When tax season rolls around every year, many pet owners wonder if they can get a tax break for their furry companions – after all, “pet parents” often consider their fur babies to be as much a part of the family as actual children.
Pet expenses are big business in the United States. Charlotte NBC affiliate WCNC noted that Americans spent $109 billion on pets, pet services, and pet products in 2023. While the average pet owner won’t qualify for tax deductions related to their pets, there are some exceptions worth exploring.
Service Animals and Medical Expenses
Service animals play a crucial role in the lives of individuals with disabilities, providing essential support and assistance. If you require a guide, service, or therapy animal due to a diagnosed medical condition, such as blindness, epilepsy, or anxiety, you may be eligible to deduct the cost of their care as a medical expense on your taxes.
This typically includes expenses like grooming, food, veterinary care, and training. However, it’s important to note that your pet must be certified and trained as a service animal to qualify for this deduction.
Guard Dogs for Business Use
If you use a guard dog primarily for business purposes, you may be legally allowed to deduct the cost of their care as a business expense. While you CAN’T deduct the cost of purchasing the dog itself, you may be eligible to deduct expenses such as food, training, boarding, and medical care.
This deduction applies to expenses incurred during the dog’s working hours and is limited to the dog’s business-related activities. For example, you cannot deduct costs associated with traveling with your dog for personal activities like a family vacation.
Pet Fostering and Charitable Contributions
Volunteering with a service animal agency or pet rescue organization can also have tax benefits. If you foster pets in your home or on your property, you may be eligible to claim deductions for unreimbursed expenses related to their care. This includes the overall cost of food, shelter, veterinary bills, grooming costs, litter, and bedding materials.
These expenses typically qualify as charitable donations and are deductible up to 50 percent of your adjusted gross income.
Professional Breeders and Law Enforcement Handlers
Professional breeders and law enforcement dog handlers may also qualify for tax deductions related to their pets. Smart Asset notes that breeders can deduct expenses like food, medical bills, boarding costs, advertising, and other business-related expenses.
Similarly, law enforcement handlers may deduct expenses associated with maintaining a police dog, such as food and kennel expenses, if they’re not reimbursed through their job.
The keys to claiming deductions for pet-related expenses are careful documentation and professional assistance. Keep detailed records of anything you spend on pet-related items – including receipts and invoices – to support your deductions. Whether your pet serves a medical or business-related purpose, your tax professional will need proper documentation to successfully claim the federal and state tax deductions to which you are entitled.
Although the average pet owner may not qualify for tax deductions related to their pets, there are certain circumstances where deductions may be available. By understanding the rules and requirements for each deduction category and maintaining thorough records of your expenses, you can maximize your tax benefits while providing the best care for your furry companions. Remember, consulting with a financial advisor can provide valuable guidance and assistance in optimizing your complete tax strategy.
If you have any questions, please contact our office at (503) 224-5321. Isler Northwest LLC is a firm of business advisors and CPAs in Portland, Oregon. Our service goal at Isler Northwest is to earn our clients’ trust as their primary business and financial advisor.
Isler Northwest
(503) 224-5321
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Portland, Oregon 97201
