, vet and grooming bills, boarding expenses, training, and more! Keep in mind that you will need proof from a physician that your animal helps you treat a diagnosed medical condition. Your animal must be able to provide a service, such as guidance, turning on lights or opening doors, retrieving medications or other items, getting help in the event of an emergency, interrupting panic attacks or anxiety, or any other documentable service. Emotional support animals can potentially qualify, but it’s important to note that although all pets offer emotional support, not every pet can qualify for deductions.
2. For Working Animals
If you have a business and your pet offers some service to that business, you may be able to claim their expenses as a tax deduction. For example, if your cat keeps mice out of your store, or your dog scares off intruders, these could be claimed as deductions. There must be proof that your animal benefits your business in a concrete way, but if so, you may be able to claim food, medical and grooming bills, training, and other expenses! In addition to keeping track of receipts, you should also have a record of how much time your pet spends at your business location.
3. For Foster Animals
Fostering pets is a very generous thing to do, but it’s not always cheap. In 2011, the Humane Society reported that volunteers spend an average of between $2,000 and $15,000 every year on fostering animals. As long as you foster through a 501(c)(3) not-for-profit organization, you can write off food, medical bills, grooming bills, toys and other pet supplies, and even a portion of your utility bills, as long you have part of your home that is dedicated solely for the foster animal and your utility bills have increased as a result of having the animal. If, during the course of the year, you have more than $250 worth of fostering-related expenses, you need to get an official letter from the shelter stating that you are a fosterer or a volunteer. It’s also important to note that you must be working with an approved charity in order to claim these expenses as a charitable tax deduction. While rescuing a stray off of the streets is still very generous, you won’t be able to claim the related expenses as deductions.
4. For Performance Animals
If you have an animal that earns income by performing in some manner, you might be able to claim the expenses for its care as a business expense. This could be a pony that’s part of a petting zoo, a dog that is featured on your monetized social media channel, a cat that wins pet show competitions, or more! If your pet earns income, you could be able to claim expenses related to feeding it, grooming it, bringing it to the vet, training it, and more! As with all tax records, you should keep a very clear record of how much you’ve spent on your pet, as well as how much income it has earned.
A Tail of Taxes
If any of the above scenarios apply to you, it’s vital to keep careful records of your animal’s expenses and any receipts spent on items or services for the animal. Being able to obtain a deduction for your pet can be beneficial, but as with all tax matters, you should consult your tax preparer to determine if any of these deductions apply to you.
If your animal isn’t a working, service, or foster pet, unfortunately you won’t be able to take advantage of any tax deductions for them. That being said, any donations you make to an approved non-profit organization can be considered tax deductible. These donations can either be money or goods, which means you can donate extra pet food or toys that your own pet may not need and potentially get a tax deduction (as well as good karma!).
One survey in 2018 determined that 45% of pet owners would like to claim their pets as dependents, and one third of those thought that this would eventually be a reality. While you can’t claim animals as dependents (yet!), you can research other ways to help your pets obtain the best care possible, such as by setting up a pet trust or obtaining pet insurance!