I had an appointment with a client. He’s a quirky fellow: likes to call people by their full names, repeats things several times, kind of a loud talker. But he is very generous, and gives quite a bit of money to numerous charitable organizations. He came into the office, and as per his usual yearly routine I gave him a pad, pen, and a handful of paperclips and he set off to organize his tax documents (told you he was a bit quirky!). Then he presents me with a question about deducting his pet adoption fees from the Broward County Humane Society. He said the person who processed the adoption told him that the fee was a tax deduction because it was a donation, but that is the furthest thing from the truth…
The way it works at this place (and many others like it) is you must pay a fee to adopt a pet, with the cost depending on the type and age of the animal. That’s all well and good, except for one little fact:
You cannot adopt if you do not pay the fee.
What this means, is that the transaction is in no way a donation if it is a requirement to complete the process. You see, it can be a fee or a donation, but not both. If the payment is a prerequisite, then it is a fee and not a tax deduction. On the other hand, if the transaction is free but it is suggested that you make a payment of some sort to help them after-the-fact, then it is a donation, and thereby can be deducted (IF YOU ITEMIZE). Remember, if you do not itemize on your 1040 return, then no donations are deductible.
Side note: This is only the case with ordinary house pet adoptions. If you are a special needs person, or have a dependent who is one, then the costs of those pets, the supplies and care are deductible as medical expenses (again, if you itemize AND the expenses exceed the 7.5% floor for medical expenses, you can deduct the excess). Also, you can deduct the cost to purchase and care for working animals such as guard dogs for your business.
You need to be careful if you do decide to donate to an animal shelter. You should make sure that they are an accredited 501(c)(3) charitable organization abiding by IRS guidelines in order to qualify any donation you give them as tax deductible. It’s important to remember that not all organizations taking money are charitable organizations, and that not every “donation” you make is a tax deductible charitable donation.
What this all means, is that the people who work at many places are knowledgeable about their jobs, not necessarily the tax laws that pertain to the work they do. You cannot take their advice at face value, as it may very well be incorrect. Always consult an accountant or tax professional before you decide to file your tax return just to be sure what you are reporting is accurate and legal if you are unsure to any degree.
One last thing to think about:
You shouldn’t base your decision whether or not to donate to worthwhile organizations based on your ability to take a deduction on your tax return. You should base that decision on what you feel in your heart!