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Three Ways to Potentially Deduct Your Dog or Cat Expenses


While pets can be tremendous sources of pleasure and companionship, owning one is not cheap. 


By the most current yearly expenditures for dog owners only, it will cost you between $1,270 and $2,800 per year to maintain your dogs. 


Given the ongoing expenses involved in your chosen companion, many pet owners are left wondering if these could be something they can deduct on their personal or business income taxes. 


While the vast majority of expenditures for pets are considered personal items and therefore not deductible, there are a few instances where you should be able to work one or more of the following into your calculation:




1. Medical Expenses

One of the most common ways to deduct pet expenses is if your dog or cat serves a medical purpose. You will qualify for this deduction if the animal is used mainly for medical purposes. Here are the basics you should know:


Service Animals

For example, take Jane. She is blind and has a guide dog called Max. The expenses that Jane incurs, such as purchasing Max, his training, food, grooming, and veterinary care, may be deducted from her taxes because Max plays an integral role in her life.


Emotional Support Animals

Emotional support animals can be eligible for medical expense deductions, but it is a bit more complicated than with service animals. 


Consider John who has anxiety and has a therapy dog named Bella. John's therapist prescribes Bella within his treatment plan so that he can deduct expenses such as vet bills and training costs for her care. 


To actually make this deduction, John will have to get a letter from his health provider explaining Bella's role in his mental health therapy.


Document all of your expenditures and the medical reason for your animal when documenting a valid claim for the audit when the IRS comes knocking.


2. Business Expenses

Another way you may be able to claim deductions is if your pet serves a legitimate business purpose. Here are a few examples where that would apply:


Guard Dogs

If you are a construction business, you hire a guard dog, Rocky, to protect your jobsite and equipment from intruders. 


You may be able to deduct the costs of Rocky's food, training, and veterinary care. 


However, it should be a breed that is suitable for guarding, such as a Rottweiler or German Shepherd. 


A small dog, such as a Chihuahua, would hardly be regarded as a guard dog, either in the real world or for the purposes of the IRS.


Pest Control Cats

Assume you own a small-scale bakery, and you realize that the infestation pests in your place are increasing. 


You therefore decide to keep a cat named Whiskers by your side to help eliminate rodents from your establishment. 


If Whiskers helps keep your business place clean and safe from rodent infestation and helps to eliminate the unsanitary droppings too, you might be able to claim his food, litter, and veterinary expenses as part of your business pest control expenses. 


Maintaining good records of Whiskers' activities in relation to your business will help give good support toward your claims.


3. Charitable Deductions

If you foster animals, you may be eligible to claim charitable deductions on certain expenses. Here is how it works.

 

Fostering for a Registered Charity

For example, you often foster dogs for your neighborhood animal shelter. You invest in feed, vet bills, and supplies: leashes and bedding. 


If you foster the animals on behalf of a 501(c)(3), a tax-exempt organization, you can use some of those out-of-pocket expenses to help at tax time. 


But remember, your time is free. 

In addition, you cannot factor the value of your time or the space within your home.


For example, you care for three dogs in the year and spend $500 for food and vet bills; you will claim that as a charitable expense. 


You should ensure that you obtain a written acknowledgment from the shelter especially when the total expenses exceed $250 to support your claim.


While many of your pet's costs will be considered personal and non-deductible, there are exceptions that might help you claim tax deductions on your beloved pets. 


Be it through the law, usually through necessity for medical or a legitimate business use or charitable contribution, learning what these opportunities are will help you alleviate some cost burden in pet ownership and the companionship they bring into your life.

 

Always hire a tax professional to deal with the complexities of tax laws and help ensure that you obtain all possible deductions while remaining within the boundary of compliance. 


With a little planning and awareness, you can give your furry friends the best possible care without a corresponding large hole in your wallet!





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