As Uncle Sam comes-a-callin' this time of year, I decided to enlist my accountant and fellow animal lover Mary Tonden to share some priceless pet-related tax tips with you.
To all you tax-paying animal lovers out there,
I can’t tell you how many clients ask me if they can claim their beloved pooch or kitty as a tax deduction. Unfortunately, until our pets get their own social security numbers, all the kibble in the world will not lower our tax liability. That said, here are several ways your love for our furry legged (or feathered or gilled) friends can pay off at tax time. Remember to check with your tax preparer to make sure these tips apply to your particular situation.
Give Money: Any cash donation you make to a qualified charitable organization is tax deductible for those who itemize deductions (ask you accountant if this is you!) Don’t know if your favorite rescue fits the bill? Check out IRS Publication 78 for more information on qualifying organizations.
Give Stuff: Local animal shelters need your newspaper, old towels, sheets, pet beds, sweaters, crates and blankets. They may also be looking for items such as digital cameras, video recorders, printers, fans, heaters, cleaning supplies, office equipment, printer paper, carpeting, and furniture. You can also purchase and donate new items including food, toys, new litter boxes, dog beds, and cat trees.
Even if your donation isn't useful to the shelter itself, they might be able to use it to raise funds. The value of items donated can be a tax deduction! Again, assuming they are a qualified organization, you can deduct the fair market value of the property at the time of the contribution, so keep track of what you give and when, and be sure to save the receipts of those newly purchased items.
Give Your Time: While you typically cannot deduct the value of your time, you can deduct mileage traveling to and from the shelter or rescue. For 2010, the IRS allows a deduction of 14 cents per mile driven in service of a charitable organization. Keep a notebook in your car to track mileage, or use an iPhone or Android app such as Mileage Pad.
Partner with an Organization: If you are providing a service such as trap, neuter, return (TNR), or ongoing food and medical care for a colony of cats in your area, find a registered non-profit animal rescue to affiliate with and have them write a letter to document your charitable work to the IRS. As a result, your out-of-pocket expenses may be deductible.
Make It a Business Expense: There are some instances in which caring for animals is a legitimate business expense. If you own a business or farm, properly caring for, sterilizing, and feeding a few feral cats can be a green way to manage a rodent population or simply a way to keep them away from your inventory. Ditto for a guard dog. (Be sure he is being paid with love and shelter too!)
Foster an Animal in Need: This is a great alternative for those who aren't in a position to take on a pet of their own. You can deduct many of the costs you incur including food, veterinary expenses, cleaning products, medications and supplies. Just be sure to ask the organization for a letter stating that you are a registered foster and keep it in your tax file.
Keep in mind, the smallest gesture can brighten the life of an animal in need!
And if you keep meticulous track of all that you do, you might just find yourself with a fatter refund!
Mary Grace Tonden, Tonden & Associates
Thanks Mary for such great info!
Dr. Pia Salk