As a pet owner, there’s nothing quite like the love and companionship that our furry friends provide. But did you know that starting in 2023, you may be able to claim your pet as a tax deduction? Yes, you read that right! In this article, we’ll explore how to go about claiming your furry friend on your taxes and what it means for you.
Why Are Pets Now Tax-Deductible?
The American Pet Products Association estimates that Americans own nearly 85 million pets. With so many people owning pets, it was only a matter of time before lawmakers recognized the financial challenge pet ownership can bring. Hence why they created the Animal Financial Responsibility Act (AFRA) which allows taxpayers to deduct up to $1,000 per qualifying animal.
Who Qualifies for the Deduction?
To qualify for this deduction, pets must meet certain criteria:
– They must be classified as an “emotional support animal” or “service animal”
– You need certification from healthcare motived professional or veterinarian
– You must have documentation proving that they are beneficial to your health such as prescriptions and medical reports
Here is further details:
Emotional Support Animals (ESA)
Emotional Support Animals are animals — usually dogs — whose mere presence provides their owners with emotional comfort. To qualify under AFRA standards as an Emotional Support Animal (ESA), individuals require certification from their physician stating that they suffer from one of several disabilities including post-traumatic stress disorder (PTSD), anxiety disorders or obsessive-compulsive disorder (OCD).
Service animals are specifically trained animals who help people with disabilities carry out important tasks relating to their daily life. Common examples of service animals include guide dogs for those with visual impairments or hearing dogs trained keep alerting deaf individuals when sounds occur around them
What Expenses Are Tax-Deductible?
Pet owners can deduct certain expenses related to their pets:
If you have pets that require healthcare, such as dogs with arthritis or cats with asthma, the costs for medical treatment may be tax-deductible. You must have proper documentation proving your pet’s need for medical care and their beneficial impact on your overall health.
AFRA allows taxpayers to deduct certain expenses related to animal supplies if they are necessary for the ESA’s/Service Animal’s health and well-being. These may include items such as special food if prescribed by a veterinarian or grooming equipment.
How Can You Claim Your Furry Friend?
To claim this deduction, you’ll need to file Form 1040 along with Schedule A: Itemized Deductions. Under “Other Miscellaneous Deductions,” you can then list your pet-related expenses. Keep in mind that all documentation needs to be kept on hand should the IRS ever audit these deductions, which is always possible considering adopting animals is not an exact science
With the AFRA act changing again next year we hope that more information will follow soon about how best utilising this deduction moving forward.
Owning a pet can bring so much joy into our lives – it’s only fitting that we’re able to receive some financial benefits too! If you feel like claiming your furry friend could make sense for you come talk with our chatbots who might get some adorable pet pictures out of it at least
Can I claim my pet as a dependent on my taxes?
No, you cannot claim your pet as a dependent on your taxes. Pets are considered property and do not meet the IRS definition of a dependent.
Can I deduct any expenses related to my pet on my taxes?
Potentially, yes. If you own a business or farm, you may be able to deduct some expenses related to caring for pets that are used for business purposes (such as guard dogs). Additionally, some veterinary expenses may be tax-deductible if they qualify as medical expenses.
What is the difference between claiming a service animal versus a regular pet on my taxes?
Service animals can be deducted as medical expenses if their care is needed due to a physical or mental disability and if the costs incurred exceed 7.5% of your adjusted gross income (AGI). Regular pets cannot be deducted unless they were used for business purposes or qualify under certain circumstances mentioned earlier.