It is the 15th of April – Tax Day in the United States. The deadline that comes around all too quickly, a date when every US resident must file a federal tax return with the Internal Revenue Service. Most states also have state tax returns that must be filed today, too.
Have you ever considered what your dog and taxes have to do with each other?
Unfortunately, unlike human dependents, our dogs are not tax-deductible. So, please don’t try this on your tax return.
In New York state, however, officials and animal rights advocates have filed a state bill that would give anyone who adopts a pet from a New York animal shelter a tax credit of $100, or $300 for up to three animals per year.
The bill is sponsored by Kevin Parker, a state senator from Brooklyn, and would cover all domesticated animals offered for adoption. City Councilwoman Julissa Ferreras, from Queens, introduced a resolution backing the bill, which would make New York the first state to grant such a credit. In New York State alone, shelters can care for up to 8 million dogs and cats each year; about 3 million are euthanized because there is no one to adopt them.
In terms of deductions, as I said earlier – don’t attempt to deduct your dog as a dependent. It will only cause you tax troubles.
But, there are some dog-related expenses that are deductible:
1. If you need a guide dog because you are visually impaired or for hearing assistance, you can deduct the costs of buying, training and caring (food, grooming, veterinary care) for your guide dog as a medical expense. The same holds true for dogs trained to help you with any other diagnosed physical or mental condition.
2. If you use a dog in your business, such as for security purposes, the cost of keeping the dog healthy – as with a guide dog – can be considered a legitimate business expense that is deductible.
3. If you have to move house, pet relocation costs are also deductible as part of your overall moving expenses.
4. Some people earn money from their dog-related hobbies – things like competing in dog shows, for example. If those hobbies result in an income, you have to declare it. But, the expenses you incur for pursuing your hobby are also deductible – provided that total of these expenses exceed 2 percent of your adjusted gross income before deductions.
5. If you volunteer for a pet-related charity, and the charity is a registered 501(c)(3) adoption center, you can deduct mileage you incur for working on behalf of the shelter. If you foster a dog and costs like food are not fully reimbursed – these are deductible too. It helps if the organisation you are working for provides you with a letter acknowledging your volunteer work on their behalf.
6. Some owners set up pet trusts to protect and care for their pet after they pass away. Trusts have tax advantages in terms of tax deductions. But, it is important to have a lawyer who understands your local estate planning laws to help you with the set up of your trust.
Really, with any tax-related matter it is best to seek professional advice and remember to keep good records!
Kathleen Crisley, specialist in dog massage, rehabilitation and nutrition/food therapy, Canine Catering Ltd, Christchurch, New Zealand
Sources: New York Post, Bankrate
Theres another angle in here, one that interests me personally. Thats all the levels of tax-freedom that the greyhound and horse racing industries enjoy in NZ. The New Zealand Racing Board is a tax free entity. So are the three associations: Harness racing NZ, NZ Thoroughbred racing, and Greyhound racing New Zealand. Add to that, every single racing club in NZ enjoys the benefits of not paying tax. Thats 150 clubs across NZ that have an unfair financial advantage over other venues and businesses. But it doesn’t stop there. 50 years ago, the government made stakemoney or race winnings, tax free. How much is this in practice? Greyhound racing alone distributed $16Million tax free to trainers and owners last year. Clubs also reached into the taxpayer coffers and received another $1Million in the guise of the “Racing Safety Fund”. The safety fund is a bit of a rort where we the taxpayer subsidise new paint, driveways etc, all under the guise of “safety”. Because an industry with $2Billion annual turnover can’t afford it? Or otherwise wouldn’t invest in safety enhancements? I am not quite sure. I do know its made little difference to the greyhound racing injury and death toll. They still die at such a rate the dog racing industry is too afraid to reveal its records.
As well as $16Million tax free prizemoney, those trainers and owners aren’t required to pay any ACC levies on that, like normal self employed people do. Instead, honest working Kiwis subsidise that healthcare, and schools, roads, law enforcement – all those things that our taxes pay for are a free ride for those who exploit greyhounds as short term investments. We pay taxes so they don’t have to. To cap it all off, the greyhound racing industry also gave away $1Million in petrol vouchers..you guessed it, no tax required.
For years now the GPLNZ have tried to find out where the money moves inside the government/racing industry partnership, and its a well shrouded secret. Very difficult accounting to follow. We’re left wondering, whats actually in it for NZ? If we’re missing out on all that tax, what is the actual contribution to the country? Is it just a glorified, cruel welfare scheme?
And if we put them out of racing business, surely when they eventually enter normal work, the new tax contributions would have us better off?
These tax rules are 50 years old this year. I’m turning 40 this year and these rules were written 10 years before I was born. You won’t find these laws online because scanners and printers and hard drives didn’t exist then. Personal Computers weren’t even conceived of at this time. These laws are ancient and need revisted. Times are tough in NZ, so why tax breaks for cruel entertainment?
I think attitudes towards animals and use of taxpayer funds may well have changed in that time. The racing industry sure is a different beast these days.
If you’re a “professional gambler” who uses pokie machines or casinos to “earn” your living, you are required to pay tax. If you are however a “professional greyhound racing trainer”, you are not required to pay tax on your winnings. Sounds fair right? Sounds straight?
Straight as a dogs hind leg.
Time for change NZ. No more tax breaks at every turn for the racing industry.
The tax free ride applies to horse racing clubs too, and is likely fundamental to the Auckland trotting clubs current intent to build apartments and a shopping mall which again, is tax free, and has nothing to do with racing nor the welfare of the animals that are used for this pointless activity.