DAVID WILKENFELD, CPA, CA, canadian tax CONSULTANT

What’s Your Tax Issue: Deduction for Fido?

In Uncategorized on March 8, 2010 at 11:47 pm

The Tax Issue:

I was told that if you have a home office, you can deduct the expenses of your dog under the heading “Security”; is this true? I have two large golden retrievers who loudly announce when anyone enters my driveway or knocks on the door.

The Answer:

Thanks for this question. I love dogs. And this is a chance to show off my own Jackpot. He’s warm, soft, affectionate and sweet. However, as a guard dog, and especially as a tax write-off, he’s pretty much useless.

Jackpot

I don’t mean to dismiss your question. In fact, costs that are normally viewed as “personal” are often the centre of disputes between taxpayers and the CRA. If you want to read a good 50-page dissertation on the topic, the Supreme Court of Canada analyzed this very issue in the Symes decision.

But I’ll save you the time; it essentially boils down to one question: Did you incur doggie expenses for the purpose of gaining or producing income from a business? Put another way, if your dogs were suddenly stifled, would you trade them in for a couple of yapping schnauzers? I certainly hope not!

Strange things have happened. One taxpayer was successful at deducting extra food that he claimed he needed because he was a bicycle courier and required extra energy. On the other hand, suits and other business attire were held to be personal items and not allowed as a write-off.

I suspect that the CRA would view your dog costs as personal items and disallow any attempt at deducting them. But please don’t stop loving them, OK?

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