A tax deduction for your pet?
We field all kinds of tax questions. A common one is “can I deduct my pet?” For the most part, the answer, is “no”. However, there are some possibilities to receive a deduction.
Can I Claim my Pet as a Dependent?
First, Let’s get this one out of the way. Unfortunately, no. Dependents must be a human, but it was worth a shot!
Deducting your Pet as a Medical Deduction
If your pet happens to be a service animal, you might be eligible for a tax deduction under the medical Expense deduction. To qualify, your medical expenses paid during the year must exceed 7.5% of your adjusted gross income. So, if your pet helps you in a medical capacity or performs certain services you could be able to deduct the costs associated with your pet. An example would be someone who is blind or hearing impaired that relies on a guide dog. Another example would be an emotional support animal. Like any tax deduction, documentation is important. Be sure to obtain documentation from your doctor outlining the need for your pet.
Claiming your Pet as a Business Deduction
Is your pet involved in your business? If so, you might be able to deduct the costs associated with your pet as a business deduction. Simply showing up to work with your pet or having an office cat is not enough. You will need to demonstrate your pet is both an ordinary and necessary business expense. Let’s look at some examples. A dentist office with a small fish tank in the waiting room designed to calm patients before their procedure would likely qualify. A daycare with a classroom hamster for the kids to learn about would likely qualify. A private security firm that needs security dogs would likely qualify. You will see there needs to be a legitimate business purpose for the pet in the business operations. Having a pet at work simply for convenience or enjoyment is not enough.
Charity Deductions for Pets
Do you foster pets or volunteer at a shelter? As long as the organization you are working with is a qualified nonprofit, you will be able to deduct your out-of-pocket expenses as a charity deduction. Unfortunately, your time is not deductible.
At ClarkSilva no tax question is off limit. Even the ones about your furry friends! Call us today for your consultation.