It's a smart question for pet owners: if you have adopted a dog or are fostering pets, are veterinary bills or other pet expenses tax deductible?
While many of us feel that are pets are dependent upon us in the same way that human children might be, the tax laws don't view pets in the same way. However, there are a few circumstances where some pets and their expenses are tax deductible in the eyes of the IRS.
Tax breaks with pets
There is one surefire way to make your veterinary bills and other expenses tax deductible, and that is for them to be a business expense. According to Forbes, valid expenses can be deducted for animals that provide a "service" for the business, such as a guard dog or a "mouser" cat "employed" for rodent control, and generally it must live full-time on the business premises. Forbes warns, though, that you might have a hard time convincing an IRS auditor that your cat is actually an "employee."
Other business possibilities are pets that model or act, or somehow otherwise bring in income. If you have a hobby related to your pets, such as participating in obstacle course events, you can deduct expenses related to those efforts as part of the IRS's hobby loss rule assuming that you meet the qualifications and keep records of your expenses.
Service animal deductions
Consumer Reports states that pet owners can deduct veterinary bills or other expenses related to buying, maintaining, and training a service dog or other service animals if you are visually impaired, hearing-disabled, or have another physical disability. Additional deductions food, grooming, and veterinary bills are deductible using IRS Publication 502, Medical and Dental Expenses. These deductions do not apply to a therapy or "comfort" animal, however.
Donations to rescue groups
As pet owners, you naturally want to support organizations that in turn provide support to animals. If you adopted a dog, the cost to adopt an animal from a shelter is not tax deductible, donations made to animal rescue groups are tax deductible, provided they meet the IRS's requirements. The IRS only considers a donation a legitimate tax deduction if it is given to a qualified organization. See IRS Publication 526, Charitable Contributions, for rules on what they consider a qualified organization.
According to AARP, expenses related to fostering pets can be tax deductible. The costs of housing and caring for a foster pet, including food, supplies, veterinary bills and up to 14 cents a mile for travel related to the foster work, are deductible. However, the Michelson Found Animals organization encourages pet fosterers who want to make tax deductible donations to be sure they are fostering through an IRS-qualified organization.
There are many animal charities, but not all animal charities are nonprofit organizations that have received tax-exempt status from the federal government. Further, the fostering expense must be directly related to caring for foster animals. In other words, says Michelson Found Animals, you may not deduct rent or mortgage, but you can deduct veterinary bills, pet supplies (litter boxes, leashes), a portion of cleaning supplies if your cleaning expenses went up due to caring for foster pets, and a portion of utility bills if your utility bills went up due to foster pets (for example, if you're heating a spare room where your foster puppies have a bed).
Whether you're deducting as part of a hobby pet business, or you have a commercial breeding operation, or you're fostering puppies and kittens for your local rescue, the key to tax deductions is keeping records of your expenses. Also, rules change on what is tax deductible on a regular basis, so consult with a tax professional on your particular situation and what records you need to keep.
The IRS has a few requirements for substantiating charitable contributions. For instance, one of the rules is that the donor must keep a bank record or written communication from the donee as a record of the contribution. Donations in excess of $250 have further complications. You must also keep a written acknowledgment of the charitable contribution, which you must get no later than the date the donor files the return for the year the contribution is made, among other requirements.
A pet does not count as a dependent, so pet costs are not tax deductible in that way. However, there are a few special circumstances in which your pet expenses may be tax deductible, such as if your pet brings in income, if you are disabled and have a service dog, and fostering pets through an IRS-qualified organization. Be sure to check with the adoption group and, if possible, with the IRS, before trying to claim any tax deductions for your pet.
- IRS: Hobby or Business?
- Forbes: You Can Deduct Pet-Related Expenses On Your Tax Return (Sometimes)
- IRS: Publication 502 (2018), Medical and Dental Expenses
- IRS: Eight Tips for Deducting Charitable Contributions
- IRS: Publication 526
- Michelson Found Animals: Tax Deductions for Fostering Dogs and Cats
- IRS: Substantiating Charitable Contributions