In 2004, California cat rescuer Jan Van Dusen claimed just over $12,000 in tax deductions for expenses related to the care of foster cats. The IRS denied the deductions, and in 2009, Van Dusen went to the mat with the agency to fight for her right to claim those deductions, appealing the case in U.S. Tax Court.
Judge Richard Morrison eventually ruled in Van Dusen’s favor, saying she could claim most of those expenses. The only ones the court didn’t allow her to claim were those that were hard to link solely to cat care.
The upshot? The IRS now allows people to claim deductions for expenses related to foster care for pets.
Items such as pet food, medicines, vet bills, and carriers could all be deductible. And if there’s a room in your home solely dedicated to the care of fostering cats, you can claim a portion of your household utilities as well.
However, you’ll need to be careful if you try to claim those expenses.
First, the charity you’re working with has to be a 501(c)(3) not-for-profit organization, and the organization’s status must be current. You can use the IRS’s Exempt Organizations Select Check search to ensure that your rescue group currently has official nonprofit status.
Secondly, if your expenses add up to more than $250, you must have a letter from the organization with which you’re working confirming your volunteer or foster care provider status.
This is good news for people who earn enough money to claim individual charitable deductions. If you’re a mere mortal and you’re filing a non-itemized tax return, or if you have tax-exempt status because your income comes from Social Security or other such programs, it might not be much help for you. But it is a step in the right direction and may convince more people that fostering can have benefits beyond the good feeling of saving lives.
Source: Discovery News