You are an entrepreneur with a sole proprietorship and are thinking about getting a guard dog – or maybe you already have a dog. But can you deduct the dog in your taxes? Good news: in many cases, it is definitely possible!
Guard dog tax-deductibility: what exactly can you deduct?
If you use a guard dog for your sole proprietorship, you can deduct various expenditures from your taxes:
- The purchase cost of the guard dog
- The doghouse
- Food costs
- Veterinary costs
All these guard dog expenses are potentially tax-deductible. Clever, right?
Sole proprietorship & dog: what about homeworkers?
Do you work from home for your sole proprietorship? You can still deduct dog expenses for tax purposes! The percentage you can deduct depends on how much you use your home for your business. For example, if you use your home 20% for business use, then 20% of your guard dog expenses are tax-deductible.
VAT and your guard dog: there is also something to be gained here
For a sole proprietorship, the VAT on guard dog costs can be partially reclaimed. The exact percentage depends on how much you use the dog for business purposes.
Guard dog costs: immediate deduction or depreciation?
- Purchase of guard dog and doghouse: depreciation over several years
- Daily costs (food, vet): immediate tax deduction
- Bonus: an investment deduction of 8% on the purchase!
Note: not every dog is a guard dog!
The tax authorities are not stupid. You must be able to prove that your dog really is a guard dog and that you use him for your sole proprietorship. Claiming your Chihuahua is a guard dog? That will probably not work!
How to prove dog expenses
Good record-keeping is crucial to be able to deduct your guard dog expenses for tax purposes:
- Keep all receipts and invoices
- Keep track of how and when you use the dog in your business
- Make sure your rental contract allows for professional use (if you rent)
By applying these tips, you, as a smart entrepreneur with a sole proprietorship, can take full advantage of a tax-deductible guard dog. Your business will be safer, and you will save on taxes. Talk about getting two for the price of one!