When Are Pet Costs Tax Deductible?

Pets are such a big part of our lives. The American Pet Products Association (APPA) estimates that 62% of American households own a pet. The same organization estimates that there are about 78 million dogs and 86 million cats in the U.S. The APPA also estimates that every year, U.S households spend in excess of $50 billion towards these pets. However, in as much as pets are a major part of our households, the IRS and tax law does not provide much tax relief towards these pets. The tax authority expects taxpayers to shoulder all of the pet expenses after tax. This means that taxpayers cannot claim a pet as dependent, claim medical costs for their pets, deduct cost of purchasing a pet, or deduct any other pet related costs. However, there are more specific cases where the tax authority allows for tax relief against pet related costs. These cases are:

Guide Dogs and Other Service Animals

The tax law does allow a taxpayer who is visually impaired to deduct costs of purchasing a seeing-eye dog and costs of maintaining the dog, including training the dog, as medical expenses. According to IRS Publication 502, a taxpayer who is visually impaired or who has other physical disabilities may deduct the costs relating to a guide dog or service animal. The costs that qualify include costs of buying, grooming, food costs, and veterinary costs.

Pets for Business Use

If a company provides security services and has guard dogs as part of these services, then they can claim the costs of maintaining these dogs as a business expense. Businesses that also keep pets for security purposes or for any other service towards the business may also claim the costs of maintaining the pets. However, the person claiming such expenses will need to show that these pets are directly in use for business purposes only.

Cost of Moving Pets

The tax law allows taxpayers to deduct the costs of moving ones home when necessitated by a change of work location or when one relocates in search for employment or business opportunity. However, there are various rules that apply to the qualification of such relocation cost deduction including distance or relocation and costs not being reimbursed by employer. In cases where moving costs qualify for tax deduction, then the costs of moving pets to your new residence is also a deductible cost for tax purposes.

Charity Donations

Donations made to pet shelters and pet related non profit organizations are tax deductible as long as the charity organization that you are donating to is a registered tax-exempt organization. However, if you adopt a pet from a pet shelter, such costs are not tax deductible.