Can You Claim Your Dog On Your Taxes?
This is a re-post from March 2020 but since tax season is upon us, I thought I’d share incase some of you missed it.
This post might be a little late for some of you, but I thought about it today and did some research. Can you claim your dog on your taxes? I have always been told “no” but wondered…are there any loop holes?? Now that Jake and Maggie are certified therapy dogs, I wondered if this might benefit us during tax season.
And….the answer is no! While service dogs do qualify for some tax deductions, a certified therapy dog does not. But not all is lost. There are some ways you can benefit at tax season and here are a few. This link https://digitalcommons.gardner-webb.edu/cgi/viewcontent.cgi?article=1009&context=jcp has some very detailed information on Introduction to Animal Therapy and its Related Tax Benefits.
"Proud To Be A Dog Mom"
Donating to charities:
You cannot claim your adoption fees for a new pet but you can donate to a charity such as Joey’s P.A.W. Any charitable donations of cash or property that you make to these organizations separate from adoption can indeed be claimed. So whether you attend a fundraising event or give straight from your wallet, donating to organizations that help less fortunate dogs is a good way to rack up karma points and tax breaks. Just be sure to keep receipts for donations and confirm the recipient is a qualified organization under IRS rules.
Is your pup a social media influencer?
Does he make money starring in ads, movies or TV shows? There is one caveat, of course; as of 2017, you may no longer deduct miscellaneous expenses for your “hobby,” unless the main purpose is to make money. In order to claim those tax credits for your canine star, you should set up an official business entity (a corporation, LLC or DBA). Be diligent in keeping good records:
• Keeping good records.
• Researching profit-making opportunities.
• Having expertise in the area or hiring an expert.
• Spending enough time at it to justify it as a business activity.
• Showing a track record of success in other ventures.
• Creating large profits from time to time and attributing losses to unusual events.
Do you foster a dog through a qualified charitable organization?
If you foster dogs for a qualified charitable organization, you can deduct the cost of caring for them, as long as you aren’t being reimbursed for those charges elsewhere. That means the expenses you incur while caring for pups in search of a home such as pet food, supplies, transportation and veterinary bill can essentially disappear.
There are a few requirements before you can write off all that kibble:
• You must work with a 501(c)(3) charity to claim a deduction for foster expenses. Although fostering a stray is a noble endeavor, the government won’t reimburse a penny unless you are partnered with a registered non-profit.
• Only expenses that can be directly tied to the cost of caring for fosters can be deducted. If you have “furever” pets in your home, you must buy their food and supplies separately from those belonging to the temporary four-legged residents.
• Expenses deducted must be related to the care of the foster pups. Qualifying expenses may include food, vet visits, trash bags, puppy pads, pens, dog bowls, dog shampoo and conditioner, etc. And always keep receipts!
Do you own a pet related business?
Do you pet sit, have a doggie daycare, or are a veterinarian, among a long list of pet related jobs? Do you have a side hustle as a trainer? Your qualifying deductible expenses will include things like puppy food, leashes and poop bags. Whether you own and operate a pet store, a veterinarian office, doggy daycare facility or grooming salon, or have a side-hustle as a pet sitter, trainer or dog-walker, you can deduct your expenses as long as it’s a registered business. You may even be able to deduct mileage or transportation costs for visiting your canine clients. As with any job-related expense, be sure to keep all receipts and be able to prove the items were for job duties and not your personal pets.
Are you a member of the armed forces?
The recently signed Tax Cuts and Jobs Act brought many significant changes to the laws. Prior to the new reform, because Fido was included as a part of your “household,” you could deduct the cost of transporting him to your new home if you were moving to a different city to start or look for work. Although the new tax changes mean moving expenses are no longer deductible for the majority of us, members of the Armed Forces are still qualified to claim the moving expense deduction (including the cost of relocating their canines) on federal taxes. Also, some states still allow civilians to claim moving expenses on their state tax returns.
Is your pet a business animal?
Working dogs and cats can be eligible for deductions to cover their living expenses, including food, veterinary care and training related to their jobs. Some animals that could qualify include security dogs protecting a place of business, or a cat employed to control rodents at workplace, particularly when hiring animals for these services is common in your field. In a limited amount of circumstances, this would be acceptable to the IRS, but documentation is very important. You need to demonstrate a need for the animal and maintain really good records, such as a diary or log book of their hours worked.
Do you have a pet trust?
If you haven’t created a plan for your pup if you pass, the tax benefits might be an incentive to do so. Choosing a godparent for your dog is a good place to begin, but setting up a legal trust is the most dependable way to ensure Fido gets the care you want for him after you’re gone. While all states have laws that allow for pet trusts, establishing one for your four-legged beneficiary doesn’t mean zero taxes. Depending on how the trust is structured, the party responsible for paying those taxes could be you, the human trust beneficiary (typically the person named as his caregiver), or the trust itself. As there are different types of taxes at both the state and federal level that may affect your decisions, you should consult an attorney in order to set up a pet trust that makes the most sense for your circumstance.
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