Can I Claim My Pets on My Taxes?

As tax time rolls around again, I get many questions about what is and is not deductible. Many clients want to know if there is any way that they can claim their pets on their taxes, as pet food, bedding, medications and vet bills can add up quickly. The short answer is: most likely not. Here are the four most common justifications that taxpayers use to claim their pets on their taxes.

My pet is my dependent.

We all know that some people love their dogs and cats just as if they were children. Our pets truly are dependent on us for their health and welfare. Unfortunately, the IRS does not see it that way. In order to claim dependents, they have to have a social security number and only two legs.

My pet is a service dog.

The answer to this one is maybe. If you require a service or guide dog because of a physical disability- most commonly, blindness- you may be able to make a deduction under medical expenses. The eligible costs are those of purchasing, training and maintenance of a service dog. So, for example, if you had to buy the dog for $500 and paid $1,100 to have it professionally trained as a sight dog, those costs could be included in your medical expenses for the year, along with dog food and veterinary expenses. However, medical expenses must be over 7.5% of your adjusted gross income before you can begin to claim them. If you have low income or significant medical expenses including the service dog, this may be a lucrative deduction.

My pet is my security system for my home.

Those taxpayers who have an eligible home office in their home can deduct a portion of many house expenses including security system costs. Some taxpayers have argued in tax court over the years that their pet- most often a dog- takes on the role of security system and therefore, the costs of maintaining the dog should be deductible. The IRS has maintained that this is not allowable as the main purpose of the pet is to be a pet- which is a personal expense. The line becomes cloudier if you have, for example, Rottweilers that live at your car lot and whose main job is to keep the place safe. That could be legitimately argued to be a business expense.

My pet is a show dog and I own a breeding kennel.

The answer to this one depends on the circumstances. Most show kennels do not meet the IRS tests of being a business. Often, there is no expectation of profit (only a reimbursement of many of the expenses of the enterprise) and they are sidelines for the taxpayer rather than their main source of income. That puts them squarely in the hobby category, meaning they must claim all net income from the venture but cannot use expenses, including dog maintenance costs, to create losses. If it is a profit-generating business, the costs of maintaining the show dogs are legitimate business expenses.

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