Fostering Expenses as Tax Deductions

We all know the innumerable heart-warming benefits to pet fostering. But, can fostering be beneficial for you, at tax season? It turns out, it can be.

Thanks to Jan Elizabeth Van Dusen’s landmark victory against the commissioner of the IRS, in which she sued for just over $12,000 in unreimbursed supplies required to care for the cats she was fostering in her home, it’s now standard to be able to deduct foster-related expenses from your taxes. Van Dusen’s case legitimized expenses such as food; medicine; vet bills; and supplies such as crates, garbage bags, and anything else that is crucial to caring for a pet. Anything can be considered deductible, if it adds up to more than $250.

Of course, it’s strongly recommended that you talk with a professional about your individual tax situation. Still, there are some standard starting points to consider:

  • Work with an IRS-Approved Charity

The deduction process only works when fostering through IRS-approved charities; this means that they hold a 501(c)(3) designation as a Not-for-Profit organization. When you follow the rules, you can deduct anything, even portions of your utility bills, if a specific area of your home is designated to caring for fosters.

  • Obtain a Good Faith Letter

An important piece of documentation that you need is a Good Faith Letter from the organization that you are fostering with. This letter indicates that you are, indeed a foster, in good standing, with their organization. In fact, if your expenses add up to more than $250, this letter is required.

  • Save Your Receipts

Van Dusen was able to recover much of her $12,000 because she had receipts to prove that her expenses were, indeed, pet related. What she did not recover, she did not have adequate proof for that the purchases were pet-related. Just remember: documentation, documentation, documentation!

The benefits of fostering far outweigh the costs, but it makes good financial sense to recover expenses incurred during the process. Seeing our soldiers reunited with their furry family members when they return from deployments, trainings and separations is worth any monetary expense; still, it’s easy to file the paperwork and easy to recover. Talk to your tax preparer this year!

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