Tax Write-offs : A Guide for the Pet Lover
Tax Write-offs : A Guide for the Pet Lover
In the month of July of 2009, Rep Thaddeus McCotter unveiled the HAPPY Act (Humanity and Pets Partnered Through the Years) bill. This bill pushed for allowing for a tax write off up to $3,500 in each year for pet care-related expenses. The status of the bill as of the date of this article: Referred to the House Committee on Ways and Means. It would seem that this is just not the first priority , you may well have a difference of opinion on that.
What sort of animal- and pet-related expenses are eligible for a tax write-off?
The family pet is near and dear to us. Some of us might think our dog or cat worth its weight in gold (this is a figure of speech). But, did you know that pet-related expenses are, in certain circumstances, eligible for tax write-offs. For example, when relocating, a pet owner could file for a tax write-off for the costs borne by relocating a family pet, in tax law to this purpose, a pet can certainly be treated as a personal belonging, and therein our pet dog or cat is treated likewise.
Also a business may be able to deduct for the costs of keeping a guard dog. And a voluntary sponsor of an animal that serves a theraputic function, such as a seeing-eye dog, might be allowed to write off vet expenses and bills, and other similar unreimbursed expenses (these are considered charitable donations). And there have likewise been court room rulings that have permitted tax deductions for costs associated with keeping animals serving the hearing impaired, physically-impaired, and visually-impaired individuals. There are additionally tax breaks in costs related to the care of animals in an animal-breeding enterprise.
Van Dunsen vs Commissioner
Van Dusen shared her home space with nearly 80 kittens and cats (7 of them she counted as personal pets). She volunteered for a charity “Fix our Ferals” with the main intention of fixing wild cats. This volunteer deducted a little over twelve-thousand dollars on her tax return. The Irs argued that she was rescuing cats by herself rather than as a part of a charity. The tax court refused the portrayal. The tax court sided with the IRS, however, that a large number of the expenses ( wet/dry vacuum repair cost, DMV fees, Costco membership dues, and State Bar Dues) wouldn’t constitute exclusively charitable expense.
Ultimately, all individual expenses which exceeded $250 were disallowed due to the fact Ms. Van Dusen failed to keep the appropriate required documentation for these charitable donations (i.e. a contemporaneous or simultaneous verification from the donee.) For this write-off to be permitted, the donee must also file a return with the Internal revenue service reporting the equivalent info that would be included in the written acknowledgment, such as: 1) the amount of cash contributed; 2) a description and good-faith estimate of any goods or services acquired in exchange; and 3) if the donee delivers any intangible, immaterial religious benefits, a statement of such). So if you desire to deduct the expenses for your 60 cats, make sure you are acting on the behalf of an appropriate charitable organization and be sure you obtain the necessary documentation.
How do I distinguish between tax deductible and non-tax deductible animal care-related expenses?
So now you know there are potentialities for tax deductions related to the expenses incurred by the care of animals. And there are conditions when these expenses are not tax deductible. If you happen to be contemplating a tax write-off related to the costs of caring for animals, request the direction of a certified public accountant (or CPA). Do not assume that just because your neighbor owns twenty cats, he will be able to provide you with qualified animal- and pet-related tax deduction information and counsel.
In one bizarre illustration, a landscaper tried to write off for the expenses of attending to a dog that helped him pull a cart while on the job, likely without the guidance of his accountant. This awarded the gardener an audit. You can assume that this brought on some working-relations strain, though we can’t verify this possibility. Nor is it likely that either the employee or boss will go on the record anytime soon.