Can you claim pets on taxes?
Although they are a part of the family, pets do not count as dependents and taxpayers can only claim expenses for pets in a limited number of situations.
Like raising children, families can incur sizeable expenses taking care of their pets. The federal tax code gives US taxpayers with children and dependents several credits that they can take advantage of when filing, especially on 2021 tax returns.
Uncle Sam however, does not consider it the responsibility of the other US taxpayers to give you a break on your tax bill, except in certain cases, for your pets. Here’s a look at when you can use your pets for tax purposes.
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Which pets qualify for tax deductions?
Any pet that works for you or earns money, which you will report on your tax return, can qualify for tax deduction purposes, if they meet the requirements set by the Internal Revenue Service.
It is important that you keep good records of all your expenses so that they can be accurately reported and in the event you get audited you can prove that they are legit. Also it’s recommendable to get certified professional advice and help when filing you taxes.
Pet-related businesses
Professional animal breeders, not hobbyists, can deduct business-related expenses just like any other business. This could include costs incurred for food and to get veterinary medical treatment for the animals. Additionally, expenses for housing and training the animals in question along with advertising the business.
Celebrity pets that earn income
Pets can make their owners a fortune if they have the right look from appearing in calendars and movies to featuring on advertising and TV shows. Some develop such a following that they have their own merchandising. These cash cows need to be fed, groomed and get their regular check-ups at the vet to keep them healthy and continue bringing home the bacon. All expenses that would be deductible come tax time.
Animals that protect or work for a business
Dogs have been protecting us and our belongings since they became our best friends. Today there are specific breeds considered apt for this line of work, your average mutt will not cut muster with Uncle Sam to be claimed as a business expense to safeguard your business. It should be a certified guard dog in order to deduct training, dog food and veterinary bills among other costs incurred.
Farm dogs would also fall into this category not only to protect property and other animals, but as a laborer for shepherding.
In all cases the animal is a piece of physical property that must be depreciated over time. Talk to a certified tax professional who knows the most up-to-date information on the tax code.
Service pets
A certified service animal that provides health-related assistance could provide you with a tax deduction. A service animal is not a pet. Generally dogs fall into this category but it isn’t a title exclusive to canines, as long as it “is individually trained to provide assistance to an individual with a disability.”
You will need to back up the animal’s status with documentation from a professional that it is trained to do the task needed and that you need the assistance you are claiming. Since it is for medical purposes, you will be limited to the amount of medical care expenses that you are allowed to claim.
Charitable donations to animal shelters
Donations to tax-exempt animal shelters or other charities that help animals could be deductible on your tax filing. This could include money, property or items such as food or other needed materials.
Time spent volunteering at a animal shelter isn’t deductible but out-of-pocket expenses incurred while volunteering that aren’t reimbursed could be valid to claim. For example, these could include gas, parking fees or even tolls you pay in order to provide transport for the shelter not just getting there and back from home.
Likewise, normally when you adopt a rescue pet you pay a fee or a set donation. That is not deductible, nor the value of donating space in your home to foster or rescue an animal. However, reasonable expenses that you pay out of pocket while the animal is in your care, such as dog food expenses and veterinary bills, could be deductible.