With the holidays in the rear view mirror, the next thing on a lot of people's minds is their taxes. Yes, it's almost that time of year, and by now you should have received all of your W-2s or 1099s or whatever documents you need in order to file by April 15.
No one likes to think about it, but there is some good news for pet owners who haven't sent their returns off yet: it's six tax breaks you can take in conjunction with your critters. Not everyone will qualify, of course, but these are legitimate, under the right circumstances.
6 Potential Tax Breaks for Pet Owners
1. Pest Control
This first might be considered a bit of a loophole, due to its potential for abuse, and I'm sure more people will be trying to take advantage of this deduction, but technically you're able to write off some costs with cats that are deemed necessary for pest control. Here's the catch: it's a business deduction, so your home wouldn't apply.
If pressed, you'll have to prove a few things, such as that the "employment" of the feline is "ordinary and necessary" to your line of work and that the service is "helpful and appropriate."
2. Guard Dogs
Here's another business expense where your pet ownership could let you hold on to a little more green by deducting the costs of upkeep for guard dogs. Before you try it, remember the breed and size of the dog or dogs need to be appropriate for this deduction. Don't try and pass your pug off as the last line of defense.
Things like training, food and vet bills can be added to your Schedule C, but be sure to save your receipts.
3. Service Animals
If your pet aids you in relation to your health, whether mental or physical, you may be able to qualify for a break. Same goes with the costs associated with procuring and training guide dogs. Food, vet and grooming can be included as well. After all, these are costs associated with their upkeep for a legitimate need.
Make sure you have a script from your physician or some type of official document noting the animal has been deemed necessary or that you qualify for this type of support prior to receiving him or her. Keep all paperwork referencing the animal's training in connection to your condition.
4. Hobby Income Deductions
There are certain circumstances, such as showing your pet competitively, where you might be able to take advantage of deductions. This applies if you make money off of your pet, then some expenses will be deductible — e.g. training, competing — up to the amount of your winnings.
You'd add this to the Schedule A on your 1040, but this only works if you're itemizing, and the deductions are subject to a threshold. In the long run, even if you qualify this one might not be worth it. You'll have to weigh the benefits yourself.
5. Foster Pet Parenting Costs
So, you're one of those special people who volunteers to foster homeless or recovering pets in need of a little TLC before being placed with a family, bless your heart. You probably already know this, but there are costs associated with your selfless acts of love you can take deduct on your taxes.
As long as the group your aiding is a qualified nonprofit organization, your costs should be deductible on your Schedule A under "charitable donations" with one caveat: you can't have been previously reimbursed for these costs.
Also, keep track of your mileage if you're traveling back and forth to rescue shelters you're helping, but watch out for municipal shelters that aren't tied to a charity, because they're generally not deductible.
Qualifying for Tax Breaks
Besides ensuring that you and your pet qualify, be careful with any of these deductions and make sure you have all of the documentation that may be required should you get called on your decision to include them on your return. Otherwise, it could end up costing you more than you saved.
Source: Chicago Tribune