Fostering Animals is Free! Tax Deductions for Fostering

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Thanks to a June 2011 ruling by a U.S. Tax Court Judge, if you foster or rescue an animal, your expenses from things like pet supplies, the veterinary bills, cleaning supplies and utility bills that is dedicated to taking care of the animal- is just a simple tax write off. Now having said that, if you foster a stray that you find without working with a charitable organization, you will definitely rack up some karma points, but the IRS will not let you deduct a dime. So, if you want to write off the cost of your foster dog or cat, make sure you are taking care of them at the request of a rescue or shelter that has received its tax-exempt determination from the federal government. Not only shelters and rescues, it could be at the request of ANY charitable organization that holds 501 (c) (3) designation as a Not-for-Profit organization. Thus, the normal rules for charitable deductions also apply here. If you foster or rescue animals, your out of pocket expenses (food, medicine, and veterinary bills) may be deductible for charitable purposes as long as you:

  1. perform services on behalf of a qualifying charitable organization.
  2. keep excellent records which clearly show that the expenses are for charitable and not personal expenses.
  3. get a contemporaneous acknowledgment of your contribution from the qualifying charitable organization.
  4. remember that the value of your time is not deductible.

It is worth mentioning that the person we owe all this to- Ms. Jan Elizabeth Van Dusen. Ms. Van Dusen, a resident of Oakland, California, single-handedly took on the IRS in 2011. Back in 2004, she had claimed a $12,000 charitable-contribution deduction on her taxes which was from taking care of her 80 cats (Yes, 80 members of the feline species!). Fortunately, the court ruled in Ms. Van Dusen’s favor to claim her foster pet expenses, and foster parents around the world celebrated!

Now the IRS gets a bit tricky when it comes to expenses of personal pets. The IRS will not let you claim your fur babies as dependents — they’re generally considered a “personal expense”. However pets can still get you some extra tax breaks but in very specific cases, particularly if you have a service animal or you’re fostering a pet from an IRS-approved non-profit.

There you go! One more reason to become a foster parent today and bring home a new fur buddy. Remember you are saving a life. You feel good, your shelter or rescue group helps more animals, and on top of that your foster pet is happy, healthy, and well-socialized. Talk about win-win-win!