Tax-Deductible Savings for Pet Owners

tax breaks for pet owners

Story at-a-glance -

  • Even though you love your pooch or kitty as much as a child, there’s no tax exemption for having a pet “dependent”
  • There are cases when pet-related costs do qualify for tax breaks, including if you have a physical or mental disability that requires the assistance of a certified service animal
  • Expenses related to using a guard dog to protect your business or a cat to control pests at a workplace may also qualify for a tax deduction
  • If you foster animals for a nonprofit organization, or make donations of food and other items, related expenses may qualify as charitable contributions
  • In some cases, you can deduct expenses related to a hobby that involves your pet (provided you earned income at it) as well as costs incurred by moving with your pet, provided the move was work-related

By Dr. Karen Shaw Becker

Your family pet brings priceless love, affection and laughs to your life, along with a fair share of expenses for food, veterinary care and other supplies. Usually, these expenses aren't considered tax deductible by the Internal Revenue Service (IRS). Even though you love your pooch or kitty as much as a child, there's no tax exemption for having a pet "dependent."

Many pet owners disagree; in a survey by Credit Karma Tax, 45 percent of pet owners said they wish they could claim their pets as dependents on their tax returns.1 That being said, there are cases when pet-related costs do qualify for tax breaks.

Guide Dogs and Service Animals

If you've been diagnosed with a physical or mental health condition that requires the use of a service animal, the costs related to adopting, training and caring for that animal may be deductible. For instance, a guide dog for the blind or an animal used in the treatment of post-traumatic stress disorder would likely qualify.

Expenses eligible for deduction would include veterinary care, food, training and grooming costs, but make sure you have documented proof of your medical necessity for the animal. Further, this applies only to certified service animals; therapy animals would not qualify.

Guard Animals

A dog that helps to protect your business is a legitimate write-off. You can deduct expenses related to the care of the dog, but do make sure he is truly capable of protecting the premises. A large German shepherd or Rottweiler would qualify as a guard dog, for instance, while a Yorkie most likely would not make the cut.

Working Pets, Such as Cats for Pest Control

If you have a cat whose primary purpose is to control pests in your area of business, related expenses are likely deductible. According to Micah Fraim, a Virgina-based CPA, in the Chicago Tribune, "Cats or other animals that are kept primarily for pest control are also deductible … [a] couple owned a junkyard and put the food out to attract feral cats … [A] court upheld the deduction as cats were there 'to deter snakes and rats.'"2

Fostering Animals

If you devote your heart and time to caring for animals in need of foster homes, you can deduct any expenses that aren't already reimbursed, as they qualify as charitable donations. In addition, you can deduct the mileage when driving back and forth to volunteer your time at an animal shelter or rescue organization, and if you donated food or other items to a shelter, you can deduct the fair market value of those, too.

The caveat is that the shelter must be set up as a nonprofit organization in order for volunteers to qualify for deductions. Therefore, fostering animals from a municipal shelter may not offer any tax savings (but is still a worthy cause nonetheless).

Moving With Your Pet

If you must relocate due to work, you may be able to deduct the costs associated with moving your pet (just as you can the costs of moving your other belongings). This one is relatively unknown, as Credit Karma's survey revealed 67 percent of pet owners were not aware they could deduct costs of relocating with their pet. According to the IRS, in order to deduct moving expenses, your move must be closely related to the start of work and meet the distance and time tests, as follows:3

"Your move will meet the distance test if your new main job location is at least 50 miles farther from your former home than your old main job location was from your former home.

For example, if your old main job location was 3 miles from your former home, your new main job location must be at least 53 miles from that former home … In most cases, you can consider moving expenses incurred within [one] year from the date you first reported to work at the new location as closely related in time to the start of work."

Hobby Income

If you earned money via a pet-related hobby, such as winning a dog show, you can deduct expenses up to your earnings, but you must itemize your deductions to do so. Further, as Fraim told The Chicago Tribune, the benefit of this depends on your adjusted gross income (AGI):4

"These deductions are subject to a threshold of 2 percent of your adjusted gross income or AGI … For easy math, let's say you made $1,000 from pet shows, had $3,000 in expenses and your AGI is $100,000 … You can deduct $1,000 of expenses — not the full $3,000 — because you're only allowed to take a deduction up to the amount of income earned. But even then, you don't actually get any tax break."

Other cases where you can legitimately deduct animal-related expenses would be if you run a business that involves animals, such as a pet groomer, dog trainer or dog walker. In those cases, the deductions would be similar to any other deductible business expense — just be sure to keep your receipts and other records so you can show the expenses are related to your business and not your family pet.