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Tax Deductions for Dog Breeders: Barking Up the Right Tree

By Alison K Plaut

Published on 9 Feb 2024 6 min read

If you’re a dog breeder, either part-time or full-time, you could have opportunities to save more on taxes. Whether you plan to breed a single litter as a hobby or work full-time will also affect your deductions. The chance to work as a dog breeder for a living can be a dream come true, but navigating accounting, taxes, and business expenses can be confusing. 

If you work as a dog breeder, you’re likely self-employed, a freelancer, or own a business. In that case, there are business deductions and allowed expense deductions you may take to reduce your taxable income. Continue reading to learn about tax deductions for dog breeders to help make tax preparation less stressful this year.

Who Can Claim Dog Breeder Tax Deductions?

After starting a dog breeding business, whether you work as a sole proprietor, LLC owner, or in partnership, you can claim business tax deductions relevant to the business. The expenses must be ordinary and necessary for the business to claim them. 

If breeding and selling dogs, cats, or other animals is your primary occupation, you may be able to deduct expenses related to the animals and business, including food, medical bills, and boarding costs. If you breed dogs as a hobby, you can usually only take a business deduction if your expenses exceed 2% of your adjusted gross income. You’ll also need to itemize deductions.

Common Tax Deductions for Dog Breeders

Several deductions are specific to dog breeders, from food to kennel or boarding costs. In addition, you may be eligible for general deductions like insurance or advertising. If you’re preparing business taxes for the first time, understanding tax write-offs for the self-employed or small business owners can help save time and protect your hard-earned revenue. Read on for what you need to know.  

Office or Kennel Space

When you keep dogs or operate a dog breeding business, it can be considered office space, as long as it’s not used for other purposes. The cost of a rented kennel or office space can be deducted. If you own a kennel or dog breeding facility and have a mortgage, the interest payments can also be tax deductible. 

Dog Food

If you keep dogs as part of your breeding operation, you may deduct the cost of dog food for maintaining the dogs as part of the breeding process. 

Medical Expenses

Medical expenses for dogs can also be considered necessary business expenses for dog breeders. Medical checkups or medication necessary to maintain the dogs’ health can be deducted, as well as regular veterinarian fees.

Medical supplies related to breeding, such as gloves and syringes, whelping boxes, puppy mats, thermometers, and sheets, can also be deducted. 

Training

Educational expenses related to dog breeding for yourself or employees, or training expenses for the dogs may also be deductible as necessary business expenses. The education must be directly related to the dog breeding business to qualify as a business deduction.

Conferences

In addition to education or training, attending conferences or networking events with other breeders can be a deductible business expense. You may deduct the conference registration and membership fees, as well as other relevant business expenses. 

Legal and Professional Fees

Professional and legal fees for your normal breeding business operations may be deducted as a business expense. For example, when setting up your dog breeding business, you might need to set up an LLC or pay a registered agent. Other possible legal and professional fees you could deduct include: 

• Accounting services
• Legal services
• Any other necessary software
• Other professional fees

Insurance

Insurance necessary for the business, including worker’s compensation insurance if you have employees, is a deductible business expense. Breeder’s insurance or liability insurance is also deductible. Likewise, if you’re self-employed, your health insurance expenses are deductible. 

To be deductible, the health insurance must: 

• Be for yourself, your spouse, and any dependents 
• Isn’t paid through any kind of pre-tax program
• You were not eligible to participate in a health insurance program by your employer or your spouse’s provider

Health insurance premiums are considered an adjustment to income rather than an itemized deduction. You can deduct the amount you paid for health insurance from your gross income.

Travel Expenses

Travel reimbursements for temporary posts and out-of-pocket travel expenses qualify for tax-free reimbursements. If you must travel for a breeding job, dog show, training, or other travel related to your breeding business, you may be able to deduct travel costs. Possible travel deductions include transportation by plane, car rentals, lodging expenses, and meals. 

If driving to new work locations, you may deduct actual costs or take the IRS standard deduction of 65.5 cents per mile for 2023 and 67 cents per mile in 2024. However, you cannot take this deduction for regular travel to your office or permanent breeding location.

Advertising

Advertising costs are deductible if you market your breeding services or dogs. To take this deduction, you’ll need to keep accurate records of costs with receipts.

Maintenance Expenses

Repairs and maintenance for equipment and vehicles used for your dog breeding business are deductible expenses. Everything from regular maintenance of vehicles and kennels to major repairs can be deducted as a business expense. You can find more creative tax deductions here. 

Expenses That Dog Breeders Cannot Claim as Tax Deductions

While normal business expenses are deductible for dog breeders, the IRS prohibits you from deducting certain expenses. These include:

• Fees from legal violations: You cannot deduct parking tickets, court fees, or other fees related to any legal violation. 
• Regular commuting mileage: The mileage for commuting to work for an office or kennel away from home is not a deductible business expense. 
• Reimbursed expenses: For example, if you are reimbursed for breeding supplies or travel expenses, they’re not deductible as a business expense. 
• Life insurance premiums: If you’re the beneficiary, you cannot deduct life insurance costs.

How to Prepare for Tax Filing and Monitor Tax Deductions for Dog Breeders?

To prepare tax filings and track deductions as a dog breeder, consider planning ahead of time. Here are steps to take to ensure you’re organized at tax time:

• Track everything: Keep receipts and file them carefully for all business expenses. Tracking software or accounting apps can make this easier.
• Create digital files: You can request electronic receipts or scan physical receipts and save them into a single folder or cloud-based drive to save time preparing eligible deductions. 
• Start early: You can save time preparing deductions by setting up clear accounting systems or using accounting software like doola Books.  
• Get help: A certified public accountant or tax professional can help you prepare taxes, double-check accounting records, and help you ensure correct filing. 

How to Claim Write-Offs as a Dog Breeder on Your Tax Return?

As a business owner or self-employed dog breeder, you usually report income and expenses on Form 1099 Schedule C. You can also use Schedule C to claim all business tax deductions or expenses. After subtracting business expenses from income, you will input the difference on Schedule 1 of Form 1040. Tax preparation or accounting software can help you fill out these forms automatically after inputting the relevant income and expenses.

In addition, Section 179 of the IRC allows businesses to take an immediate deduction for business expenses of depreciable assets like computers, equipment, vehicles, and software. You can also learn more about filing self-employment tax.

Protecting Your Dog Breeding Business 

Working as a dog breeder can be an opportunity to share your talents and bring more exceptional dogs to wonderful owners. However, tax preparation can be overwhelming. Preparing and correctly filing taxes with allowed deductions takes time you could use for building your business or relaxing. 

That’s why excellent tax preparation software is so useful to save your valuable time. Consider doola Books to simplify bookkeeping and free up time to focus on your business goals. Or, get doola’s tax package to ensure compliance and online filings for worry-free tax filings.

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