Can a mental health therapist deduct the cost of adopting a dog and training it for use in private practice?

by Eric S. MacCollum, CPA | Dec 05, 2018

Can a mental health therapist deduct the cost of adopting a dog and training it to be a therapy dog for use in private practice? Is this a case when a partial deduction might make sense, or none at all? 

For any business to deduct any business expense, the expense must be both ordinary in the course of the particular business claiming it and necessary. In this case, if the therapist can substantiate a business need for the therapy dog, which he or she should be able to do, all business costs associated with the therapy dog will be a deductible business expense to the practice. While that may sound like a simple task, therapy animals can have more than one use, and only those expenses necessary for and directly related to using the animal in the therapist's professional practice may be deducted. For example, if the dog is crated at the office when not in service, then this crate may qualify as a deductible business expense. However, if the same crate is used at the therapist's home, then the item is not a valid business expense.  

Animal therapy has long been receiving favorable tax treatment, whether on the side of the end user deducting the cost as an individual medical expense itemized deduction or on the medical professional side as an allowed business deduction. However, due to the possible dual use of the animals and varying types of expenditures, it is highly recommended that you work with a professional with experience in this area. The PICPA has a handy CPA Locator on its website to help you find a professional in your area.

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Answered by: Eric S. MacCollum, CPA, is a principal with Hudak and Company in Lemoyne, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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