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When Are Pet Expenses Tax-Deductible?

SmartAsset: When Are Pet Expenses Tax-Deductible?

When you’re trying to score a break at tax time, maxing out your deductions can potentially lower your bill or result in a bigger tax return. Apart from the standard write-offs for things like mortgage interest or business travel, you may be able to claim more unusual expenses, including the cost of taking care of a pet. The IRS has certain rules about when pet expenses are tax-deductible, so if you’ve got some furry friends at home, here are a few scenarios where you might benefit.

Consider working with a financial advisor as you work on a budget, whether that includes a pet or not.

You Require a Pet for Medical Reasons

Service animals can take many different forms, including dogs, cats and even miniature ponies. If you’re required to have a guide, service or therapy animal because you have a diagnosed medical condition, such as blindness, epilepsy or post-traumatic stress disorder, you may be able to deduct the cost of its care as a medical expense on your taxes.

In order to meet the IRS standards your pet must be certified and trained as a service animal. The types of costs you can deduct include grooming, food, veterinary care and training. You might also be able to claim vet bills on taxes for pets you foster, provided that the nonprofit organization hasn’t reimbursed you and the organization is registered with the IRS.

Find out now: How much do I need to save for retirement?

You Use a Guard Dog for Your Business

While you can’t technically put a dog on the payroll, you may still be able to deduct the cost of its care as a business expense if it’s used primarily to guard your premises and inventory. The IRS doesn’t allow you to write off the cost of buying the dog itself, but you can use the deduction for things like food, training, boarding and medical care. Keep in mind that it only applies to the dog’s working hours, not expenses incurred during the animal’s down time.

You Foster Pets in Your Home

Volunteering with a service animal agency or pet rescue organization is a great way to give back, and it can also pay off at tax time. If you foster pets, either in your home or on your property, you may be eligible to claim the deduction for unreimbursed expenses. That covers food, shelter, veterinary bills, grooming costs, litter and bedding materials. These expenses would qualify as charitable donations, which are deductible up to 50 percent of your adjusted gross income.

You’re a Professional Breeder

SmartAsset: When Are Pet Expenses Tax-Deductible?

If breeding and selling dogs, cats or other animals is your primary occupation, there’s good news: not only can you deduct food, medical bills and boarding costs, but you can also write off any other ordinary and necessary expenses that running your business entails. This includes things like advertising, costs relating to the business use of your home, and travel expenses. If you breed animals as a hobby, you only qualify for the deduction if your expenses exceed 2 percent of your adjusted gross income and you itemize.

You’re a Law Enforcement Dog Handler

Some of the cost that goes along with maintaining a police dog may also qualify for a tax deduction if you’re not reimbursed for these expenses through your job. If the dog lives in your home when not on-duty and you’re responsible for buying its food or purchasing a kennel, you can generally claim them as a job-related expense.

The Main Rule for Cutting Your Tax Bill

The No. 1 rule when it comes to claiming deductions for pet care is to make sure you’re documenting your expenses carefully. If you include something that you know is deductible but you don’t have documentation to support it, you may run into trouble if you’re audited. You don’t want to end up in the doghouse with Uncle Sam, so hanging on to all of your receipts is a must.

Bottom Line

SmartAsset: When Are Pet Expenses Tax-Deductible?

Contrary to what many people may think, it is very possible to claim deductions for your pet-related expenses. Just be sure to keep careful and complete records of what you spend and why you spent it. Was it for a work-related matter? Or was it for non-compensated activity like fostering pets? Keep in mind that moving expenses are no longer deductible.

Tips on Taxes

  • A financial advisor can offer valuable insight and guidance as you explore ways to reduce your taxes, including by deducting pet-related expenses. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Income in America is taxed by the federal government, most state governments and many local governments. The federal income tax system is progressive, so the rate of taxation increases as income increases. Use our free income tax calculator to give you a quick estimate of what you’ll owe.

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