Critter Corner: Can You Claim a Pet as a Dependent?

Dear Baxter,

My dog, Rover, is like a child to me.  He is cute, loveable, and playful, and like a human child, relies on me for support. Vet bills, food, cleanup, and repairs caused by damage, have cost a lot of money this past year. Am I allowed to claim him as a dependent on my tax return?

Thanks!

Doug E. Dadd
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Dear Doug,

Unfortunately, although the IRS doesn’t specifically spell it out, it is implied that dependents — at least for taxation purposes — must be a human. It’s ruff, if you ask me!

The rationale behind this requirement is that human children have the potential to grow into adult taxpaying humans, whereas dogs and other pets do not. The way the IRS sees it is — dogs do not pay taxes, so why should the government provide tax incentives to the owners? Don’t despair. Although you cannot deduct your pet-related expenses, these are some pet-related deductions you can take:

• Guard Dogs: If you use a guard dog to guard your business premises, you can deduct the cost as a business expense. It should be a certified guard dog, and be a member of a traditional guard dog breed such as a Rottweiler, German Shepherd, or Doberman Pinscher.
• Service Animals: Seeing-eye dogs used by the blind and other service dogs used by the disabled are a deductible medical expense. You must register the dog with an agency declaring that it is a service animal. If you do so, you can deduct as an itemized medical deduction expenses such as pet food, training, medication, and vet bills. See IRS Publication 502 for more details.
• Moving Expenses: You can deduct the costs of moving your pet.  See IRS Publication 521 for more details.
• Dog Breeders: A person in the business of breeding and selling dogs may deduct all his or her business-related expenses, just like any other business.
• Farm Dogs: A farmer or shepherd who uses a dog to herd or guard cattle, sheep, pigs, or other farm animals can deduct the cost of keeping the dog as a business expense.
• Donations to Dog Charities: If you donate money or property to a tax-exempt dog shelter or other tax-exempt charity that helps dogs, you may deduct the amount as a charitable deduction if you itemize your deductions. If you donate property, you can deduct the fair market value of the item — for example, if you donate dog food, you can deduct the price of the food. However, you may not deduct: an adoption fee or adoption donation you make to adopt a dog.
• Estate Expenses: Fees to maintain a pet while an estate is being settled may be deductible if the animal has monetary value, such as a purebred dog.  Expenses for security of estate property such as a guard dog may also qualify for deductions.

Many of us who think of our pets as family members want to ensure that they are cared for after we become incapable of doing so. One way to fulfill this responsibility is to set up a pet trust, which is a legally sanctioned arrangement that provides for the care and maintenance of your pet(s) in the event of your disability or death. For more details, read the Pet Trust FAQ on our Website. To set up a pet trust, or if you need to do planning for yourself or your loved ones, please make an appointment at the Farr Law Firm for a no-cost consultation.

Hope this is helpful!

Arf Arf,
Baxter