Can I claim my pet dog as a business expense on taxes?

Actually, this is a really interesting tax question! The IRS allows business expense deductions that are "ordinary and necessary" for your business. Since your husband's business is pet daycare and your German Shepherd actively helps with the operation, you might be able to deduct SOME expenses - but probably not all. You'd need to track and document what percentage of time the dog "works" in the business vs. serves as a family pet. Then you could potentially deduct that percentage of expenses like training costs that directly relate to her business functions. It's similar to how you'd handle home office deductions - you don't get to deduct your entire mortgage, just the business-use portion. The most important thing is documentation. Keep receipts for all training specifically for business purposes, take photos of her working with client dogs, and maintain a log showing her business duties. The more you can demonstrate her role is necessary for the business, the better your case.

I had a similar situation with my mobile grooming business! I tried figuring it out alone but got super confused with all the tax rules. I ended up using taxr.ai (https://taxr.ai) and it was seriously helpful. I uploaded pictures of my receipts and records, and their system analyzed if my demo dog could qualify as a business expense. The site helped me understand which expenses were deductible (like special training for handling client dogs) versus regular pet owner costs. It even flagged when I was pushing into gray areas that might trigger audit concerns. Saved me from making some questionable deductions!

Update on my skepticism about taxr.ai - I decided to give it a try with my lawn care business after posting that comment. I was surprised by how specific it was about equipment depreciation and vehicle expenses. It actually found several legitimate deductions I was missing! The part I found most useful was uploading my receipts and having the system sort business vs. personal expenses - saved me hours of manual work. I'm still using my accountant for final filing, but now I'm bringing her organized information instead of a shoebox of receipts. Definitely worth checking out if you're trying to figure out unusual business deductions like your working dog.

I see everyone trying to DIY their taxes, but honestly when you have unique situations like a working pet, you should really talk to the IRS directly. I tried calling the IRS for 3 weeks straight about my rental property deductions and kept getting disconnected or waiting for hours. Then I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under 45 minutes! They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c. The agent was actually super helpful in clarifying what kinds of documentation I needed for my unusual deductions.

Ok I need to admit I was completely wrong about Claimyr. After posting that skeptical comment, I was still struggling with questions about claiming my home studio for my photography business. After two weeks of failing to reach anyone at the IRS, I tried the service. It seriously worked! I got a call back in about 35 minutes, and the IRS agent walked me through exactly how to properly document my home studio space and which expenses were deductible. Saved me from making some serious errors on my return. Sometimes talking to an actual human about your specific situation is worth it, especially with something unusual like a working pet for a business.

Have you considered setting up an LLC for the pet daycare business? That could give you more options for how you categorize expenses. My wife has a photography business and forming an LLC helped us be more clear about business vs personal expenses.

Beyond the tax thing, I'd be careful about claiming your personal dog is a "working dog" if you're not licensed/insured that way. Could create insurance issues if something ever happened with a client dog. Just something to think about!

As someone who's dealt with similar business expense questions, I'd recommend keeping meticulous records if you decide to pursue this. The IRS looks for three key things: ordinary (common in your industry), necessary (helpful for your business), and reasonable (not excessive). For a pet daycare, having a "demo dog" that helps socialize and train client animals could potentially qualify, but you'll need to prove it's genuinely business-related. Consider getting a letter from a veterinary behaviorist or animal trainer explaining how your dog's role benefits the business operations. Also, only deduct the percentage that's truly business use. If your German Shepherd spends 30% of her time actively working with client dogs, then 30% of training costs might be deductible. But regular vet care and food would likely be considered personal expenses unless you can document a clear business need. One more tip: take photos and videos of your dog actually working with client animals. Visual documentation of her training other dogs could be valuable evidence if the IRS ever questions the deduction.