Still haven't mailed in your tax forms? Looking for that one last write-off that adds up to a big refund check for your household? You may have been tempted to claim your dog – and/or his expensive food and heartworm meds – as a "dependent minor." But jokes aside, some pet expenses do qualify as deductions.
A bill proposed back in 2009 would allow up to $3,500 to be deducted annually for pet expenses. H.R. 3501, the "Humanity and Pets Partnered through the Years" Act (HAPPY), wants to formalize the tax status of pets as family members. But the bill hasn't made much progress since its introduction despite endorsements from the Humane Society, the ASPCA, and other groups.
But can you position your pet as a tax break in the meantime? In a piece written last fall for Forbes.com, Robert W. Wood focuses on ways to get "good tax benefits" from pets (as well as love and companionship, of course). Wood cites a case filed in Tax Court by "self-described 'cat lady'" Jan Van Dusen, who has cared for as many as 70-80 feral cats on her property; after incurring unreimbursed expenses via her work with the cats for a non-profit group, Van Dusen took those expenses as charitable deductions. The IRS wasn't trying to hear that, rejecting the deductions, but Van Dusen protested to the Tax Court, which sided with her – and ruled that she could deduct 50 percent of her cleaning-supply and utility expenses, and 90 percent of her veterinary and pet-supply budget, as charitable contributions.
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But you don't necessarily have to house and feed dozens of kitties to qualify for similar deductions. Among the possible write-offs available to those who live and work with pets, according to Wood and the Wall Street Journal's Laura Saunders:
Moving expenses. While the cost of moving a pet is usually small compared to the overall bill, you can sometimes deduct that part. Visit the IRS website for more information (look for Publication 521).
Business expenses. Wood mentions dogs used for security as the most obvious example of this sort of expense, but also says that "[t]he business expense category is a wide one as long as your record-keeping and documentation is good." Obviously, you should consult with your accountant before assuming that your bookstore cat constitutes a "marketing cost."
Service dogs. Guide dogs and other animal aids qualify as medical deductions, though Wood warns that these deductions "often turn out not to yield tax savings."
Estate settlements. Caring for a pet while the deceased owner's estate is settled could qualify as a deduction "if the animal has monetary value" – like a show dog or other purebred. A guard dog on estate property could also qualify.
We urge you not to perpetrate any frauds by pretending Fluffy is your tween daughter to pick up a human-child tax credit – but if you've provided materials or spent money to help animals via non-profits, or fostered pets at your own expense, ask your tax preparer if you can claim those expenses, and any others, as deductions.
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