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If you're involved in the rewarding and ever-growing dog grooming or pet sitting industry, you may be wondering about the financial aspects of your business. One common question that arises is whether you can deduct expenses related to your canine care enterprise.
Navigating the intricacies of tax deductions for a business centered around furry friends requires understanding tax laws and regulations. In this exploration, we'll cover which expenses incurred in your dog grooming or pet sitting business can be claimed as deductions and how to go about deducting them.
When running a business, expenses can add up quickly. The good news is that the IRS allows you to deduct business expenses as long as they are ordinary and necessary for your business.
An ordinary expense is an expense that is typically incurred in that type of work. A dog brush is an ordinary expense for a groomer, but a Netflix subscription certainly isn’t. A necessary expense is something that you need to do your work, like a pair of scissors or clippers to cut pet hair.
Usually, pet owners prefer to bring their own supplies when you pet sit for them. Sparky might need prescription food or special chewy treats. But, you might choose to keep your personal stock of treats, chew toys, pet food and other necessities to ensure a seamless experience.
These items represent costs you're incurring as part of your income-earning activities, making them eligible as deductible expenses for tax purposes.
As a pet groomer, you’re expected to have your own supplies. Most pet grooming supplies are tax deductible. These items include expenses like:
A vehicle is probably an important part of your business. Whether you have a pet grooming business on wheels or need to travel to meet potential customers, you can write off the miles you drive for business.
The IRS set the mileage rate for 2023 at 65.5 cents per mile. If you drive 100 miles during the tax year, you’ll multiply 100 (miles) x 65.5 = $65.50. So, you can deduct $65.50 from your taxable income.
The catch is that the miles need to be exclusively for business. You can’t count any commuting miles, and if you make a stop along the way, say for a quick sandwich, you can’t write off the miles to and from the sandwich shop since they aren’t business miles.
If you have a pet grooming business on wheels or drive to meet clients, you can write off vehicle-related expenses when itemizing your deductions.
Make sure you keep track of your invoices and receipts. You'll need them when it's time to add your expenses to Schedule C. With FlyFin, you won't need to save a single receipt. All your expenses are in one place, and A.I. can automatically scan them to find every possible deduction.
A home office is typically necessary when you work from home. Whether you share the office with your canine friends or have your own sanctuary, you can deduct the portion of your home that’s used for a home office.
You’ll multiply the square footage of your home office by $5, the rate set by the IRS. This simplified method is capped at 300 square feet, so if your home office is bigger than this, you’ll need to use the more complicated home office method.
It’s important to keep up with the current information and trends. This might mean extra training or educational courses. You can write off the costs of these courses if they are related to your current profession. You can take a pet first aid course, for example, since you might need it as a dog sitter. But you can’t take a course on cryptocurrency and write it off since it’s completely unrelated to dog sitting.
If you need to pay membership or certification fees, you can write off those costs, too, as long as they are part of your profession.
When it comes to managing your pet grooming or pet sitting business expenses, FlyFin has you covered. With expense tracking and A.I. finding every possible deduction, you can save the most on taxes. CPAs review and file your tax return, and you're covered with full audit insurance.
FlyFin CPA Team
With a combined 150 years of experience, FlyFin's CPA tax team includes tax CPAs, IRS Enrolled Agents and other tax professionals, offering users the most comprehensive tax advice and preparation.