Love Pets? Here’s The Tax Deductions You Missed Out on

Pets are cherished members of many families, and in some cases, they go beyond companionship to play an essential role in daily life. However, pet ownership can quickly become expensive, with costs accumulating for the many necessities that ensure their well-being.

Fortunately, there are certain situations where pet-related expenses may earn you a tax deduction. Understanding when and how to take these deductions can make a significant difference in managing the financial responsibilities of pet ownership.

Tax Deductions for Pet-Related Expenses

The cost of owning a pet can be high, but pet owners may be eligible to claim tax deductions in certain situations. Here’s when you might be able to claim deductions:

Business Use: If your pet is a working animal that generates an income, you may be eligible to deduct their care as a business expense. This includes food, grooming, medical care, and pet insurance.

“If your pet is generating income, like going viral on social media, being featured in paid content, or some other kind of show/competition animal, its expenses, such as vet bills, food, and even outfits, could be considered business expenses. In that case, you may be able to deduct them just like any other business-related costs,” said Jose A. Cruz, CPA and founder of Cruz Tax Advisory.

Service Animal: A service animal is a dog specifically trained to assist individuals with disabilities, performing tasks that help navigate daily life. Examples include guiding the visually impaired, alerting individuals to sounds, retrieving items, and reminding someone to take their medication. Because service animals are considered medically necessary for the individual’s well-being, related expenses such as food and veterinary care are tax-deductible.

Pet Fostering: Fostering pets for an animal shelter, typically a non-profit organization, provides an opportunity to claim a charitable contribution tax deduction. Limits apply, but pet-related expenses can be considered charitable donations, making them tax-deductible.

“If you foster pets for a registered nonprofit, you can deduct costs like food, supplies, vet care, and even part of your utilities if you use your home for fostering. These deductions count as charitable contributions,” Cruz said.

When Pet-Related Expenses Are Non-Deductible

There are common scenarios where pet owners cannot claim tax deductions, even if their pet plays a significant role in their lives. For example, if the pet is simply a companion, routine veterinary bills, food, grooming, and supplies are considered personal expenses and are not tax-deductible.

“Many people mistakenly think pet expenses like food, grooming, and vet visits are tax-deductible, but they’re considered personal costs and don’t qualify,” Cruz stated.

There may also be confusion around emotional support animals (ESAs), which people often assume are the same as service animals.

“The IRS doesn’t recognize ESAs the same way as service animals. Even if a pet provides emotional support, that alone doesn’t make its expenses deductible unless it meets the IRS criteria for a service animal under medical deductions,” Cruz explained.

This is in line with the Americans with Disabilities Act (ADA), which acknowledges that emotional support pets offer comfort and companionship, often to those with anxiety or depression, but does not consider them a medical necessity in the same way as a service animal.

This is because, unlike service animals, ESAs are not trained to perform specific tasks related to a person’s medical condition and only provide general emotional comfort.

The Bottom Line

Tax deductions for pets are generally limited to situations where the pet plays a functional role in certain activities. In these cases, expenses related to the pet’s care and maintenance may qualify for deductions. Tax deductions are not available for expenses related to pets that are simply for companionship.

As always, consult with a tax professional to ensure you make accurate claims and follow IRS guidelines.