Caring for our furry friends can be expensive. From food and toys to vet bills, the costs can quickly add up. So it’s no surprise that many pet owners are interested in getting pet insurance to help cover some of those costs, particularly the unexpected vet bills.
But is pet insurance tax deductible?
In general, pet insurance and other pet-related costs are not tax-deductible. Pet ownership is considered a private pleasure expense.
However, there are some cases where pets can be included as income expenses, such as service animals or working pets. In addition, fostering animals can be classed as a charitable donation, so they may also make the cut for tax deductions.
Are Pets Counted As Dependents?
Obviously, pets are part of our families. They rely on us for food, shelter, and love. But when it comes to taxes, the IRS does not consider pets as dependents. So even though our pets may rely on us financially, we can’t list them as dependents on our tax returns.
Even if you can’t deduct pet insurance it’s still important to have. And when getting pet insurance its always worth comparing plans to see which one is right for you.
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This means that any pet-related expenses, such as pet insurance or vet bills, are not tax-deductible, except for some special circumstances. Read on to learn if you can get a tax deduction for your pet.
Claiming Pet Expenses on Taxes
One of the few exceptions to the pet tax rule is service animals. If you have a service animal, you may be able to deduct some of the costs associated with caring for your pet.
To qualify, your animal must perform a specific task or service for you. They must also be individually trained to do so. For example, a seeing-eye dog that helps a blind person navigate would qualify as a service animal.
If you have a service animal, you may be able to deduct some of the costs associated with their care, such as food, veterinary bills, and training expenses. These deductions would fall under the category of “medical expenses”.
Unfortunately, the IRS does not consider therapy animals as certified service animals. So the expenses associated with their care are not tax-deductible.
Pets that are used for business purposes may also be tax-deductible. For example, if you use your dog to herd sheep, they would fall into this category.
The IRS considers working animals as business equipment. However, their job must be essential to the operation of the business and the earning of a taxable income.
The costs of caring for working animals, such as food and vet bills, may be tax-deductible. But you can only deduct a portion of these expenses. The amount you can claim will depend on how much the animal is used for business purposes.
If you have a pet that you use for business purposes, be sure to keep track of all the related expenses. You’ll need to provide receipts to the IRS as proof of your deductions.
We put the word performance in quotation marks because, technically, these animals are not considered working animals by the IRS.
However, they do provide a service and, as such, their owners can claim some of the related expenses on their taxes.
Additionally, if your pet is famous on social media platforms, so much so that they begin to earn you a taxable income, then their associated expenses can be tax-deductible.
Relocating For Work
If you have to move for work, you may be able to deduct some of your pet’s expenses from your taxes.
The IRS considers moving pets to be a “non-reimbursed employee expense.” This means that if your employer does not reimburse you for the cost of relocating your pet, you may be able to deduct these expenses from your taxes.
However, the IRS has certain conditions surrounding this relocation. The move must be close to the start of a new job, your new job location must be at least 50 miles farther from your old home than your previous location, and after moving, you need to work full-time for at least 39 weeks in the first year.
If you foster animals, you may be able to deduct some of the related expenses from your taxes.
The IRS considers the cost of caring for foster animals to be a charitable donation. This means that you can deduct these expenses as long as you donate your time and services to a qualified organization.
This means that adopting stray animals from the street does not count as a charitable donation.
To deduct the cost of caring for your foster animals, you’ll need to itemize your deductions. This means that you can’t take the standard deduction when filing your taxes.
And, as with all charitable donations, you’ll need to keep track of your expenses and have documentation to back up your claims.
If In Doubt, Consult a Professional
As you can see, the IRS has very specific rules when it comes to deducting pet-related expenses from your taxes.
And while we’ve tried to cover all the bases, there may be some circumstances we haven’t thought of.
So, if you’re unsure about whether or not you can deduct a certain expense, it’s always best to consult a tax professional. They’ll be able to give you the most accurate and up-to-date information.
Professional advice can be what saves you from an audit down the line.
And, when it comes to the IRS, it’s always better to be safe than sorry.
If only the IRS knew just how dependent our pets really are on us. Many of them are basically our children!
But, alas, they don’t, and that’s why we have to jump through a few hoops to get some of our pet-related expenses deducted from our taxes.
The good news is that it is possible to deduct some of these expenses. So, if you use your pet for business purposes, have to move for work, or foster animals, you may be able to save a bit of money come tax time.
Just make sure to keep track of all your expenses and have documentation to back up your claims. And, if you’re ever unsure about whether or not you can deduct an expense, always consult a professional.
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