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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12649
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I have been doing fostering and rescuing of dogs and puppies

Customer Question

I have been doing fostering and rescuing of dogs and puppies and was told that I would need a tax I D to be able to file and use some of my expenses, not sure how to do this
JA: The expert will know how to help. Please tell me more, so we can help you best.
Customer: I did Miniature Pincher rescue when I lived in Arizona and never received any type of help money wise or vet wise, it all came out of my pocket and I never charged the new owner for the money that I spent to get all the shots and/or fixed
JA: Is there anything else the expert should be aware of?
Customer: For the last two years, I have been rescuing cats and dogs, and have been paying all the vet bills out of my own money along with all the food and even brought a building to use during bad weather so that they could be outside and not be in rain or snow
Submitted: 2 months ago.
Category: Tax
Expert:  Lane replied 2 months ago.

OK there are two different issues here.

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Simply getting a tax ID won't allow you to deduct the costs as a business expenses. You'll need to be in business for the pursuit of profit.

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Also, you might be able to get help, tax deductible donations from others, grants for various governmental and non-profit organizations IF you file form 1023 to become a non-profit/tax exempt entity (which DOES also require A tax ID).

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The IRS says such outlays are nondeductible personal expenditures, unless the rescuers establish that they incur the expenses to further the efforts of charitable organizations—for instance, foster care for stray animals.

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There's a fairly recent tax court case that MIGHT help, or be applicable here:

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Jan Van Dusen of Oakland, California, used her home to care for over 70 abandoned cats. She shelled out about $12,000 for vet bills, food and other care expenses and deducted those payments as charitable contributions.

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IRS bounced the deductions - disallowed.

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But then she took the dispute to the Tax Court, where she argued her own case. Jan persuaded the court that she rendered services for an IRS-approved charity that specialized in the neutering of wild cats.

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So if you can make that link, you can deduct. The is etting a letter from the charity acknowledging your volunteer work for expenses of $250 or more. The charity has to date it (issue it) prior to the due date for the return in question. If the IRS disputes your deductions, expect them to ask for a letter that authorizes you to keep animals in your home.

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WHAT'S deductible, if you make that link?

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animal feed; medicines; cat litter; litter boxes; pet dishes; cleaning supplies, garbage bags, paper towels, laundry detergent and dish detergent; animal bedding; animal toys such as those that help with behavior modification and well-being; fees paid to veterinarians and behavior trainers; and food for volunteers building temporary shelters for pets evacuated from flood zones in hurricanes

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And travel: to and from animal shelters, veterinarians, committee meetings, fundraising events, etc. If you travel to and from their charitable chores by planes, trains, buses, or taxis you should keep track of their fares and claim them as travel expenses, as well.

Expert:  Lane replied 2 months ago.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

I hope that you’ll rate me based on my accuracy and thoroughness, rather than any good news/bad news content.

That’s the only way JustAnswer.com will compensate me for the work here.

Thanks,

Lane

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice on three continents since 1986.

Customer: replied 2 months ago.
I have been fostering a 13 year old tea cup Chihuahua, and recently had to take him to the vet, out of my own pocket I spent over $500 just for him, not counting all the other dogs that I pay vet bills for their shots, getting them fixed so they will not have any babies, plus I pay for all the food and housing for the dogs
I had rescued and had fixed over 18 cats in the last year, again, all out of my own pocket, and made sure that the cats and dogs are all up to date on shots, and I do not pass that fee on to the new fur ever family.
So the way that I was reading your response is that I can not take and use any of these expenses.
I even bought a large building that I have put air conditioning and heating in, so that in the different weather, the animals can be in a safe place.
Expert:  Lane replied 2 months ago.

I'm so sorry, that's correct - you must either be showing a pursuit of profit, so that the expenses are deductible under IRC §162, OR BECOME a charity, OR, again, get an agreement WITH an established non-profit (under section 501(c)(3), and these - the expenses I mentioned above - will become deductible (subject to the charitable deduction limitations).

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What you are doing is commendable, but the way you're doing it is not deductible. I would seriously consider contacting an animal shelter that HAS the non-profit certification and do what you do as volunteer work FOR that organization - AND most important for the deductions, get letter from the charity acknowledging your volunteer work for the expenses .

Expert:  Lane replied 2 months ago.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

...

I hope that you’ll rate me based on my accuracy and thoroughness, rather than any good news/bad news content.

That’s the only way JustAnswer.com will compensate me for the work here