Due to the non-passing of the HAPPY Act (HR 3501) at the conclusion of the 11th Congress, many pet owners were left dejected. The passing of the bill could have been of great significance for pet owners as that would have surely relieved them of a huge burden and would have allowed them to have a tax credit of $3, 500 besides qualifying expenses.
Amidst these days of depression and recession, pet care costs might be quite disturbing for the pet owners. When the tax returns of a single person with a pet dog shows ‘two dependents’, it adds to all the frustration. Yet one cannot remain separated from his pet. Having showered so much love on it throughout the years, one naturally grows totally attached to his pet.
But unfortunately the current scenario does not allow the deduction of all kinds of pet care expenses. No matter how much a pet owner wants, the dog’s food, exercise equipment, leash or even its sweaters are not deductible.
But in spite of this, the Congress has allowed certain expenses to be made legitimate and for that certain rules and regulations have been imposed.
Pets as movable property
There are some opportunities for the pets to qualify as moving objects. For example when a pet owner is moving his belongings because he has been transferred to another city for his job, then the pet will be considered as a part of the family and can automatically qualify for moving expenses deduction.
Pets as guards for home business
Another instance when the pet expenses would become deductible is when the dog is a guard dog. But that is no easy job as the dog needs to be perfectly trained and registered as a trained dog. Also, preferably the dog has to be either a Doberman or a Rottweiler or a German Shepherd.
When donations are made to the animal shelter
It has been made clear that the adoption fees will not be considered as deductible but if a donation is made to an animal shelter belonging to a non-profit organization then that can qualify.
Pets as service animals
The law states that if a pet is kept to assist an individual with mental disabilities then its purchase, training and upkeep will be deemed as medical care. If it can be ensured that the dog does not only provide company to the owner but plays a vital role as being the service animal during his illness, then the deduction can be contemplated.
Pets used for income purposes
If the pets are the main source of income, then its acquisition and maintenance costs could be exempted from. Livestock owners have a great advantage in this case as the livestock expenses are totally tax deductible due to them being looked upon as business expenses. What works even more for livestock is the fact that the livestock is considered perishable and naturally deduction can be done for the depreciation of livestock as well.