We love them, play with them, stroke them, and go to great lengths to care for them. And who can blame us? They’re members of our family. We want the best for them and we indulge them. And when the worst happens and our cat gets ill and needs extensive veterinary care, we find a way to scrape up the money to make our feline friend well.
And so it happens that when tax season rolls around, many pet parents start thinking how their cats might be considered dependents or as legitimate tax deductions.
Caring for our furry friends isn’t cheap. Collectively, pet parents in the U.S. spent $53 billion last year, according to the American Pet Products Association. The individual cost of raising a cat is estimated at $1,035 annually, according to the American Society for the Prevention of Cruelty to Animals (ASPCA). This figure includes food, kitty litter, pet insurance coverage, and basic preventative veterinary care.
A few years ago, there was a movement to relieve some of burden of pet care costs. A bill was introduced to Congress, H.R. 3501, called the “Humanity and Pets Partnered through the Years” (or, HAPPY). Michigan Rep. Thaddeus McCotter introduced the bill, along with Rep. Steve Cohen of Tennessee and Rep. Jared Polis of Colorado, in the hopes of reducing pet parents’ financial burdens by allowing a $3,500 tax deduction annually. Although the bill was endorsed by many organizations (including the ASPCA, the Humane Society of the United States, the Animal Law Coalition, the American Veterinary Medical Association, and the Pet Industry Joint Advisory Council), it failed to garner enough votes to pass.
If Uncle Sam isn’t going to give pet parents a break, is there anything else that can be done? Well, maybe. Lisa Greene-Lewis, lead CPA at the American Tax and Financial Center at TurboTax, says there are some legitimate tax deductions for pet parents, but only in specific instances. She cautions taxpayers to tread carefully when making these deductions by having receipts and documentation to back up these claims, should the IRS decide to audit your return.
Here are five instances where you could make a deduction:
1. Breeders
Cat breeders can claim the care and feeding expenses for their cats and kittens as a business deduction, as long as breeding is their career and not a hobby, says Greene-Lewis. If you have a space on your property dedicated exclusively to breeding, it is also a viable business deduction.
2. Pet actors
Taxpayers who are lucky enough to have a pet in show business can deduct some of the expenses directly related to the business as long as the expenses are reasonable. And no, we’re not talking about that cute video of Fluffy playing with a laser that you uploaded to YouTube last week.
3. Pest control
If you have a business and your cat provides pest control, you could deduct some of the expenses directly related to the business as long as the expenses are reasonable. Greene-Lewis says one couple did win a case in tax court, claiming that the cat food used to feed their wild cats should be deductible, because their cats kept their junkyard free from snakes and rats. This case was upheld because they proved that the expenses were directly related to their business and were reasonable.
4. Adoption
Good news! Not only can you save a cat’s life, but you can deduct the cost of a donation given to a charitable donation for adopting the cat. These adoption fees typically cover shots and the cost of a spay or neuter surgery.
5. Foster care
If you directly foster a cat for an animal shelter or rescue organization, you can deduct expenses such as vet bills, boarding, food, collars, leashes, medication, and toys. So if you’ve been on the fence about whether to foster cats, perhaps this news will tip fostering in your favor.
Hopefully, these tax tips will provide some guidance on what pet-related tax deductions are legal in the eyes of Uncle Sam. If you have any further questions, it’s best to consult an enrolled agent or CPA to get expert advice.
And if you’d like to see your fur kid eligible as a tax deduction in the future, contact your congressional representative!