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5 Ways Animals Can Save You Money on Taxes

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Every year when tax season rolls around we ask ourselves the same question: Can we deduct any of our pet-related expenses? With April fast approaching, we thought we’d do some research.

First, the bad news. Though we certainly consider our pets to be full-fledged family members, there’s one important entity that does not—the IRS. But while you can’t claim your pet as a dependent (bummer, huh?) there are some instances where you can deduct pet expenses.

Service or therapy animals

If you have a trained and certified service dog, therapy dog, or other service or therapy animal to assist you with a disability, under IRS Publication 502 you are able to deduct expenses related to the cost of buying, training, and maintaining him or her. Be sure to keep your medical records well organized so that you can provide substantive proof if required.

Relocation costs

The IRS already allows you to deduct moving costs in certain scenarios, and lucky for relocating pet parents, under IRS Publication 521 this includes expenses related to pets. Moving costs are not itemized, so you can lump pet expenses in with your entire relocation amount. Costs include transporting your pet, extra care needs, or any medical fees associated with the move.

Fostering

Taking an animal into your care while they await their forever home is a wonderful gift, but it’s not always cheap. Per the results of tax case Van Dusen v. Commissioner, a foster parent can claim any unreimbursed expenses for fostering done for a 501(c)(3) designated not-for-profit animal rescue organization. This includes food, veterinary care, and even utilities for the portion of the home used for the animal’s care. You can also claim 14 cents per mile driven related to the foster animal. Keep good records—you may be asked to show a detailed breakdown of these expenses.

Donations to animal causes

Any donation of funds, goods, or services to a 501(c)(3) animal charity is tax deductible provided that no goods or services were received in return (so the fee you paid to adopt your pet turtle is not deductible, but anything you donated in addition would be). Always ask for a donation receipt, especially if the value of your donation is more than $250. Charitable contributions can be deducted on Form 1040, under Schedule A.

Hobby expenses

If your pet’s hobby earns you cash (think dog shows, agility events, or social media stardom) then that money becomes taxable income. As such, you can deduct hobby-related expenses (transportation, hotels, cute outfits) on your tax return, provided the total amount exceeds 2% of your adjusted gross income. Again, keep all related documents, just in case. No IRS auditor wants to hear, “My dog ate my receipts….”

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