Can I deduct my dog as part of my trucking business?
Dogs are excellent companions, especially when you're on the road more days than you're home. Let's explore if it makes sense to deduct expenses such as food, vet bills, and toys for your dog as a business expense. Many dogs serve as "alarm" systems when they bark at strangers approaching your truck. Is that enough to claim the dog as a "guard dog"? When is it okay?
The IRS hasn't clarified this topic, so we have to start with the publication on business expenses.
In this publication, the IRS states business expenses must be "ordinary and necessary" for the industry. Without clarity, these are the hurdles we must cross if the IRS questions our guard dog expenses:
Ordinary means it is common and accepted in the trucking industry.
Necessary means it is helpful and appropriate.
Having dogs in trucks is very common in the industry, but we need to be able to say it's common for everyone to have guard dogs in their trucks.
While I can't find any websites for dog trainers specializing in guard dogs for truck drivers, this topic is discussed on the radio and has appeared within industry magazines. Alarm systems can be circumvented, or you may forget to turn it on. The IRS may accept guard dogs as ordinary in the trucking industry, but it could also depend on the IRS agent.
Training and type of dog is key to showing your guard dog is both helpful and appropriate.
Guard dogs are trained to respond to your commands. They are typically a breed capable of taking intruders down when the wrong person enters your truck. Have you seen a K9 unit with a yappy chihuahua in their car? Nope.
Showing the IRS training records and that your dog is capable of defending your truck will help claim they are necessary for your business.
How much time is your guard dog on duty, protecting your truck?
Assuming you can show the IRS your guard dog is an ordinary and necessary expense, they aren't always actively guarding your truck. This means we need to allocate their expenses between business and personal use. Multiply the dog's food/vet expenses by the percent of the time your dog is actively guarding your truck.
Hopefully, this article gets your wheels turning. There isn't a clear answer without considering the facts and circumstances for your dog and business. So, what do you think about claiming guard dog expenses after reading this? Review your thoughts with your tax accountant to see what they think about your situation. If your tax accountant doesn't have experience with the trucking industry, let's talk!