As cat parents, we all wish, come tax time, that we could claim our feline family members as dependents or, at the very least, claim some of the expenses for their care on our tax return. While you can’t do it for your own cats, you may be able to deduct some expenses related to volunteering with or fostering for a legitimate cat rescue organization.
A recent court case in California garnered quite a bit of attention for this issue. From the Don’t Mess With Taxes blog:
“Jan Elizabeth Van Dusen claimed $12,068 as a charitable contribution deduction on her 2004 tax return for unreimbursed volunteer expenses she incurred while caring for feral cats.
The Oakland, Calif., attorney volunteered with Fix Our Ferals, an IRS-qualified 501(c)(3) organization. Van Dusen trapped feral cats, had them spayed or neutered, housed them while they recuperated, got the animals vaccinated and other necessary medical treatments and then released them back into the wild. She also provided long-term foster care to cats in her home.
Essentially, according to filings in the tax deduction case, Van Dusen devoted her entire life outside of work to caring for the cats:
Each day she fed, cleaned, and looked after the cats. She laundered the cats’ bedding and sanitized the floors, household surfaces, and cages. Van Dusen even purchased a house “with the idea of fostering in mind.” Her house was so extensively used for cat care that she never had guests over for dinner.
Upon reviewing Van Dusen’s 2004 tax return, the agency determined that she owed $4,383. Most of the due tax was from the IRS’ disallowance of her charitable deduction of cat care expenses.”
Van Dusen took her case to Tax Court, where a judge found that her care of the cats did qualify as a tax-deductible charitable donation. However, he disallowed some of the claimed expenses, such as cremation of a cat, bar association dues and department of motor vehicle fees, saying they were “categorically not related to taking care of foster cats and therefore not deductible.” The judge also found that the woman wasn’t keeping adequate records of the expenses.
IRS Publication 526 states that
You can claim a deduction fo:r a contribution of $250 or more only if you have an acknowledgment of your contribution from the qualified organization or certain payroll deduction records.
If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that lists each contribution and the date of each contribution and shows your total contributions.
This is good news for those who volunteer for a legitimate recue group with 501(c)(3) status designating the group as a charitable organization, which makes it good news for animal rescue.
As with all tax related issues, you should always consult with a qualified tax advisor before claiming any deductions on your tax return.
Click here to watch a Wall Street Journal report titled Cat Lady Beats IRS in Court.
Do you volunteer with a legitimate cat rescue group? If so, do you deduct expenses related to your volunteer activities?