When it comes to tax deductions, there's something to wag about for animal lovers, rescue groups and for people who foster (or are considering) fostering a pet: It's now tax deductible!
A new landmark court case has volunteers barking up a storm about the paw-sitive news! What are the keys to getting the deduction?
"The basic requirements are that the expenses have to be directly related and solely attributable to the rendition of services to a qualified 501(c)(3) organization," said CPA Kevin Long, a Massachusetts-based tax attorney.
Long warns if you're going to claim the deduction, you need to document.
"In addition, you need to have documentation to support the expenses, and the organization needs to provide written acknowledgement for expenses over $250," said Long.
"The written acknowledgement must contain a description of the services provided, a statement of whether or not the organization provided any goods or services as reimbursement, a description and good faith estimate of the value of any goods or services provided as reimbursement and a statement that the only benefit you received was an intangible one (if no reimbursement was made). The written acknowledgement must be obtained on or before the earlier of the date you file your tax return for the year that you made the expenditure or the due date for filing your tax return for that year."
This new development is the cat's meow for people who love animals. But how do you make sure you qualify?
CPA Bryan Knuff shares his tips:
Unreimbursed expenses must be directly connected with and solely attributable to the rendition of services to a charitable organization.
Document all of your expenses. Keep a journal if you need to but detail any expense that is not obvious. Keep your receipts and cancelled checks. You can claim any expense related to their care including vet bills, medicines, supplies, food, etc. It is apparent you can claim cleaning supplies, and a portion of your home utilities if your operation is substantial enough.
For charitable purposes, you can deduct 14 cents per mile.
Be sure what you claim is reasonable.
For any expense incurred over $250, get a receipt from the charity.
Regarding expenses from a different tax year, they must be deducted in the year incurred. You can amend but only up to 3 years back.
If your head is now aching after sifting through "Foster Pet Tax Deductions 101," animal rescue groups say another bottom line you should remember: You will be save furry, cute lives. The moment a dog or cat gets sprung from a "kill shelter" into a foster home, they're off death row.
Katherine Martin, from Lucky Lab Rescue and Adoption, is thrilled by the court decision. "Being able to take a tax deduction for fostering is a huge incentive for people to get involved. These dogs really really need placement and that's the only thing that saves them is to have a foster home, a nice place to go until they can be rehomed. We pull these dogs from the shelter and they need time to decompress, be vetted, and be in a loving home. Any incentive is wonderful," said Martin.
Some people think fostering a pet would be emotionally tough, they say, "Oh I'd get too attached." But remember the alternative to not opening your door and heart for a bit could mean "dead dog or cat walkin" for some animals. Seriously, it's foster home or death. It's that terrible and that black and white.
Many fosters say they absolutely get attached to their fosters, but they know they helped save that pet's life. If they didn't foster that animal would have been killed in a shelter. Some foster parents stay in touch with the adoptive family and even visit.
If you'd like to get involved in animal rescue, or have a favorite breed you'd like to foster, just jump online and search for local rescue groups, (Example searches: "Massachusetts Lab rescue", "California Pug rescue", "Chicago Calico rescue" or even "Austin cat rescue") they'd love to hear from you… and Uncle Sam sounds like he'll be ready to accept your tax deduction for helping to save a life!
This Watchdog Mary article originally appeared in Yahoo! and Galtime.com