If you have a pet, you know their expenses add up quickly. Annual averages for pet care can often exceed $2,000. So, you might be asking yourself, does owning pets have any tax benefits? The answer is, … well, it depends.
First, it is important to note that to receive any tax benefit for your pet, you cannot claim the standard deduction. To claim a pet deduction, you must itemize your deductions by filing Schedule A with your federal tax return. This may sound daunting; however, it could be worthwhile if you can claim other itemized deductions. In 2022, the standard deduction granted by the IRS is:
- $12,950 when filing: Single or Married Filing Separately
- $25,900 when filing: Married Filing Jointly
That means, if your itemized deductions do not exceed the standard deduction, this tax break is not advantageous to seek.
Another requirement to receive a pet tax benefit is that your animal must be a documented Emotional Support Animal (ESA). It is essential that your pet helps perform critical services or acts in a medical function. Documentation by a physician is necessary to prove your animal helps with a diagnosed mental or physical condition. Documentation is also vital in proving you need an Emotional Support Animal. This paperwork grants your Emotional Support Animal to be classified as a qualified medical expense.
So, now that we know you are itemizing your deductions and that your pet qualifies as an Emotional Support Animal. . . what exactly can you deduct? The following are examples of what can be considered a qualified medical expense: veterinary bills, medical treatments, food, training classes, grooming services, boarding fees, and pet insurance to name a few.
In 2022, you can deduct the cost of medical expenses for yourself, your spouse, and your dependents. That means, if your spouse or child needs an ESA, it can be deducted. Keep in mind, the medical deduction is limited by the amount your unreimbursed medical expenses exceed 7.5% of your adjusted gross income. To break that down, if your adjusted gross income (which is found on line 11 of page 1 in your federal tax return) in 2022 is $75,000 and your total unreimbursed medical expenses including ESA expenses are $7,000, you can deduct $1,375.
A friendly reminder is to keep all receipts of qualified pet expenses and physician documentation in case of an audit by the IRS.
We understand that tax law can be confusing and hard to decipher. Here at ADKF, P.C., we have dedicated tax specialists that can help you navigate the tax code to your benefit and ensure you are getting every deduction possible. If you are curious whether you qualify to receive an emotional support animal deduction, please reach out to ADKF, PC. and we are happy to help you!