Is Your Pet Insta Famous? Here’s What It Means for Your Taxes

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Does your pooch have more Instagram followers than you do, receive free doggy swag bags and seem to be all-around living his #bestlife?

If your furbaby is making money as an influencer, it could be viewed by the IRS as your own self-employed business if your pet is generating income for you in the dog modeling/acting category on a regular basis. In some cases, pet-related expenses could be considered business expenses and offset against your pet’s earnings.

However, if your pet isn’t actively doing ongoing influencer activities and you are not generating a regular income and profit, the IRS may look at your pet’s overnight stardom as your hobby. If this is the case, you would have to claim the income as hobby income. However, you can not deduct the expenses related to the hobby. Since tax reform, you are no longer able to deduct hobby expenses ( prior to 2018) since miscellaneous itemized deductions were eliminated.

If Your Pup Gets His Paws on Swag

If your dog is lucky enough to receive free doggie treats, trips and/or swag, the value of these gifts is considered income and must be reported on your taxes. Additionally, if your skateboarding kitty is sponsored and paid $600 or more per year to shred, you and your feline friend will most likely be issued a 1099-NEC or 1099-MISC. Each 1099 is different, and it is possible if your pet received payments through a third-party platform (like PayPal) they may receive a 1099-K if they receive more than the threshold at the end of the year. Don’t forget that while you may not receive a 1099 for your kitty if he/she didn’t claw in $600 or more, you will still have to claim the income when you file. 

Picture Puuurfect

If you’re paying for photo shoots, training, chow or grooming sessions for your pet influencer, these expenses are likely tax-deductible if they are directly related to your business income.

Paying Quarterly Estimated Taxes

If you are considered to have a business for your pet star and you think you will owe more than $1,000 at tax time, don’t forget to pay quarterly estimated tax payments by the quarterly deadlines in order to avoid any penalties.

Pawfessional Help

Don’t worry about knowing all these tax laws. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed. 

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