Reasons for Animals to Be Claimed on Taxes

It sounds wacky, yet it's true--you can claim tax deductions based on the animals you own. But don't run off and start claiming your dog as your dependent. Make sure you familiarize yourself with the real, legal reasons why the U.S. Internal Service Revenue may consider adding to your tax refund based on the animals in your life.

  1. Guide Dog

    • If you or anyone you're caring for is disabled in some way and you need the help of a guide dog or any other trained animal to move around or do work, you can count the cost of owning such an animal among your tax deductions. Such costs will fall under medical expenses. These should include the cost of buying the animal and training it and maintenance costs such as special leashes, pet food, vaccinations and medicines.

    Guard Animals

    • If you have your own business and it entails having watch dogs or animals guarding your inventory or company properties, you can deduct expenses relating to the upkeep of the animals. Note that you can't deduct the entire purchase cost of the animals. But you can apply depreciation on the purchase, like you would on mechanical equipment at a rate determined by a local breeder.

    Breeding

    • Any animal you own for a breeding business can be depreciated and deducted accordingly from your taxes, as long as the animal in question is used specifically for breeding.

    Animal Shelter Donations

    • The cost it took for you to adopt a dog or cat from the animal shelter isn't tax deductible. However, any outright donation to the animal shelter you make along with the purchase of your new pet is considered a charitable donation and is certainly tax deductible.

      A variation on this tax deductible scenario is for you to pay or make an official donation to animal advocacy groups or zoos for the privilege of becoming an animal's sponsor or foster parent. Such donations, whether in cash or otherwise, are tax deductible up to 50 percent of your adjusted gross income. Any leftover deductible value is carried over and credited to you in the next year.

    Moving

    • If taking on a new job has forced you to move to a new place, your moving expenses qualify as a tax deduction. As a result, you can actually include the cost of moving your pet dog, cat, bird, chameleon or any other animal from your old home to your new residence.

    Government Incentive

    • Occasionally, your local government puts into effect a few tax incentives to encourage citizens to own or breed a particular animal. This is commonly done to encourage the growth of an agricultural sector. If you're into farming or the livestock business, for instance, you might be interested in raising alpacas for profit.