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