Did you know a junkyard owner can deduct the cost of cat food as a business expense?
Did you know if you have a service animal or guide dog you can deduct the cost of buying, training, and maintaining it?
Finally, did you know if your pet becomes an Internet sensation you might be able to deduct related costs as business expenses?
Now, noticed I wrote business expenses?
Yes, we can deduct our animals!
But!
Your pet’s activities must be considered a business–not a hobby–for expenses to be deductible.
The IRS has a very strict multi-step procedure they use to help make the determination, addressing the time and effort spent into making your activity or business profitable and whether you maintain accurate books and records.
A hobby activity is done mainly for recreation or pleasure. Once, or if a hobby becomes profitable, then it could and should consider classifying as a business entity.
So, in simple terms, if you, like many in Norwood, feed your neighborhood cats out of enjoyment–no, those expenses are not deductible–but if Norwood LLC, for example, has expenses related to the care of the neighborhood animals, then those areas, like food and shelter can be considere expenses.
But here comes the biggest factor: You must generally consider these factors in determining whether an activity is a business engaged in making a profit:
- Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
- Whether the time and effort you put into the activity indicates you intend to make it profitable.
- Whether you depend on income from the activity for your livelihood.
- Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
- Whether you change your methods of operation in an attempt to improve profitability.
- Whether you or your advisers have the knowledge needed to carry on the activity as a successful business.
- Whether you were successful in making a profit in similar activities in the past.
- Whether the activity makes a profit in some years and how much profit it makes.
- Whether you can expect to make a future profit from the appreciation of the assets used in the activity.
But before you laugh this off, think again! See cats on Facebook? See dogs on Instragram? Raccoons on YouTube? Yes, we see them all the time. Let me ask you, however, if you’re like someone I know, that has a T-shirt company and Facebook ads with Leslie the dog wearing the company
T-shirt—are the associated expenses tax deductible? You bet they are.
We all love our animals!. We want to take care of neighborhood animals. It’s not hard, and by following strict rules, very tax-deductible. So with this year being the first full year of the Trump tax cuts let me suggest to talk to your adviser about it now for future deductions so you can get a “woof woof” of a refund check in the future.
Under the IRS publication: 535, Business Expenses, you can find a bunch more information
Professor Anthony Rivieccio, MBA PFA is the founder and CEO of The Financial Advisors Group, celebrating its 20th year as a fee-only financial planning firm specializing in solving ones financial problems. Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Klipingers Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Television, the Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Bronx News, thisisthebronx.com and The Bronx Chronicle. Mr Rivieccio is also currently an Adjunct Professor of Business , Finance & Accounting for both, City University of New York & Monroe College, a Private University. For financial assistance , Anthony can be reached at (347) 575-5045. If you would like a FREE copy of The Forbes Magazine 2018 Tax e-Guide just give our office a call. Feel free to visit their FACEBOOK Business page for past Financial Focus articles: www.facebook.com/
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Welcome to the Norwood News, a bi-weekly community newspaper that primarily serves the northwest Bronx communities of Norwood, Bedford Park, Fordham and University Heights. Through our Breaking Bronx blog, we focus on news and information for those neighborhoods, but aim to cover as much Bronx-related news as possible. Founded in 1988 by Mosholu Preservation Corporation, a not-for-profit affiliate of Montefiore Medical Center, the Norwood News began as a monthly and grew to a bi-weekly in 1994. In September 2003 the paper expanded to cover University Heights and now covers all the neighborhoods of Community District 7. The Norwood News exists to foster communication among citizens and organizations and to be a tool for neighborhood development efforts. The Norwood News runs the Bronx Youth Journalism Heard, a journalism training program for Bronx high school students. As you navigate this website, please let us know if you discover any glitches or if you have any suggestions. We’d love to hear from you. You can send e-mails to norwoodnews@norwoodnews.org or call us anytime (718) 324-4998.
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