Can Your Dog Fetch You a Tax Deduction?

When it comes to deducting pets or pet expenses on taxes, like just about any question that begins ‘Can I deduct,’ the answer is ‘It depends.’

NEW YORK (MainStreet) — Over the years many clients have asked me, most of them jokingly, if they can deduct the costs of keeping their dog or cat. One would think the obvious answer is no (and certainly not as a “dependent”). But when it comes to deducting pets or pet expenses — like just about any question that begins “Can I deduct” — the answer is “It depends.”

>> Start Your FREE E-file

What about the owners of the cat who plays Morris in the TV commercials, or Moose, the dog who played Eddie on Frasier? And pet breeders who sell the purebred offsprings of their pets, or, as with horses, charge a stud fee for mating with another purebred? The animals generate business income for their owners, so related ordinary and necessary expenses are deductible.

I’ve seen a business deduction allowed for cat food used by a scrapyard owner to attract wild cats who chased away mice and snakes from the yard, and for the costs of guard dogs.

And did you know you can deduct the cost of moving the family pet to a new home? It’s true, if the move is job related and meets certain tests.

The IRS tells us:

“You can include in medical expenses the costs of buying, training and maintaining a guide dog or other service animal to assist a visually impaired or hearing-impaired person, or a person with other physical disabilities. In general, this includes any costs, such as food, grooming and veterinary care, incurred in maintaining the health and vitality of the service animal so that it may perform its duties.”

Expenses incurred by a person who raises guide dogs for a charitable organization, such as Guide Dogs for the Blind, can claim an itemized deduction.

If you foster or rescue animals for an IRS-approved charity, your expenses for food, litter and veterinary bills may be deductible. In June 2011 the Tax Court upheld a charitable deduction for unreimbursed out-of-pocket expenses incurred by a woman while taking care of cats in her home for the organization Fix Our Ferals.

And if you elect to deduct state and local sales tax instead of state and local income tax on Schedule A, you may be able to deduct the sales tax paid on pet food.

 

---