5 instances where pet owners may qualify for tax breaks

The IRS takes the position that the money you spend on Fido or Fluffy is generally a personal expense. But there are a few loopholes. Here are some tax breaks you might be missing out on.

Guard dogs

Generally, it's difficult to claim your pet as a business expense. But if your pet guards your business location, you might be able to deduct the costs of keeping him fed and healthy. Size and breed matter — Yorkies may be a tough sell to the IRS. Deductions could include dog food, training and vet bills.

Cats used for pest control

You might also be able to deduct costs associated with your kitty that keeps your business property free of mice, rats and other vermin. Remember that if you're trying to claim your working pets, you'll probably have to convince the IRS that keeping the animal is "ordinary and necessary." In other words, "hiring" a cat or dog must be "common and accepted in your trade or business."

Offsetting hobby income

If you make money showing your pet — which the IRS might consider hobby income — you may be able to claim a tax break for related expenses. If a show dog wins prize money, the expenses incurred to train, show, etc., are deductible up to the winnings. The process to deduct these expenses requires that you itemize deductions and, even then, restrictions apply that might not result in substantial tax savings.

If you foster animals, you might be able to take advantage of tax benefits for charitable contributions. Unreimbursed expenses incurred caring for foster animals from a qualified nonprofit are deductible as charitable donations. If you volunteer at a shelter, keep track of mileage for trips made to further the organization's work.

Guide dogs and service animals

If your pet helps you in a health-related capacity, you'll likely get a tax break. You can include the costs of purchasing and training guide dogs for the blind or deaf. This also includes veterinary, food and grooming expenses. Pets used in therapy, such as in the treatment of post-traumatic stress disorder. are covered as well with documentation from a medical professional.