Looks like you’ve got two options if you’re living anywhere in the continental U.S. right now: heatstroke or flooding. Which means, you’re either hiding out in the conditioned air indoors, or you’re looking for ways to keep your house water-free.
And that means you want to make sure your house isn’t wasting energy and is safe from the elements.
Installing new exterior doors and windows to better insulate your Richland County home and regulate your energy usage is pretty appealing when you’re in that situation.
And the IRS wants to reward you for those kinds of improvements.
The Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit could help get you some tax breaks (exception: landlords making improvements to a rental).
This also applies if you’re buying solar panels to soak up those summer rays and be a little greener in your energy usage.
Every nickel and dime counts these days, so why not be strategic about your home improvements?
As your tax pro, when I’m in between tax seasons, I like to spend time focusing on ways to help my Columbia, SC clients reduce the amount they’re giving Uncle Sam. Because I don’t just want to get your taxes filed for you. I also want to make sure you’re being strategic with them. The tax code has built-in savings for a variety of situations, so you should be capitalizing on them.
This especially applies when you’re investing in or giving your money to worthy causes, either for your betterment or someone else’s. This can be true when it comes to animal betterment too.
Yes, some cases exist where having an animal friend can open the door to deductions. And not that you typically get an animal for that reason — mostly it’s just the snuggles that make you happy. But if you have an animal for one of the below reasons, pet deductions could be a part of your savings strategy this year…
Pet Deductions That Lower What Columbia, SC Taxpayers Owe
“Animals are such agreeable friends – they ask no questions; they pass no criticisms.” – George Eliot
Being a pet owner has its perks. Cute, furry friend who loves and adores you? Check. But one perk that doesn’t come with your pet (typically) is saving money on taxes.
Still, there are some interesting and lesser-known scenarios where pet-related expenses can be claimed under specific conditions.
Let’s explore some under-utilized pet deductions…
Pet Deduction #1: Service animal support
Many individuals have been diagnosed with a physical or mental condition that requires a trained therapy animal. There are around half a million service dogs employed in the U.S. currently.
If a doctor has prescribed a trained service animal to help with a medical condition, you can claim your fury friend as a medical expense. The IRS allows you this claim because these are working animals, not pets.
Things like food, vet bills, grooming, and training all qualify as medical expenses. Just remember, that these expenses must exceed 7.5 percent of your adjusted gross income.
Pet Deduction #2: Business buddy
If you have a guard dog that looks over your business after hours, you might be eligible to write off similar expenses (food, vet, training, etc.) for a job well done.
I say “might be eligible” because, like most other deductions you claim for your business, you’ll need detailed proof of the dog’s working hours on a weekly basis.
Now, if your “guard dog” is just your dachshund snoozing on the office armchair, the IRS will have some questions about claiming this deduction. So, make sure it’s actually a guard dog you’re claiming.
Pet Deduction #3: Being a foster home
Helping a pet find a forever home takes time, so shelters will look for volunteers willing to foster the animals until a permanent placement can be found. If you choose to volunteer for this noble cause, you can deduct any unreimbursed care costs (food, supplies, and even veterinary bills).
However, this does not apply if you are a rescue lone ranger. You must be affiliated with a 501(c)(3) organization in order to claim deductions. But you could start your own group and get tax-exempt status if there aren’t any qualified groups in your area.
Again, it’s important you keep scrupulous notes and documentation about what you spend on your foster pets before you apply for a charitable deduction.
Two other pet deductions
Moving. If you’re relocating for a job and your move qualifies for the moving expense deduction, you can include the costs associated with your old pal, Spot.
Hobbying. If your pet is part of a hobby that generates income, such as breeding, animal acting, or showing animals, you may be able to deduct some expenses up to the amount of income generated. However, there are stricter hobby loss rules, so consulting a tax professional is highly recommended.
These are all unique situations and can save you on your taxes. Take cat rescuer Jan Van Dusen. She successfully argued in tax court to claim tax deductions equaling over 12K in expenses for fostering cats back in 2011. Every little bit counts when you’re reducing your tax bill.
While you care for your animal friends in these situations, we can help take care of you with the IRS. And if you want to look at the second half of the year and figure out any other tax moves to make to keep more of your hard-earned money, I’m here for you:
Saving you while you save them,
Akuathayre Snell