Tax season is upon us, and as you sift through receipts and forms, you might find yourself wondering if all those years as a loving pet parent can net you any savings from Uncle Sam.

While you can't claim your pet as a dependent—despite them being arguably as dependent on you as any family member—there are scenarios where Fido or Whiskers could indeed play a role in your tax deductions. Figo’s unpacking the nitty-gritty, with a helping paw from our friends at Pawlicy Advisor and TurboTax.

The bark and byte of pet deductions

First things first, the general rule of thumb (or claw) in tax law is straightforward: personal expenses are a no-go for deductions. This includes the cost of that pricey, plush dog bed or the fancy cat tree. However, don't let that discourage you. Certain pet-related expenses do qualify under specific circumstances.

When pets pay off at tax time

Wondering if Fido or Whiskers could snag you some tax breaks? Well, you can indeed deduct pet expenses on your taxes, and we’ll get into those specific scenarios below. But at a high-level, here are some costs you might be able to write off, provided they meet the IRS's criteria:

• Vet visits and treatments

• Essential pet medical care

• Food and essential supplies

• Certain training courses

• Grooming, if it's required for the animal's job or health

• Travel expenses related to the pet's duties

• Boarding costs during business trips

• Pet insurance premiums for working or service animals

If your pet plays a special role in your life, either as a service animal or a business partner, you could see some tax relief for the expenses that keep them healthy and able to perform their duties.

Now that you’ve got a quick run-down, let’s explore if any of these tax-relief scenarios apply to you.

Working animals

If your pet has a job—think guard dogs protecting a business or rental property, or a cat keeping a commercial property rodent-free—some costs related to their upkeep can be deductible. This includes food, training, and veterinary care. However, the IRS requires that the expense be ordinary and necessary for your business, so a guard Pomeranian might be a harder sell than a German Shepherd.

Fostering

For the rockstars who foster dogs or cats for 501(c)(3) approved animal rescues or organizations, out-of-pocket expenses can be deductible.

This includes food, supplies, and even vet bills, provided you keep those receipts and potentially a letter from the charity acknowledging your volunteer work. It's a way of saying thanks for giving homeless pets a second chance at life.

Service animals

Got a service animal? Good news: The IRS might have a tax break for you. If your service animal's expenses go over 7.5% of your adjusted gross income, you could be in for some deductions. Just grab a note from your doctor to show the IRS that your companion is not just for cuddles—they're a medical necessity. It's a sweet deal that recognizes the vital role your service animal plays, giving your wallet a little breather.

So what qualifies as a service animal? It’s not your average pet; it's a dog specially trained to assist someone with a disability. According to the ADA, these animals perform specific tasks related to the person's needs, like guiding the blind, detecting seizures, or calming PTSD flashbacks.

It’s their training for specific tasks that sets them apart, not just their ability to provide emotional support. To qualify, an animal must be essential for a person with a disability and trained to perform tasks directly related to that disability.

Moving expenses

Though a bit of a niche category, if you're moving for a job and meet specific IRS criteria, moving your pet can be deductible as part of the overall moving expense. After all, they're part of the family too!

For the 2023 tax year, moving expenses have tightened up, and it’s crucial to know what’s covered. If you're moving for a job and your new workplace is at least 50 miles further from your old home than your old job location was, you can include your pet moving expenses as part of the deductible moving costs. This includes transportation costs for your pets.

However, it's important to note that after the Tax Cuts and Jobs Act, this deduction is only available to active military members moving due to military orders.

Performance pups and “pet-fluencers”

Performance animals, those that entertain and captivate audiences, whether in commercials, movies, competitions, or even on TikTok (yep – pet influencers qualify) can also fetch some tax benefits.

Expenses related to their upkeep, training, and travel can potentially be deductible if these activities generate taxable income. This means the costs to maintain your pet in tip-top shape for the spotlight—think veterinary care, grooming, and training—could be considered business expenses.

Charitable deductions

Pet parents who work with their pets in volunteer capacities, such as therapy animals visiting hospitals or schools, can also find tax relief. While the pet’s expenses themselves might not be deductible, any unreimbursed expenses related to volunteering (like travel or supplies provided to the charity) can be.

Make sure the organization you're volunteering with is a qualified charity under IRS rules and keep meticulous records of all your donations and expenses.

What about pet insurance expenses?

Alright, diving into the world of pet insurance and taxes, here's the scoop: Generally, pet insurance expenses don't qualify for tax deductions. This rule applies because, in the eyes of the IRS, pet insurance is seen as a personal expense, kind of like your Netflix subscription or your gym membership.

However, there's an exception if you have a service animal. Like the deductions above, since these pets are all about aiding those with disabilities, the costs related to their health and maintenance, including pet insurance, could be considered medical expenses. So, if your pet is a certified service animal, you might just be able to deduct those pet insurance costs. Remember, the key is whether the expense is directly connected to the care and well-being of a service animal for it to potentially hit the deduction sweet spot.

Additionally, if your pet is a working animal, like a farm dog herding sheep or a guard dog protecting your business property, their costs, including pet insurance, may tilt towards being tax-deductible. It's all about proving that these expenses are directly related to their job.

So, if Fido's on the payroll for his top-notch security skills or Bessie the Border Collie is keeping your sheep in line, their pet insurance might just qualify as a legitimate business expense. Again, just make sure to keep detailed records to show how their roles are crucial to your business operations.

Crunching the numbers

Now, let's keep it 100—while these opportunities can offer some relief, they're not a one-size-fits-all solution. The vast majority of pet expenses will remain just that: expenses. Yet, for those who can leverage these deductions, it's worth exploring to potentially ease the financial load come tax season.

While you might not see a massive deduction from these categories, every little bit helps, right? According to Pawlicy Advisor, even small deductions can add up, especially when you're meticulously managing your finances as a pet owner.

TurboTax adds that understanding the nuances of what qualifies can make a significant difference, emphasizing the importance of consulting with a tax professional if you're unsure.

Maximize those sweet, sweet savings

• Documentation is key: Keep detailed records of all qualifying expenses. Receipts, invoices, and any relevant documentation can be your best friend if the IRS has questions.

• Not all pets qualify: Personal pets, no matter how much you adore them, generally don’t unlock tax benefits unless they fall into one of the specific categories mentioned.

• Consult the pros: Tax laws can be as complex as deciphering your cat’s moods. When in doubt, consulting with a tax professional can save you a lot of headaches (and potentially money) down the road.

• Itemize for maximum benefit: So you want to claim your pet on your taxes? It might be more work but avoid taking a standard deduction. Because you need to show the specific expenses that relate to your soulful sidekick to Uncle Sam, you’ll need to do some manual math and write them off as itemized deductions. However, according to Pawlicy Advisor, “If all of your itemized deductions from the 2023 tax year don’t amount to much, you’re probably better off taking the standard deduction versus claiming your pet on a 2024 tax return.”

What’s new this year?

Keeping abreast of changes each tax year is crucial. For the 2023 tax year, pet parents should be aware that while there haven’t been monumental shifts specifically targeting pet deductions, broader tax law changes could impact your overall filing. This includes adjustments to standard deductions, tax bracket shifts, and for some, the reinstatement of certain deductions that may have phased out in prior years.

Always check the latest IRS guidelines or consult with a tax professional to see how these changes might affect your tax situation.

Last licks on tax tips for pet owners

It’s clear that while our pets can't directly fetch us a bucket of deductions, there are paths through which they can contribute to our financial well-being in small but meaningful ways. So, as you tackle this tax season, take a moment to appreciate your pup or kitty, not just for the joy they bring into our lives but perhaps for a little tax relief, too.

Who knows, in a few years, we might just be ticking boxes to add our pets as dependents on our tax returns. Sounds out there, but for many of us, pets are practically our kids—minus the homework but with all the love (and the hefty bills too)!

PS - we're not experts, so don't take this as infallible financial advice. When in doubt, always consult with a qualified tax preparer for official guidance.

Lizz Caputo is the Manager of Content Strategy at Figo, animal enthusiast, and owner of a rescued senior American Bully. Her hobbies include checking out new restaurants in her area, boxing, and petting dogs of all shapes and sizes.