16 Dec Can I deduct my dog?

Q. I’m blind and I have a seeing-eye dog named Ray Charles (ha, ha). I also work out of the house as an independent contractor, consulting about disabilities. Ray comes with me everywhere. Can I deduct what I pay to feed him, vet bills and the rest?
— Searching for savings

A. Your pooch will probably get you some deductions.

Ray Charles’ expenses are deductible as a medical expense because you are using your guide dog as a visually-impaired person, said Gail Rosen, a Martinsville-based certified public accountant.

This includes costs such as food, grooming and veterinary care incurred to maintain the animal’s health and vitality so that it may perform its duties, Rosen said.

“The total amount of medical expenses you can deduct on Schedule A, Form 1040 is the amount by which your unreimbursed payments for all medical expenses exceed 10 percent of your adjusted gross income for the year,” Rosen said. “If you are over age 65 or your spouse is over 65 before year end, the floor is reduced from 10 percent to 7.5 percent for 2015.”

Rosen said the limit is lower for New Jersey purposes. Deductible medical expenses have to exceed 2 percent of your gross income for state tax purposes.

The more difficult question is whether your dog can be claimed as a business expense.

“The IRS allows all ordinary and necessary business expenses,” said Joseph Matheson, a certified public accountant with Matheson & Associates in Whippany. “Under that premise, I believe you would be able to claim at least a portion if in fact they are related to doing your job.”

Most importantly, Matheson said, it must be a legitimate expense. Dog expenses claimed on a tax return are likely to be examined, so you’ll want good documentation.

“In order to be considered as disabled to claim an impairment-related work expense, you must have a physical or mental disability that functionally limits your being employed, or a physical or mental impairment that substantially limits one or more of your major life activities such as performing manual tasks, walking, speaking, breathing, learning, or working,” Matheson said. “The service your dog provides must be necessary for you to do your work in a satisfactory manner.”

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This story was first posted in December 2015.