Tax Deductions For… Pets?

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Having a pet is kind of like a hobby. But, you can’t claim a hobby as a tax exemption (except under some very strict rules.) Still, you can turn your pet into a business. And, that means paying taxes. Here are some tips you may want to consider if you decide to claim a pet on your tax return, business or otherwise. Just don’t come banging on our door if you get audited. Or we’ll have to let slip the Dogs of War…
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Guard Pet Exemptions

The most common exemption most taxpayers claim is the Guard Dog expense. If that’s the case, make sure it’s realistic. There’s nothing more aggravating to an IRS agent than digging through a tax return only to find you’re claiming a Chihuahua as a junkyard dog…
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Guide Pet Exemptions

Claiming a pet as a guide animal has gotten plenty of taxpayers in big trouble with the IRS, if the agent discovers it’s all a dodge. It’s like finding out an Olympic Pole Vaulter has a Handicapped License Plate. Especially if they just stole that sweet parking spot in front of the Walmart Super Center…
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Breeding Pet Exemptions

Lots of pet owners of rare breeds get into the breeding business themselves, which can be a well-paying, full-time job. If you go that route, make sure to carefully keep breeding records and certifications going back as many generations as possible come audit time. Particularly if your specialty is “American Mutt”…
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Racing Pet Exemptions

If you’re claiming your horse as a racehorse, make sure you have the proof to back it up. Same goes for Greyhounds. Or, you may have to suddenly hop on one or the other to get out of town. Quick…
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Performing Pet Exemptions

Animal Trainers often do a brisk side business having their animals perform for pay. If so, make sure none of the payments are untraceable, or, as they say, “under the table.” You can still slip Rover that occasional piece of mutton though. Just don’t let the wife see…
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Internet Pet Star Exemptions

Internet Pet Stars are a relatively new business model. If you enter “Owner Of Grumpy Cat” or “Trainer Of Surfing Squirrel” on your 1040 as an Occupation, be sure to carefully keep track of all your business expenses. As a last ditch backup, always have a YouTube clip or a .GIF handy on your iPhone at an audit. You never know when you might run into an enthusiastic fan…
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Pets Are Not Dependents

Most of us regard our pets as members of the family and, sometimes, we may even treat them like one. Unfortunately, the IRS doesn’t see it that way. So never try to claim a pet as a dependent on your income tax forms. Not even Man’s Best Friend…
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Keep All Documents In Order

Make sure that if your pet is a guard dog, you keep up to date records showing the animal’s training record, particularly if it’s ongoing. The same if your pet is an Assistive Animal. And, of course, if you’re a Breeder, that your animals are certified. Especially if one of your clients just happens to be an IRS agent…
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And, Finally…

Keep All Your Receipts! Like any business, to successfully pass an audit, you must keep all business records for at least 7 years. Most business owners NEVER throw them away. And, oh yeah, don’t leave them out near the new pups…
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