Owners who insure their pets might be tempted to think of it as the animal equivalent of regular health insurance. While it does serve a similar function, when it comes down to it a pet’s insurance has more in common with that of a car than a human. That said, tax returns that apply to a person’s medical expenses – including insurance – are unique. This is not to say that there is no leeway where pets are concerned, however, just that deductions are only possible in specific cases.
Also keep in mind that pet parents might think of their fuzzy friends as part of the family, but when it comes to tax returns the IRS does not allow owners to claim them as dependents. Only humans qualify for this. As such, expenses related to their upkeep including medical expenses and insurance cannot be written off or claimed back.
When Is Pet Insurance Deductible?
Becoming a foster owner of a pet is considered a charitable act, and related expenses such as food or insurance are therefore eligible for deduction. However, be careful to keep track of expenses and to collect bills and receipts of costs as proof. Also make sure to have a written agreement with a shelter or organization.
As with cars, special tax rules apply to pets that serve your business. The expenses of a guard dog that you keep outside your office building, for example, can be written off, although you should try to be realistic about what breeds you declare for security purposes. For as cute as pooches like our Yoda may be, they are not exactly ferocious protector material. Breeds that are traditionally used to guard property have a better chance of convincing the IRS of their necessity. Also included in this category are pets used for monetary gain, such as in the case of a monetized YouTube channel packed with videos of your cats. Even a service dog training business or a breeder that insures the animals can benefit from this.
Expenses of animals helping people with disabilities such as guide dogs for the vision impaired or a horse employed for physical therapy are deductible. Even pets used by people with mental conditions like PTSD are eligible, however this only applies to specially trained pets. While you might think of your kitty as your emotional rock, its expenses can only be written off if it was purposefully trained for the role.
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