CPA Mark Kohler explains six ways to deduct pet expenses: service animals via medical deductions, guard dogs for business protection, cats for commercial pest control, breeding as a business, training and showing for income, and farm dogs for livestock work. Each requires the animal to serve a legitimate business or medical purpose, not personal use.
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Hi, Mark Kohler here with another tax and legal tip. Let's talk about writing off your pet. That's right, some sort of tax deduction for my pet, my dog, my cat. Is that really possible? Well, yes, it is. And I want to give you six ways that you can take a tax write off and have Uncle Sam help pay for the care of your favorite animal. Now, I want to go in the order of probably the most likely method for taking a tax write off. So we're going to go with number one being a medical expense. That's the most common way to write off an animal right now, and that's going to be as a service animal. Many doctors are now prescribing pets for those with anxiety, depression, children with autism, and maybe even a physical disability. So if you can get your physician to prescribe the use of a pet that it would help you medically. Now, you can take that as a tax write off. Now, where you write it off is another story. I've got lots of videos where I'd like you to consider looking at the health savings account. If you own a small business, the health reimbursement arrangement. Maybe at work you have a corporate plan, such as a flexible spending arrangement and then maybe even as an itemized deduction. Not my favorite. And I've got videos on my website on all sorts of Kohler care medical strategies. And I'd like you to look into that further. So check out the medical expense for writing off, the cost of acquisition, the training cost, food, vet bills, all of that can be a medical expense if you need that service animal number two, a guard dog that's right for you business owners out there, you may need a guard dog to help protect the supplies, equipment, inventory in your home, office, garage, where you may have some product or material that you're selling online. Or if you have a warehouse or even a commercial property where you've got a dog at night that's kind of hanging out in the perimeter of your commercial building. Now, you're not going to be able to write off a guard dog for your personal benefit or personal use. You've got to have a business and that guard dog is there to serve as if you had a alarm system to protect that valuable business equipment. Then again, you can write off the cost of acquisition, maintenance, food, vet bills, the whole nine yards. Now, number three, let's talk about cats, felines. Now, a little factoid first here. Some of you may not realize that over 44% of households in America own a dog, which puts it at 78 million dogs in America for cat owners. We're dealing with about 35% of households for over 85 million cats in America. Now, if you notice the math there, there's fewer households that have a cat, but there's more cats. I think the average cat owner is around one and a half cats or something. I guess if you have one cat, you got to have more. Anyway, so we've got a lot of cats out there as well. And if you're a business owner, you can use a cat for pest control. So again, if you have inventory of commercial building supplies and equipment where you might have, say, I guess, mice or rodents getting into your supplies and equipment inventory, a cat could be the perfect solution. Kind of interesting. I was at Disneyland the other day and Disneyland actually promotes. They talk about the fact that you'll find around 15 cats in and around the Disney park and they use these cats for rodent control. So over by Indiana Jones, if you come out of there sometimes, you'll see a cat as well. But it's a commercial enterprise. And if Disneyland's gonna go pay for this cat and plop it out there amongst the patrons, that cat's going to be a write off just as if it was for you and your business. Number four, breeding. Breeding pets. It's very common for people to have several animals that they might breed throughout the year and sell those little puppies or kittens off and make a profit. Now, under IRS code, you've got a couple options. You could call this a hobby, and you'll have to claim the hobby income of doing this business. But you're not going to get the write off under the new Tax Cuts and Jobs Act. That's tcja, our gift from the GOP and President Trump, which saves business owners a lot in taxes. But for individuals, you're no longer able to write off the expenses of a hobby as an itemized deduction. So if you're a breeder and you're doing it for profit, so I don't want you to fall into the hobby column, but it's actually a business and you're breeding, you're claiming the income from this breeding all those pets, acquisition, food, vet bills, all that is going to be a tax write off in your breeding business. Number five, we've got training or showing pets. Now, this could range from Thanksgiving Day, always a special at our house. We watch the Westminster Dog show as we're cooking Thanksgiving dinner. But if you get onto espn, there's some fun shows of dogs fetching and retrieving even Frisbee contests. Well, you can make money at that. Now again, if it's not a hobby, but a business where you are showing and training pets, you're claiming that income because you're gonna probably get a 1099 show that it's for profit. And now all those expenses for your pet again, acquisition, vets, food, training, all of that is going to be a tax write off as well. Number six, finally, farm dogs. That's right. Now I'm out in a rural area trying to get back to my roots and not be so stressed in the evenings and weekends. So I see farms around all the time. They're not as common common, of course, in America as they used to be. But if you've got an Old Yeller, a dog that you need to help corral livestock, that farm dog is going to be a tax write off. Now that dog may even help keep away varmints and other predators. And these dogs are a tax write off for farmers if they can show that it's helping the farm business, especially ranchers and things like that. So if you're still maintaining a farm in your little area of the woods, that Old Yeller is going to be a tax write off for you. In summary, down below I've got an article that you can read over to my blog with a little more detail for those out there that want to print this out and feel some real paper in your hands, maybe even share it with some of your friends or family. This could be a real benefit for you. And I'm just a firm believer that a tax return just isn't something you plug in and it spits out there's some strategy involved. Your pets could be a great tax writer for you. For many of you in different situations that can help you better save taxes and better live your American dream. Thanks so much for watching and if you found that helpful, please look in the description below. I've got links to my tax and legal library, my QuickBooks training videos, how to start a small business 50, 60, 70 videos, some as long as 30 minutes, explaining more information on tax and legal strategies that will change your life. Also, if you'd like to subscribe to my newsletter or check out my social media links, please please click here. They're weekly free tips and strategies and articles that you'll find extremely helpful and I would appreciate it if you'd subscribe to my channel. I've got so many videos here. I produce every week on my YouTube channel and I'd love to give you a ping every time I shoot a new video. Thanks so much. And keep living the American dream.
