We all know that you can’t claim your dog as a dependent, regardless of how much a member of the family Rover is. We also know that you cannot write off your fur baby’s medical expenses, even if your dog has insurance. But did you know under certain circumstances you can write off some of your dog’s expenses?
If you require a service dog and you are blind, deaf, or disabled, the cost and upkeep of the dog are tax-deductible medical expenses (if you have enough deductions to itemize). Tax-deductible expenses include the cost of obtaining the dog, food, grooming, medical care, and any other costs that will maintain the health of the service dog. This also includes emotional support animals as long as the animal is used primarily to alleviate a physical or mental defect and would not have been purchased except for the illness.
When you own a business and your dog plays a security function, you may be able to write off some of Fido’s costs. This is also true for cats which provide rodent control or animals used in your advertising, While you can’t write off the cost of the animal, you can write off some of the costs of caring for the animal. The percentage of time worked is used in computing the deduction. Records should be maintained substantiating the hours worked and the expenses incurred. Also, be able to demonstrate how your animal helps your business.
If you show your dog or make money from your dog’s photograph or video, you could turn it into a business, deducting the costs of maintaining the dogs. Beware of the hobby loss rules, though, requiring the business to turn a profit for three of the last five years. Alternatively, if you can prove a business purpose and the venture is run as a business with the purpose of making a profit, you could satisfy the IRS requirements and treat it as a business and not a hobby.
You might think that the cost of adopting a dog from a non-profit center would be tax-deductible but sadly it is not. However, any donations in excess of the adoption fee, are deductible as a charitable contribution (if you itemize).
If you foster dogs for a non-profit center, though, you may be able to deduct the cost of food, medicines, veterinary bills, crates, toys, etc. If a specific area of the home is segregated and used exclusively for the care of the fostered dogs, a percentage of your home’s utilities, rent, interest, taxes, insurance, repairs, etc. could be deductible.
While many of these expenses are tax-deductible, be aware that many of them require you to itemize. With the 2018 Tax Cuts and Jobs Act (TCJA) raising the standard deduction, many of these deductions may not be utilized. Be sure to discuss any expenses discussed above with your tax advisor to see whether they would benefit your tax situation.