Is My Pet Tax Deductible?

Beyond whether or not you can claim pets on taxes, it may make sense to carry the best pet insurance to offset the costs of a major illness or medical condition should your pet become sick.

Tax breaks for your pets

Generally pet owners can’t claim their pets as a tax deduction. However, there are some notable exceptions to this.

1. Service animal deduction

There are potential tax deductions for service dogs, guide dogs and comfort animals.

According to the IRS, “You can include in medical expenses the costs of buying, training, and maintaining a guide dog or other service animal to assist a visually impaired or hearing disabled person, or a person with other physical disabilities. In general, this includes annual expenses for pets such as food, grooming, and veterinary care, incurred in maintaining the health and vitality of the service animal so that it may perform its duties.”

In order to take a medical deduction for your service dog, guide dog or other animals you will need to prove the service animal is needed to assist with your condition. Note that these costs are subject to the 7.5% of adjusted gross income threshold for the deduction of unreimbursed medical expenses. And of course your overall itemized deductions must exceed the amount of the standard deduction for your marital filing status for the tax year in question. The current standard deduction levels are:

$12,550 for single filers
$25,100 for those filing married and joint

If you meet these thresholds and conditions, you can take a therapy dog tax deduction for the annual expenses for pets for the service animal. Service Animal Deduction

2. Charitable deduction

In some cases you may be entitled to a charitable deduction related to a pet. This can happen in one of two ways.

First if you make a charitable donation to a pet shelter or related type of organization, this contribution can be tax deductible. Donations can be made as cash or goods. The organization must be a qualified 501(c)(3) entity to qualify as a charity. The ability to deduct your donation will be subject to your ability to itemize deductions in a given tax year.

Another potential charitable deduction is in relation to fostering a pet from a shelter. In this case you can deduct any reasonable expenses associated with fostering this dog or other animal. It is critical that you keep detailed records of these expenses. Note that you must be eligible to itemize deductions for the tax year in question.

It is a good idea to consult with a qualified tax professional for advice on these types of charitable deductions.

3. Working animal deduction

If your pet animal is also involved in a business that you run, some or all of the expenses may be deductible against business revenue. For example, if you own horses and use those horses to give rides to paying customers as part of a business, some or all of the costs of feeding the horses, medical care and other expenses might be considered deductible business expenses.

Other examples might include those who run a security business where guard dogs are used to enhance their customer’s security in some cases. Or perhaps you run a rodent control firm and use cats in your business to help catch rodents.

If your pet has a social media following on a site or app such as Instagram, Tiktok or Youtube and you earn revenue from ads, then the expenses related to the care of the pets used on the channel may be deductible. This would also apply if your pet appears in television commercials or print ads.

Generally the IRS says that expenses considered to be ordinary and necessary in the course of running a business may be tax-deductible. Working animal deduction

4. Moving expense deduction

Should you need to relocate for a new job, the IRS considers the cost of moving your pet as part of the costs of moving your household goods. You will need to keep good records of the cost of moving your pet and you will need to meet the criteria to be able to deduct moving expenses on an overall basis.

The relocation must occur within one year of starting your new job.
Your new job must add at least an additional 50 miles to your commute if you were to have stayed in your former residence.
After relocating you must work at least 39 weeks out of the first 12 months in the job you relocated for. For those who are self-employed you must work 78 weeks out of the first two years in this location.

Note the Tax Cut and Jobs Act passed at the end of 2017 and effective starting with the 2018 tax year increased the overall thresholds for deducting moving expenses and this would also apply to the ability to deduct moving expenses for your pet. Moving expense deduction

Pet insurance basics

Coverage varies from policy to policy, but generally pet insurance does not cover routine veterinary visits and procedures such as shots and checkups. This is known as wellness care.

Pet insurance will generally provide coverage for treatment of major illnesses such as cancer and other conditions. You still want to ensure that your pet insurance policies cover:

Injuries from accidents and illnesses
Congenital and hereditary conditions
Cancer and other chronic diseases

You will also want to read any policy that you are considering to learn about the types of treatments and procedures that are excluded from coverage. Pre-existing conditions your pet has prior to taking out the coverage are typical examples of exclusions.

You will also want to check on the monthly premiums and the amount of the annual deductible so you fully understand how much you could be out-of-pocket each year. If your pet does contract a serious illness that is covered by pet insurance, having a policy in place could be the difference in financially being able to provide your pet with the medical treatment they need or having to make a very tough decision.

The bottom line

In some cases discussed above, annual expenses for pets may be tax deductible. The situations in which these costs can be deducted are pretty specific and in some cases your total itemized deductions will need to exceed the threshold to be able to itemize in the first place. Be sure to consult with a tax professional to determine if you are eligible for a deduction based on your situation.

Except in situations like those outlined in this article, medical expenses related to your pet will not be tax deductible. If your pet incurs a serious injury or a critical illness, the best way to maintain your pet’s wellbeing while protecting yourself financially is by getting your pet insured. Check out the leading pet insurers in the USA below: