CAN YOU DEDUCT YOUR DOG?
GEORGE WILSON ADAMS CPA MBA
December 5, 2021
This is a question I am asked over and over again by many clients. So here in this article I'm finally going to provide a comprehensive answer that addresses various circumstances. Federal income tax law is ridiculously complex and the Internal Revenue Code ("IRC") consists of over 2,600 pages according to the Tax Foundation.
Dogs as Pets
If your dog is solely a pet and not used in an income producing capacity then the answer is very clear: No deduction. The cost of having a pet is a part of overall non-deductible living expenses. Living expenses are not deductible.
IRC Section 162
This provision of the Internal Revenue Code defines deductible business expenses as follows:
There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business….
If a cost is incurred that strongly relates to carrying on a profitable business, and that cost satisfies the IRS standard of Section 162, then most likely is deductible. If you incurred the expense only because you are engaged in business then it is deductible.
Guard Dogs
Security systems and video cameras used in a business are typically fully deductible because they are "ordinary and necessary costs" to safeguard the business. If a business uses a professional trained guard dog, and the nature of the business requires such security, then the costs of maintaining a guard dog are probably deductible. This would include food, veterinary bills and training costs. The cost of acquiring a dog must be capitalized and depreciated over seven years unless Section 179 or bonus depreciation is claimed.
Good records should be maintained of the hours of service provided by the guard dog. Finally, certain breeds of dog like a Chihuahua are not likely to survive IRS scrutiny if claimed as guard dogs. For further information on deductible business expenses see IRS Publication 535.
Show Dogs
For many years there was a dog named Boo, a Pomeranian, who was considered to be the world's cutest dog. Boo had his own Facebook page that was visited by millions of people. I don't know if the owner of Boo actually operated a business centered on this dog. But if the answer is yes and Boo videos, photos and other products were sold as part of a profitable business then, most likely, all dog costs listed above would be deductible. This occurs because Boo, in this hypothetical case, is a business.
Boo died in January of 2019 after living a wonderful life for 12 years. He was probably the richest dog in the world!
Dog Breeders
Professional dog breeders are in the business of raising and selling their dogs and all dog related costs would be deductible.
Dogs as a Medical Expense
If you suffer from a medical condition that makes a guide dog necessary, such as for the blind or hearing impaired, then dog related costs may qualify as a medical expense. For 2020 you may claim an itemized deduction for medical costs to the extent they exceed 10% of adjusted gross income. Further, you must be able to itemize as opposed to claiming a standard deduction. Here is a quote from IRS Publication 502:
Guide Dog or Other Service Animal
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 any costs, 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.
George Adams
Certified Public Accountant Master of Business Administration
Tel: (207) 989-2700 E-Mail: GeorgeAdams@IntelligenceForRent.com
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Brewer, Maine 04412-2339
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