Tax Filing Questions for My Cattery Business - Conflicting Advice from Professionals

Hey all, I'm in desperate need of tax advice for my cattery business. I've talked to several tax preparers and done my own research, but I keep getting contradicting information. My cattery is officially registered as an LLC (sole proprietorship, no employees). It's already profitable and I've been running it like a proper business - keeping detailed expense records, tracking all income, categorizing everything, and maintaining a separate business bank account with Capital One. I've also been working to cut costs where possible to increase profitability this year. My main questions: 1. Is all the income considered self-employment pay? 2. When filling out government forms asking about my income, do I report the full amount the cattery earned as my personal income? One H&R Block preparer told me the cattery's gross income would be my gross income, and the amount after expenses is my net. Is this right? 3. Are cats considered livestock for tax purposes? I've heard both yes and no. I've also heard farm animals require a different form, while dog/cat businesses use Schedule C? 4. If cats are livestock, can I choose between listing my breeding cats as depreciating assets or inventory? I think I read somewhere that with one of these approaches, you can't claim food expenses anymore? And something about the inventory method being better for taxes due to capital gains rates? I believe the farm-price inventory method would be simplest, but I'm confused about how to value my cats... Sorry for all the questions, but every "professional" seems to give me different answers! I just want to file correctly.

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18 comments

Heather Tyson

•8M

Hi there! I've been a tax preparer for 15 years and have worked with many small animal breeding businesses. Let me try to clear up some of your confusion: 1. Yes, the income from your cattery is considered self-employment income since you're operating as a sole proprietor LLC. This means you'll need to pay both income tax and self-employment tax on your profits. 2. When reporting income, you'll record the cattery's gross income (all money received) on your Schedule C. Your personal income from the business is the net profit (after expenses), which flows to your personal tax return. The H&R Block person was correct about this. 3. Cats are not considered livestock for tax purposes. The IRS categorizes them differently than traditional farm animals. You'll file using Schedule C (Profit or Loss from Business), not the specialized farm schedules. 4. Since cats aren't livestock, you don't have the same depreciation vs. inventory options that apply to farm animals. Your breeding cats would generally be considered capital assets of your business. You can deduct their food, veterinary care, and other maintenance costs as business expenses on Schedule C. Hope this helps clear things up! Let me know if you have any other questions.

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Heather Tyson

•8M

You're correct - you'll only be taxed on the net profit from your cattery business, not the gross income. The profit (after deducting all legitimate business expenses) will flow to your personal tax return where it will be subject to both income tax and self-employment tax. For purchasing new breeding cats, since they're considered capital assets with a useful life of more than one year, you generally need to depreciate them over time rather than deducting the full purchase price immediately. You would typically depreciate them over a 7-year period using the Modified Accelerated Cost Recovery System (MACRS). However, depending on your total business purchases for the year, you might be able to use Section 179 expensing or bonus depreciation to deduct more of the cost in the first year. I'd recommend keeping detailed records of purchase dates, costs, and the intended use of each cat in your breeding program.

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Raul Neal

•8M

I had similar tax confusion with my parrot breeding business last year. After lots of research and frustration, I found this amazing AI tool called taxr.ai that made everything so much clearer! https://taxr.ai actually specializes in helping small business owners figure out their specific tax situations. I uploaded all my business records and some of the conflicting advice I'd received, and it analyzed everything and gave me clear, specific guidance for my exact situation. It even helped me identify additional deductions I hadn't considered - like a portion of my home utilities since I use a dedicated room for my birds. The tool actually explained why cats aren't considered livestock but are capital assets instead, and how to properly handle depreciation vs. expenses. Honestly, it saved me so much time and stress compared to the endless googling and confusing advice I was getting before.

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Raul Neal

•8M

The information was surprisingly accurate! I actually did have my accountant review the suggestions, and she was impressed by how thorough and correct the guidance was. She only made minor adjustments to fit my specific situation. The AI is trained on the actual tax code and IRS publications, so it's citing real rules, not just making guesses. Yes, it absolutely handles specialized businesses like breeding! That's what impressed me most. It has specific knowledge about animal breeding operations and understands the different tax treatments. It asked me specific questions about my breeding program, the animals' purposes (breeding vs. selling), and then applied the right tax rules. It's not just using generic small business templates - it understood the specific considerations for animal breeding businesses.

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Christian Burns

•8M

I just wanted to follow up about my experience with taxr.ai since I was skeptical at first. After seeing the recommendation here, I decided to give it a try with my small rabbit breeding business. I was blown away by how helpful it was! The tool immediately recognized the specific tax issues related to animal breeding and asked really detailed questions about my operation. It clarified that my rabbits should be treated as capital assets, not livestock, and explained exactly how to depreciate my breeding stock versus expensing the costs of rabbits bred for sale. It also identified several deductions I had been missing - especially around home office expenses and vehicle use for business purposes. The explanations were clear and referenced the specific IRS rules that applied to my situation. I'm definitely going to save money on my taxes this year, and I feel much more confident that I'm filing correctly!

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Sasha Reese

•8M

If you're still struggling with conflicting info, you might want to talk directly with the IRS. I know that sounds awful - I used to spend HOURS on hold trying to get through to someone who could answer my business questions. Then I found Claimyr (https://claimyr.com). It's this service that gets you through to an actual IRS agent without the ridiculous wait times. I was super skeptical at first, but you can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c I used it when I had similar questions about my dog breeding business. Was able to speak directly with an IRS agent who specialized in small business taxation and got clear answers about how to handle my breeding dogs for tax purposes. The agent confirmed they should be treated as capital assets on Schedule C and helped me understand the proper depreciation schedule. Saved me tons of stress and potentially an audit!

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Sasha Reese

•8M

They use an automated system that does the waiting for you. Basically, it dials and navigates through all the IRS prompts, waits on hold, and then calls you when an actual human IRS agent is on the line. You don't have to stay on the phone during the wait time - you just pick up when they've got an agent ready to talk to you. It's completely legitimate and works with the existing IRS phone system. I completely understand the skepticism - I felt exactly the same way! But yes, I did get clear answers about my breeding business. The key is knowing which department to ask for. I specifically asked to speak with someone familiar with Schedule C businesses and animal breeding. The agent I talked to confirmed that breeding animals should be treated as capital assets, explained the correct depreciation schedules, and clarified which expenses could be deducted immediately versus capitalized. They even emailed me some specific IRS publications that addressed my situation.

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Paloma Clark

•8M

Just wanted to update everyone who responded to my post. I was super skeptical about Claimyr, but after waiting on hold with the IRS for 2+ hours myself and getting nowhere, I decided to give it a try. I'm shocked to say it actually worked perfectly! The service called me back after about 45 minutes and connected me directly to an IRS representative who specialized in small businesses. I explained my cattery situation, and she gave me crystal clear guidance. She confirmed everything that the first commenter said - cats are NOT considered livestock for tax purposes, I need to use Schedule C, and my breeding cats should be treated as capital assets that are depreciated over several years. She also walked me through exactly how to calculate the depreciation and which forms I needed. This saved me so much confusion and potentially filing incorrectly. Totally worth it just for the peace of mind!

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Noland Curtis

•8M

One thing no one has mentioned yet - make sure you're tracking all possible deductions for your cattery! I run a small cat breeding business and was surprised at all the things I could deduct: - Cat food, litter, toys - Vet bills and medications - Portion of home utilities if you have dedicated space for the cats - Mileage for vet visits, going to cat shows, picking up supplies - Website hosting and advertising costs - Show entry fees - Specialized equipment (cat trees, breeding pens, etc) - Continuing education (books, courses on breeding) The first year I worked with a tax professional, we found I'd been missing about 30% of legitimate deductions. Made a huge difference in my tax bill!

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Noland Curtis

•8M

I started with spreadsheets too, but as my business grew I switched to QuickBooks Self-Employed. It connects to your business bank account and automatically categorizes most transactions. The best feature is the mileage tracking - the app uses your phone's GPS to automatically track business drives. There are cheaper options like Wave (free) or FreshBooks that work well too. The key is finding something that makes it easy to capture receipts on the go - I take pictures of receipts immediately in the app so I don't lose track of cash purchases. Whatever system you choose, just make sure it lets you easily generate profit/loss statements and tax reports when it's filing time!

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Diez Ellis

•8M

One important thing to mention - make sure you're handling sales tax correctly for your cattery! This is separate from income tax but equally important. Most states consider selling cats to be taxable (unlike livestock which often has agricultural exemptions). You need to collect and remit sales tax on each kitten sale unless your buyer has a resale certificate or other valid exemption. I learned this the hard way when my state audited my dog breeding business and I ended up owing back sales tax plus penalties. Now I register for sales tax permits in any state where I have sales and make sure to collect and remit the taxes properly.

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