A pet deduction could save taxpayers billions of dollars.
More than 32 percent of households own a cat and 37 percent have at least one dog, according to the American Veterinary Medical Association. A tax credit for owning dog would be a boon to millions of households, but as of 2010 no credit exists for pet owners. Some politicians in Congress want to change this fact of Internal Revenue Service tax code and a pet might still be a tax benefit.
Identification
As of 2011, the IRS does not have any specific deductions or tax credits geared toward pet owners, according to ABC News. In some cases, however, you can deduct the cost of owning a pet as a business expense. A business owner, for instance, might be able to deduct the expenses incurred for a guard dog to keep his business safe. He could also probably depreciate the price of a guard dog over its anticipated life. Deductions, however, only reduce gross income and are not a dollar for dollar deduction like a credit.
Considerations
The IRS will probably scrutinize a deduction involving pets. One couple went to tax court to deduct the expense of feeding wild cats to help exterminate rates and scare off snakes -- the couple eventually won their case, according to Intuit. If you relocate for a job at least 50 miles away from your old one, you could deduct the expense of moving your pet, because the IRS considers them a personal effect in this case.
Potential
It is possible that Congress could introduce legislation to give all pet owners a tax break. In 2009, Michigan Congressman Thaddeus McCotter introduced HR3501 or the Humanity and Pets Partnered Through the Years Act (HAPPY Act). This would allow pet owners to deduct up to $3,500 in expenses, such as veterinary care and food -- not a tax credit, but probably enough to cover the cost of owning a pet. As of March 2011, this act has yet to pass.
Tip
Taxpayers with a disability that requires a guide or other "service animal" can deduct the expense of training and upkeep of those animals under the medical expense deduction, according to Wallet Pop. To deduct any pet-related expense, however, you must itemize your taxes. In the case of medical expenses, the total cost of a service animal and other medicinal costs must also exceed 7.5 percent of your gross income.
Tags: deduct expense, cost owning, deduct expenses, gross income, service animal