The answer depends on your relationship to your companion animal. If you share the responsibilities to provide for their physical and mental needs and the dog’s owner pays all of the costs for that, the service is considered a taxable service in New York. However, if there is only a minimal share of responsibilities, the service can be considered a nontaxable service if you provide the services at an annual fee (generally, $100 per month, with a maximum of $300 for pets) and only the fees required by law (such as a rabies and annual license or annual registration). A less minimal share of obligations, such as some free veterinary visits and routine vet care, is considered the service of a professional.
This means you can deduct all of the service costs you incur, such as pet insurance, but not the value of the services themselves. The more reasonable the hours you spend with your companion animal, the greater your deductibility amount. If you provide medical, dental or other necessary care the veterinarian or veterinary tech doesn’t, for example, but the pet’s health care costs are greater than their vet fees, the vet will be your deduction partner, and the value of your services may be included. The service of a pet sitter might also be deductible in your business (unless, like those that have used the service of a pet sitter to sell their services previously, you sell the service to a third party).
See Tax on Service Work.
Is a pet sitting service in New York limited?
If you operate a business that allows you to earn income and is located in New York, you might be able to deduct the service you provide as your taxable business income. For example, for small businesses, if you offer services such as cleaning, dog training, pet sitting; you could exclude that amount from your taxable income, but not the amount from the business that you are renting and could not deduct any additional rent. (See also Tax on Renting.)
If you run a business that has no income and your business operates as a business, you would need to work with an accountant or tax professional to determine the tax consequences of the work. A person providing your services would not be considered a personal service provider.
Other than as a deductible service, the tax rules on service-of-a-professional and service-of-a-professional-companion-animal apply generally as described.
What is included in my gross income?
The basic tax rules
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