Pet businesses are growing at a fast rate, due to people's increased willingness to spend more money on animals. You may start a dog-training business to capitalize on this trend. Generally, owning a business or being self employed will result in a larger amount of tax deductions than you would receive by working for someone else, and a dog-training business enjoys deductions similar to many other businesses, as well as some more unusual benefits.
Vehicle Deductions
If you use a vehicle for your dog training business, you can take a deduction for expenses that you incur when using that vehicle for business purposes. Picking up dogs for training or providing in-home services, as well as trips to solicit business, are acceptable business uses. As of the date of publication, you can deduct $0.55 per business mile driven, or you can deduct the business portion of the actual vehicle expenses if it results in a higher deduction. Keep an accurate logbook detailing all business and personal use of your vehicle to validate these deductions.
Business Use of the Home
Performing dog training activities in your home is not only convenient and potentially less expensive than using other space, it may also provide a tax break for your business use of the home. According to IRS rules, you may take a deduction for a percentage of certain home expenses, such as utilities and interest, or rent. You must use part of your home exclusively in your dog training business for this to apply. An office used to perform administrative functions and meet with clients would qualify, as would a training studio. You can deduct a percentage of home expenses that is proportional to the space your dog training business occupies.
Food and Supplies
You may decide to provide meals for the dogs that you are training, or treats to encourage the dogs to perform better for the trainers. These items are deductible on your income tax as supplies. In addition, office supplies that you use for the administration of your business are legitimate deductible business expenses. The price that you pay for obstacle course equipment or for fencing for outside areas to keep the dogs under control can be deducted as well.
Insurance
If you operate your dog training business out of your home, the business portion of your homeowner's insurance is deductible as an expense from the business use of the home, as long as you meet the other tests for home office deductions, including exclusive use of the area. In addition, any business liability insurance is deductible. This can be beneficial because you may want to carry a special liability policy in case a dog that you trained bites or otherwise injures a person. If you purchase health insurance for yourself or your family, that insurance is deductible as an adjustment to your gross income.
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