Pet-Related Tax Deductions in 2021

Everyone could use tax relief after the economic damage from the COVID-19 outbreak. Even if caring for a pet feels like a full-time job, you cannot claim them as a dependent on your tax return. However, you may be eligible for pet-related tax deductions, which can help you keep more of your hard-earned money in your pocket.

Here’s all you need to know about earning tax breaks for your pet in 2021.

Potential Tax Breaks for Pet Owners

Tax breaks for pets are only available in certain circumstances. They are frequently connected with service animals and corporate pets.

However, if you and your pet meet specific qualifications, you may be eligible to claim deductions. You could deduct the cost of a variety of expenses, including:

  • Veterinary attention
  • Food requirements
  • Supplies for pets
  • Training
  • Grooming 
  • Moving/Boarding

Before attempting to claim a pet tax deduction on your return, you should contact a tax professional to see if you qualify.

Service Animals Tax Deductions

Medical expenses paid during the year that exceed 7.5 percent of your adjusted gross income can be deducted from your taxes. As a result, if your pet assists you in a medical capacity or performs specific activities, you may be allowed to claim a tax deduction for pet costs.

People who are blind or deaf and rely on a guide dog, for example, may be allowed to claim a tax deduction for training and caring for the dog. Similarly, veterans and others suffering from PTSD (Post-Traumatic Stress Disorder) may be allowed to claim a tax deduction for a dog that provides certain services, such as these:

  • Turning on lights and opening doors before a veteran enters their home
  • Nudging, pawing or licking to interrupt flashbacks and nightmares
  • Using body weight as a grounding strategy to alleviate anxiety or distress
  • During a medical emergency, retrieving pharmaceutical bags or a list of phone numbers
  • Keeping a close eye on their veteran’s back in public areas to give protection and decrease hyper vigilance
  • Picking up dropped things and offering assistance with mobility and ambulation

In some situations, you may be eligible to claim a tax deduction for the costs of keeping therapeutic or emotional support animals (ESAs). Remember that, while all pets give emotional assistance, not all pets qualify for tax deductions.

You must be able to demonstrate that your animal aids in the treatment of a diagnosed mental or physical need. Prepare to produce a medical letter as confirmation that you require service or animal support.

Working Animals Tax Deductions

If you operate a business, you may be eligible to claim a tax deduction if your pet performs a service for you. You’d be claiming a business expense deduction in this scenario, so you’d have to be able to demonstrate that the cost of keeping your pet is a necessary element of running your firm.

For example, if you rely on a cat to safeguard your business from pests or have a guard dog on the premises for security, you may be able to claim a deduction.

Keep all receipts for care taking charges if you want to claim this form of pet tax deduction. Food and veterinarian fees are two examples of purchases. You should also keep track of the amount of time the animal spends at your place of business.

Performance Animals Tax Deductions

If your pets act in a way that makes you money, you may be eligible to deduct their costs as a business expense. You could, for example, ride horses as a pastime. However, if you perform by riding a horse and earn money from it, the IRS (Internal Revenue Service) may consider the cost of caring for that horse to be a business expense.

If your pet appears in commercials, television shows, movies, or print advertisements, they may be deemed a business enterprise. If your cat is the star of your monetized YouTube channel, the same might be said. Just make sure to keep detailed records of any expenses linked to your pet and any income-generating activities.

Pet Fostering Tax Deductions

If you foster animals, you may be eligible for a tax reduction on your income tax return. If the animals are from a qualifying nonprofit, you may be eligible to deduct all of your expenses for caring for foster animals as charitable contributions.

If you foster pets for a nonprofit, they will usually cover the cost of food and veterinary care. However, any money you pay out of pocket for the animals’ treatment may be deductible.

You may be eligible to deduct fuel expenditures if you volunteer at animal shelters or rescue organizations, so keep note of your miles. Please keep in mind that this pet tax credit only applies to driving done in support of the organization’s objective, not to your daily commute.

Pet-Related Moving Costs Tax Deductions

Finally, you may be allowed to deduct the expenditures of transporting your pet to your new house provided if you meet the following IRS’s requirements:

  • The relocation must be closely related to the start of employment.
  • Your new primary job location must be at least 50 miles away from your former job location.
  • Following the relocation, you must work full-time in your new position for at least 39 weeks during the first year.

Final Words As usual, consult with your tax advisor to ensure that these potential deductions are appropriate for your specific financial and tax circumstances.