For those of you who have pets, you know that they're like our little fur babies: They lounge on the couch with us (or is that just me?) while we binge-watch our favorite shows, cuddle with us on uneventful weeknights; and there are even times when we might let them have a nibble of the good table food. So of course when tax season comes around — after you've spent the entire year dishing out cash for veterinary visits, cat litter and expensive pet food — you naturally wonder, do pets count as dependents for taxes?
As of March 26, the answer is: it depends. In most cases, if you own a pet that helps you or someone else cope with a disability, it's considered a service animal under the Americans with Disabilities Act (ADA), and you may be eligible for a tax deduction. But please be advised that slapping a "service animal" vest on your corgi doesn't cut it.
According to the IRS's website, if you've had to dish out cash to train and maintain a service animal, you can include the amount in your medical expenses. An excerpt from the site reads,
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-impaired 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.
The site also details a couple of other ways people can receive tax deductions for animals: if a person raises a service animal for charitable organizations like Guide Dogs for the Blind and incurs expenses for doing so, they may be able to claim an itemized deduction. Or if a person fosters or rescues animals for any IRS-approved charity, the funds that they've spent on things like food or veterinary bills might also be deductible.
And in case you still don't fall into any of those categories, there are a few more ways that you might be able to catch a tax deduction: According to Bankrate, if you have a physical or mental condition that benefits from having a therapy animal around, they might count as a medical expense. (But please note that cuddling with your dog when you're feeling down doesn't count.)
Also, the site claims that if your business uses a "Beware of dog" sign that has prevented break-ins at your headquarters, you may be able to get a business deduction. But it also depends on whether or not you have proof of medical expenses (food, veterinary bills, etc.) to show that your pet is in good health, as well as records of the time they've spent on the job. However, before you run to make edits on your taxes, you should also be advised that you're more likely to catch a break for typical guard dogs like German shepherds or rottweilers versus a pug or poodle. Just sayin'.
Aside from that, if you've moved and had to ship your pet to your new home, you may be able to deduct the shipping costs from your taxes. The site recommends that you file the claim on Form 1040 and Form 3903.
Then again, if your pet won some kind of cash prize at a pet expo, the winnings might also be considered taxable income, meaning you might owe more.
But no matter how much any of us insists that our little guinea pig or pet turtle is a member of our family, random pets cannot be claimed as dependents for taxes. Which sucks, because, according to the American Pet Products Manufacturers’ Association, Americans spent more than $62.75 billion on their pets in 2016 — up from over $58 billion just two years prior. And though you (and I) might be included in that contribution, there's not one thing you can do to catch a tax break.
But there is a light at the end of the tunnel: now that this is all cleared up, you can finally get back to cuddling with your beloved furry friend. And that's a win-win situation for all.