• Mortgages
    Get the Best Rates
    • Mortgage rates
    • Refinance rates
    • Post FED Announcement Rates
    • 30-year mortgage rates
    • 15-year mortgage rates
    • 20-year mortgage rates
    • 10-year mortgage rates
    • Mortgage lender reviews
    Use Calculators
    • Mortgage calculator
    • How much house can you afford?
    • Mortgage refinance calculator
    • Mortgage payment calculator
    • Amortization calculator
    • All mortgage calculators
    Get Advice
    • FED announcement impact on rates
    • What to know about reverse mortgages
    • Home buying guide
    • Refinance your mortgage
    • First-time homebuyer loans and programs
    • Prepaying your mortgage
    • Your guide to FHA loans
    • Everything to know about VA loans
  • Homes
    Home Buying
    • Determine your budget
    • Find your home
    • Get prequalified
    Get Advice
    • Step-By-Step Homebuying Guide
    • First-Time Homebuyer's Guide
    • How Does Rent-To-Own Work?
    • What To Look For When Buying A Home
    • Homebuyer Mistakes To Avoid
    Learn How To
    • Make An Offer On A House
    • Decide Between Renting vs. Buying
    • Ace the Final Walk-Through
    • Find The Best Real Estate Agent
    • Buying A Second Home
    Use Calculators
    • How Much House Can I Afford?
    • Rent Vs. Buy Calculator
    • Cost of Living Calculator
    • How Much Should I Put Down?
  • Banking
    Compare Accounts
    • CD rates
    • Savings accounts
    • Money market accounts
    • 1-Year CD rates
    • 3-Year CD rates
    • 5-Year CD rates
    • Checking accounts
    • Bank ratings
    Use Calculators
    • Savings calculator
    • CD calculator
    • Compound savings calculator
    • All banking calculators
    Get Advice
    • How to save money
    • Federal Reserve news
    • What is a money market account?
    • Which certificate of deposit account is best?
    • How to open a savings account
    Bank Reviews
    • Capital One Bank
    • Marcus by Goldman Sachs
    • American Express National Bank
    • CIT Bank
    • Synchrony Bank
    • Barclays Bank
    • All Bank Reviews
  • Credit Cards
    Compare by Category
    • Best Credit Cards of 2019
    • Rewards
    • Travel
    • Airline
    • Cash Back
    • No Annual Fee
    • Balance Transfer
    • 0% APR
    • Business
    • Student
    Compare by Credit Needed
    • Excellent Credit
    • Good Credit
    • Fair Credit
    • Bad Credit
    • No Credit History
    • Secured Credit Cards
    Compare by Issuer
    • American Express
    • Bank of America
    • Capital One
    • Chase
    • Citi
    • Discover
    • Wells Fargo
    Get Advice
    • Credit Card Reviews
    • Credit Card Payoff Calculator
    • Balance Transfer Calculator
    • All Credit Card Calculators
  • Loans
    Compare Lenders
    • Personal loan rates
    • Personal loan reviews
    • Auto loan rates
    • Student loan rates
    • Student loan reviews
    Loan Types
    • Personal loans
    • Auto loans
    • Debt consolidation loans
    • Home improvement loans
    • Student loans
    • Medical loans
    • Bad credit loans
    Use Calculators
    • Loan calculator
    • Auto loan calculator
    • Personal loan calculator
    • Auto refinance calculator
    • Loan payment calculator
    • Student loan calculator
    • All calculators
    Get Advice
    • Student loans guide
    • Refinancing student loans
    • Refinancing personal loans
    • Refinancing auto loans
    • How to get a personal loan
    • Personal loan origination fees
  • Investing
    Best of
    • Best Investments
    • Best online brokers for stocks
    • Best online brokers for beginners
    • Best online brokers for mutual funds
    Brokerage Reviews
    • TD Ameritrade Review
    • Merrill Edge Review
    • Ally Invest Review
    • Fidelity Review
    • Charles Schwab Review
    • Vanguard Review
    • Interactive Brokers Review
    • Robinhood Review
    • Tradestation Review
    • E*Trade Review
    • WellsTrade Review
    • All Brokerage Reviews
    Use Calculators
    • Investment Earnings Calculator
    • Annuity Calculator
    • All Investing & CD Calculators
    Get Advice
    • Compare Online Brokerages
    • What is the long-term capital gains tax?
    • Passive income: What it is and 5 ideas for 2019
    • How to buy stocks
  • Home Equity
    Compare Lenders
    • Home equity loan rates
    • Home equity line of credit rates
    • Home equity lender reviews
    Use Calculators
    • Home Equity Calculator
    • Loan vs. Line Of Credit Calculator
    • Debt consolidation calculator
    • HELOC payoff calculator
    • All home equity calculators
    Get Advice
    • What is a home equity loan?
    • HELOC vs. Home equity loan
    • Consolidate your debt using home equity
    • Home equity loans with bad credit
  • Insurance
    Insurance Types
    • Car insurance
    • Homeowner's insurance
    • Health insurance
    • Life insurance
    Best of
    • Best Car Insurance Companies
    • Best Home Insurance Companies
    • Best Cheap Car Insurance
    • Top Car Insurance Comparison
    Company Reviews
    • Geico Insurance
    • State Farm Insurance
    • Progressive Insurance
    • Allstate Insurance
    • Liberty Mutual Insurance
    • Nationwide Insurance
    • The General Insurance
    • Farmers Insurance
    • American Family Insurance
    • Erie Insurance
    • Amica Insurance
    • Travelers Insurance
    Insurance by State
    • Car Insurance California
    • Car Insurance Florida
    • Car Insurance Georgia
    • Car Insurance Michigan
    • Car Insurance New Jersey
    • Car Insurance New York
    • Car Insurance North Carolina
    • Car Insurance Pennsylvania
    • Car Insurance Texas
    • Home Insurance Florida
    • Home Insurance Texas
  • Personal Finance
    Compare
    • Current interest rates
    • Compare rates
    Use Calculators
    • Debt consolidation calculator
    • Net worth calculator
    • Personal finance calculators
    • Cost of living calculator
    • All calculators
    Get Advice
    • Retirement advice
    • Debt management
    • Improve your credit score
    • Career resources
    • Tax advice
    • Insurance basics
    • Real estate tips
    • Personal finance glossary
  • Retirement
    Get Advice
    • Best Roth IRA accounts
    • Best retirement plans
    • How to open a Roth IRA
    • 401(k) rollover guide
    • Roth IRA vs. Roth 401(k)
    Use Calculators
    • 401(k) retirement calculator
    • Retirement savings calculator
    • Roth IRA calculator
    • IRA minimum distribution calculator
    • Social security benefits calculator
    • All retirement calculators
    More Information
    • What is an IRA?
    • What is a Roth 401(k)?
    • 401(k) contribution limits
    • Contributing to IRA during retirement
    • Best age for Social Security retirement benefits
    • Roth IRA 5 year rule
  • Create Account
  • Dashboard
  • Alerts
  • Settings
  • Support
  • Logout
Share

5 pet-related tax write-offs

Kay Bell @taxtweet
December 10, 2019  in  Taxes

1 of 6

Husky puppy giving a high five
ANURAK PONGPATIMET/Shutterstock

5 pet related tax write-offs

It’s not unusual for pet owners to consider their domesticated animals as members of the family.

The IRS disagrees. That’s why the taxman won’t let you claim your dog, cat, guinea pig or whatever critter brightens up your life as a dependent.

Market research by the American Pet Products Association found that U.S. pet owners spent a record-breaking $72.56 billion on their animals in 2018.

Many of those dollars go each year to veterinarians. But again, the IRS says “no” at tax time. You generally can’t count those bills as itemized medical deductions.

However, the Internal Revenue Code does allow a few instances where you can write off some pet costs.

When you put a pet to work, you may be able to deduct business expenses. And if your love for animals translates philanthropically, you can probably write that off, too.

Here’s a closer look at these five pet-related tax write-offs.

The Bankrate Daily

2 of 6

veterinarian talking to woman with cat
Hero Images/Getty Images

1. Medical deduction

Because of the higher standard deduction created by the Tax Cuts and Jobs Act of 2017, medical expenses have gotten harder to claim. For the 2019 tax year, your health care costs must exceed 10 percent of your adjusted gross income. For the 2017 and 2018 tax year, this threshold was lowered to 7.5 percent of AGI.

It sure would be nice if you could add in your furry pet’s veterinary charges. Sorry, that’s not going to happen. But the IRS does say in Publication 502 that if you need a guide dog to compensate for your reduced vision or hearing, you can include the costs of buying, training and maintaining that animal in medical expenses.

In general, this includes such things as food, grooming and veterinary care that is necessary to make sure the animal is healthy enough to perform its assistance duties.

If you’ve been diagnosed with a physical or mental condition that benefits from the attention of a trained therapy animal, those costs also count as a medical expense.

Note, however, this doesn’t cover your loving cat that comforts you when he curls up in your lap. The animal must be trained or certified as treatment for a diagnosed illness or condition for the IRS to approve the deduction.

3 of 6

Woman working in office with dog
Barbara Brady-Smith/Getty Images

2. Business animals

That “beware of dog” sign in your business’s window is no idle threat. Break-ins have stopped since you set up a place for your Rottweiler to stay overnight.

In this case, the IRS would likely be amenable to business deduction claims of the animal’s work-related expenses.

Standard business deduction rules still apply, notably that the cost of keeping an animal on work premises is ordinary and necessary in your line of business. Once you show that, the dollars spent each year keeping your pooch in good guard condition — food, vet bills and training — would be deductible as a business expense.

As with all deductions, be prepared to provide full and accurate records of your animal’s hours on the job. You’ll also find your tax claim more acceptable when you demonstrate how the animal protects your livelihood’s inventory.

Keep in mind, too, that your claims carry more weight when your pet is a breed that’s typically used for such jobs. So even though your Chihuahua has a loud bark, your tax claim is more credible if your guard dog is a German Shepherd, Doberman Pinscher or a similar imposing breed.

4 of 6

dog waker walking group of dogs
a katz/Shutterstock

3. Change hobby to for-profit business

You posted some exceptionally cute dog videos on YouTube and managed to attract a following, along with some ad revenues. You might consider this a hobby, but hobby expenses are no longer deductible, thanks to the Tax Cuts and Jobs Act of 2017.

Before the tax law went into effect, you could deduct your hobby’s expenses to offset any hobby earnings. However, those expenses were considered a miscellaneous deduction, which could only be used if they exceeded 2 percent of your adjusted gross income. But with the disappearance of miscellaneous deductions, hobby expenses are no longer deductible.

However, if you turn your fun pastime into a for-profit business, you can deduct your legitimate business expenses, even if the business is often a money loser. Generally, to escape unwanted attention from the IRS, your business earnings should exceed expenses for three out of five years. But even if they don’t, you can prove that you’re trying to make a go of your business by:

  • Keeping good records.
  • Researching profit-making opportunities.
  • Having expertise in the area or hiring an expert.
  • Spending enough time at it to justify it as a business activity.
  • Showing a track record of success in other ventures.
  • Creating large profits from time to time and attributing losses to unusual events.

5 of 6

kittens in shelter for homeless animals
Okssi/Shutterstock

4. Charitable deductions

You got your cat from a shelter, where she was dropped off by a previous owner who couldn’t care for her any longer. If no one had adopted her, she might have faced euthanasia.

Such rescue animals hold a special place in your heart. And besides donating to these animal-shelter nonprofits, you also volunteer your time.

Be sure to keep track of your pet protection expenses. They could count as a charitable donation.

Unreimbursed expenses for fostering a pet for an IRS qualified 501(c)(3) adoption organization can be deducted. This includes the usual costs for pet food, supplies and veterinary bills. You can also deduct 14 cents per mile for trips made to further the shelter’s work.

Add up the costs, along with direct donations to a rescue group, and itemize them under the charity section of Schedule A. Of course, you first have to determine if your itemized deductions exceed the standard deduction amount before deciding to itemize.

Make sure, though, that you keep good records. In 2011, an Oakland, California, woman won a tax court judgment that allowed her to claim many cat rescue expenses on her 2004 tax return, including the usual care costs, a portion of her utility bills and even such things as paper towels and garbage bags.

But her $12,068 deduction was reduced because she didn’t have all the related receipts, especially for items costing $250 or more. She also lacked a valid letter from the feline charity acknowledging her volunteer work.

6 of 6

Husky puppy giving a high five
ANURAK PONGPATIMET/Shutterstock

5. Pet trusts

Pets sometimes live longer than their owners. Many pet owners include their pets in their wills. Others opt to establish trusts for their pets’ care.

Texas Tech University School of Law professor Gerry W. Beyer specializes in estates, wills and trusts. Since he wrote his first legal article on pet trusts 18 years ago, Beyer has seen the field go from an obscure legal move that very few folks talked about to a “pretty well-accepted” part of estate planning.

All states have laws that allow for pet trusts, says Beyer.

You don’t have to be wealthy to set up a pet trust. Beyer does advise, though, working with an attorney who specializes in these types of legal final wishes.

And note that a trust doesn’t mean zero tax concerns. Beyer says that depending on how the trust is structured, the responsible tax party could be the pet owner in the case of a living trust; the trust beneficiary, who typically is the pet’s caregiver; or the trust itself.

Still, a trust is a dependable way to ensure your pet gets the care you want the animal to have after you’re gone. “You get certainty,” says Beyer.

Learn more:

  • 10 best tips to prepare for tax-filing season
  • You should never deduct these expenses, but you can write off some related costs
  • 10 steps you can take right now to reduce your tax bill 

You may also like

  • Tax law changes mean inflation adjustments

  • 2015 mileage deductions up and down

  • Some tax breaks made permanent

  • Holiday season is tax scam season

  • Special tax rule for NYPD donations

  • Taxes + spending = last-minute legislative rush

  • About Us
  • Press Room
  • Contact Us
  • Careers
  • Advertise With Us
  • Latest News
  • Popular Topics
  • Glossary
  • Compare Rates
  • Understand Bankrate's Averages
  • Privacy Policy / Your California Privacy Rights
  • Terms of Use
  • GLBA Annual Notice
  • Licenses
  • Sitemap
How we make money

Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate is compensated in exchange for featured placement of sponsored products and services, or your clicking on links posted on this website. This compensation may impact how, where and in what order products appear. Bankrate.com does not include all companies or all available products.

Maximize Your Money. Get Expert Advice & Tools. Master Life's Financial Journey.

You have money questions. Bankrate has answers. Our experts have been helping you master your money for four decades.

Our tools, rates and advice help no matter where you are on life’s financial journey.

Facebook logo Twitter logo
Follow Us

Bankrate, LLC NMLS ID# 1427381 | NMLS Consumer Access
BR Tech Services, Inc NMLS ID# 1743443 | NMLS Consumer Access
© 2019 Bankrate, LLC a Red Ventures Company All Rights Reserved.

United States United Kingdom