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Friday, October 12, 2012

Tax Deductions for your Puppy or Dog

A guide dog for someone with a visual, hearing or physical impairment is a tax-deductible expenses.  Labrador Retrievers often work as guide dogs.
Can I get a Tax Deduction for my Dog or Puppy?

As we start thinking about the upcoming tax season, dog owners often wonder: Can I claim the expenses for my dog like food, vaccines, medical expenses as a deduction on my taxes?  The answer is: sometimes.  Sorry that I can't give you a resounding yes but the reality is that the IRS only permits deductions that are related to some specific business, health or charity related areas.  Here are some of the permitted deductions that you may be eligible to claim on your taxes:

Business Related Expenses for Your Puppy or Dog

1) Moving Your Dog or other Pet: In general, if you are changing jobs and moving, you can deduct the cost of moving - including the cost of moving your pet - from your taxes.  The IRS views your dog or other pet as one of your personal effects.  

2) If your Dog Guards your Business or Home: If you have a dog guarding your business, you should be able to deduct the expenses for food and medical expenses for the dog.  Although the IRS does not permit deductions for the cost of purchase or adoption of the dog, they may permit a deduction for depreciation of value as determined by a local breeder,   If the dog guards your home, it is a little harder to claim, but if you have property of value (i.e., car, boat, motorcycle, etc.) and your property is fenced and your dog is inside that fence, you should be able to claim a deduction.  Although if your pup is inside the house, it is likely that you could not claim that he or she is a "guard dog" - as ferocious as their bark might be!  Additionally, the IRS is much more likely to allow this deduction if your dog is a guarding breed such as a German Shepherd, Belgian Malinois, American Bulldog, Mastiff; if you have a small dog like a terrier or a Dachshund, odds are good that the IRS will not let it fly!

If your business uses a guard dog, such as this America Bulldog, to guard your business or valuable property, you can claim related costs like food and medical expenses.

- Note that the deduction is only for the percentage of time that the dog spends guarding your property!

3) Working Dogs: If you have a dog that does a specific job for your business, you can likely deduct the expenses related to his or her food and medical care.  These types of dogs would be: sheep herders if you have a farm; ratters (like terriers) if you have a farm or property that has pest control needs and that is what the dog does there; hunting dogs if your business is as a hunting guide; or, dogs that pull a cart for your business.  It is important that your business is dog-dependent so that these deductions will be permitted.

Health Related Expenses for Your Puppy or Dog

1) Guide Dog or Service Animal: The tax code is pretty specific on this one, but if you have a guide dog or service animal (including service animals that are not dogs like monkeys, pigs, etc.) you are permitted to deduct the expenses related to the buying, training and maintenance of the dog or other animal.  These are considered Medical Expenses are are deductible.  This would include expenses for food, grooming and medical care, but it is limited to guide dogs or service animals for people with visual impairments, hearing impairments or a person with another physical disability. 

Charity Related Expenses for Your Puppy or Dog

1) Donations to Dog Rescue Groups that are registered Non-Profits: If you make a donation of cash, dog food, Heartguard or other heartworm medicine, bedding, dog houses, crates, flea medicine, medical services or medical supplies to a Rescue Group that is a registered Non-Profit with 501 (c) 3 status, you can deduct that value of your donation although it is best to keep your receipts or donation acknowledgement just in case you are audited. The Rescue Group that I work with, This is the Dog!, will provide letters acknowledging the amount of your cash donation at the donor's request, as will most other reputable groups.  Be sure to get a donation acknowledgement letter or other form of receipt proving that no goods or services were provided in exchange for your donation.

- You can search for charities (non-profits) that are registered with the IRS to make sure the group is all squared away legally so your donation is deductible. 

2) Fostering a Rescue Dog or Puppy (or many dogs or puppies!):  The IRS is now subject to a June 2011 ruling that expenses related to fostering or rescuing stray or abandoned animals are deductible IF you are working with a registered Non-Profit with 501 (c) 3 status.  It is important to keep good records of all of the expenses related to rescue in order to itemize your deduction and as back up in case of an audit.  If you are working to further the mission of a registered non-profit and are not reimbursed, you can deduct the cost of the following items related to foster and rescue:
- food
- vaccines
- bedding and towels
- crates or other housing (dog house, kennel, etc.)
- cleaning supplies used for the foster or rescue animal (think: Bitter Apple spray or cleaners specifically for urine)
- veterinary bills
- Note that you can NOT deduct the cost of your time as volunteer work (time-wise) is not a deductible expense. 

Non-Deductible Expenses

1) Dog tags or licenses: You can not take a deduction for any dog tag or license that you are required to purchase by your city, county or state.

2) Cost of Adoption: The base cost of adoption is not a deductible expense even if you adopt from a registered non-profit with 501 (c) 3 status.  However, if you donate above the adoption cost, then you can deduct that amount. 

3) Veterinary Expenses for a Pet or Companion Animal: I know it can be expensive, but it is a cost you just have to eat because the IRS only allows deductions for medical costs for humans.  The exceptions are above (i.e., guide dog, guard dog, working dog).

I am not a tax professional or a CPA, so please consult with your tax preparer or CPA before claiming any of the above deductions.  Gemma Torcivia signing off, and by the way: spay and neuter your pets!

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