At the end of July of 2009, Rep Thaddeus McCotter brought out the HAPPY Act (Humanity and Pets Partnered Through the Years) bill. The HAPPY Act bill aimed at allowing a tax write off of up to three-thousand five hundred dollars every year for pet care-related costs. The current status of the bill at the date of this publication: "Referred to House Committee on Ways and Means." It appears, this isn't the first priority at the House of Representatives, you could have a divergent opinion on that.

So what kind of pet- and animal-related expenses are eligible for a tax deduction?

The family pet is near and dear to us. Some may think our family pet worth its weight in goldpriceless). But, pet-related expenses are, in some circumstances, eligible for tax write-offs. For example, when moving, a pet owner could file for a tax deduction for the expenses borne by moving a family companion, in tax law to this purpose, a pet can be deemed a personal effect, and therein our pet cat or dog is counted likewise.

Also a company may very well be permitted to deduct for the costs related to having a guard dog. Or a volunteer sponsor of an animal that serves a theraputic function, such as a guide dog, may be able to write off the veterinarian bills, and similar unreimbursed expenses (these are considered charitable donations). And there have similarily been court rulings which have permitted tax write-offs for costs associated with caring for animals serving the physically-impaired, visually-impaired, and hearing-impaired persons. And there are as well tax deductions in expenses related to the care of animals considered part of an animal-breeding business.

TheCat Lady Case--Van Dunsen vs Commissioner

In 2004, Van Dusen shared her living space with nearly 80 cats and kittens (seven of them she called personal pets). She volunteered for a charitable organization (called "Fix our Ferals") with the main intention of fixing wild cats. The volunteer wrote off about $12,000 on her return. The Internal Revenue Service argued that Ms. Van Dusen was rescuing cats of her own volition rather than incurring expenses as a volunteer for a charitable organization. The court refused the stance. The court did agree with the Internal Revenue Service, however, that quite a few of the expenses (DMV fees, Costco membership dues, wet/dry vacuum repair cost, and State Bar dues ) couldn't constitute exclusively charitable expense.

Ultimately, all of the individual expenses which exceeded $250 were disallowed because Van Dusen failed to provide corresponding required verification for these charitable donations (like a contemporaneous or simultaneous created acknowledgment from the donee organization.) For this write-off to be permissible, the donee must also file a return with the IRS reporting the similar information comprising the written acknowledgment, such as: 1) the amount of cash contributed; 2) a good-faith estimate and description of any goods or services received in exchange; and 3) if the donee supplies any intangible, immaterial or religiousbenefits, a statement to that effect). So if you want to deduct the expenses for your fifty cats, make certain you are acting on the part of an satisfactory charity and be sure you receive the necessary documentation.

How can I distinguish between non-tax deductable and tax deductable animal care-related expenses?

So you see there are avenues for tax write offs associated with the expenses incurred by the care of animals and pets. And there are instances when these expenses are non-tax deductable. If you are looking into a tax write-off related to the expenses of taking care of pets, seek out the guidance of a certified public accountant. Do not imagine that because your neighbor owns 15 cats, she or he is able to give you qualified pet-related tax deduction information and counsel.

In one peculiar illustration, a gardener attempted to write off for the expenses of attending to a dog which helped him pull a wagon on the job, presumably without the counsel of his CPA. This rewarded the lawn specialist an audit. We may assume that this brought about some working-relations pressure, however we are unable to authenticate this possibility. And assumedly it is not likely that either dog or boss will speak out anytime soon.