Author Topic: Have you tried to pay for you pet expenses with HSA?  (Read 58808 times)

Hoosier Daddy

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Have you tried to pay for you pet expenses with HSA?
« on: May 24, 2015, 08:01:45 AM »
Hello fellow Mustachians! Happy Memorial Day weekend to you! I wanted to know if any of you have ever looked into tax-preferential methods of paying for pet expenses:

I made an unmustachian decision to get a dog when I was in college (currently 25 years old, dog is 4 years old) and now I am emotionally attached to the animal after 4 years and am unable to part ways with it. I recently took it to the vet and had to spend approx $200 on medicine due to allergy induced skin rashes with approximately another $100 coming in two weeks for her vaccinations. Apart from these annual expenses she only costs me food and time. However I was looking for ways to make this more affordable. (If it matters, I am debt free and saving approximately 55% of my before tax income a year so these expenses are not breaking the bank, they are just inefficient)

My employer gives me $500 a year in my HSA account and I believe you can use your HSA account to pay vet and food bills for your pet if it is a service animal.

Per 2014 IRS form Publication 502 at: http://www.irs.gov/pub/irs-pdf/p502.pdf

"You can include in medical expenses the costs of buying,
training, and maintaining a guide dog or other service animal
to assist a visually impaired or hearing disabled person,
or a person with other physical disabilities. In general,
this includes any costs, such as food, grooming, and
veterinary care, incurred in maintaining the health and vitality
of the service animal so that it may perform its duties."

I am not disabled and I don't want to do anything outside the limits of the law or anything immoral. I was wondering if anyone had ever looked into this and noticed perhaps there was some law that if you spent x hours a year involved in the community with your pet helping people with disabilities if it would qualify for service dog treatment? This way you could not only do your stoic duty of making your community a better place to live, but you could get preferential tax treatment which would be a win-win. Apart from the cost savings involved of having your pet designated a service dog, I believe you could find more places to live if you're renting versus if it is just a "pet" and you can take it with you on trips etc. without having to pay a pet boarding company to house the animal.

Like I said I do not wish to do anything immoral or against the law, but it seems there are a lot of advantages to having a service animal as opposed to a mere "pet" and was wondering if the mustachian community that often thinks outside the box had ever looked into this.

maricela

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #1 on: May 24, 2015, 08:12:09 AM »
If you are not disabled such to need a service animal, trying to get yours classified as such is illegal and immoral. And not just any dog gets to be a service dog.

Hoosier Daddy

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #2 on: May 24, 2015, 08:17:13 AM »
If you are not disabled such to need a service animal, trying to get yours classified as such is illegal and immoral. And not just any dog gets to be a service dog.

I agree. That's what I tried to point out in my OP. However I do believe in community involvement and if I could do the community a service and as a secondary benefit get preferential tax treatment, then why not? If that is not the case however I completely agree with you and would not pursue it.

maricela

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #3 on: May 24, 2015, 10:08:40 AM »
How would you getting a service dog be a service to the community? A therapy type of dog would not qualify to use your HSA because it has nothing to do with your health.

Lanthiriel

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #4 on: May 24, 2015, 11:26:17 AM »
You're out of luck. I'll admit I've used my HSA account to pay for my dog's Rx hoping it would slide because my name was on the bottle. And I got a tax form at the end of the year making sure I paid taxes on that $99. I happily paid my taxes and didn't try it again.

Also, it kind of annoys me that pets are so looked down upon on this forum. It seems like other spendy hobbies are somehow acceptable, but having a pet is just a total waste of money. My dog is worth every penny for the happiness, energy, and activities he brings to my family. I hope you can evaluate your relationship with your dog in the same light.

Bracken_Joy

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #5 on: May 24, 2015, 11:44:25 AM »
The point of the HSA is *your* medical expenses. If you are disabled, a service dog helps *you* medically. Think a nursing assistant or home health aid, but fuzzier (generally). Just like you wouldn't be able to use your HSA for costs related to being a volunteer health aid, you can't use HSA for having your dog volunteer with the community. It is about *your* medical expenses, not just medically related peripheral expenses.

Hope that made sense/helped clarify the distinction.

Dicey

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #6 on: May 24, 2015, 12:02:03 PM »
Also, it kind of annoys me that pets are so looked down upon on this forum. It seems like other spendy hobbies are somehow acceptable, but having a pet is just a total waste of money. My dog is worth every penny for the happiness, energy, and activities he brings to my family. I hope you can evaluate your relationship with your dog in the same light.
This site is about reaching FIRE as early as possible. Hobbies that don't cost a lot or serve as side hustles are acceptable, but not fancy-pants money sucks. Pets are 100% okay if your hair is not on fire. Once you've achieved financial stability, you can pretty much do what ever you want.  Without doubt, pets are an optional line item. The more you spend on your pets, the longer it takes to reach FI. If you understand what you're trading by owning pets, it's fine, but many people don't.

My sister is on welfare and her whole financial life is a giant train wreck. Yet when someone gave her a puppy for Christmas a few years ago, she accepted it without question as her right. Now she's trying to mooch off her family under the guise of the dog's care needs. I call bullshit. OTOH, we have two dogs and a cat we inherited when a friend died. We have no debt, are FI/FIRE and the cost of pet care isn't even a blip on our radar.

Please note, I have not posted for help getting my financial house in order. Anyone who does so should understand that dozens of people will voluntarily offer suggestions to help alleviate their crisis. Slashing pet expenses is one very obvious example of low-hanging fruit. It's not that we don't love pets, we just understand the cost of them.

To get back on track: To the OP, having an HSA is a great financial tool. If too many people abuse it, it's likely to go away or become more limited in scope. I think the reward you might garner for such a skewed interpretation of the rules is minimal,  unworthy of your time, and potentially unfair to others. However, I do appreciate your willingness to think creatively. That fine skill might be put to better use in other budgetary categories.
« Last Edit: May 24, 2015, 12:09:08 PM by Diane C »

JLee

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #7 on: May 24, 2015, 01:37:57 PM »
From wikipedia:
Quote
A service dog is a type of assistance dog specifically trained to help people who have disabilities. Those disabilities may include visual difficulties, hearing impairments, Post Traumatic Stress Disorder (PTSD), seizures, ambulatory issues, mental illness, diabetes, autism, and more.

There are plenty of sketchy ways to claim an animal is a service dog (you see them on public transportation all the time...somehow I doubt a 3mo old pit bull on a rope leash is a "service dog"), but if you had a service dog, you would already know the answer to your question. :)

PJ

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #8 on: May 24, 2015, 04:45:46 PM »
I think the confusion comes from thinking about getting a dog certified as a "therapy dog," rather than as a service dog.  As others have said, a service dog is trained to meet your specific disability needs, and therefore expenses are covered.  Whereas a therapy dog serves a variety of people by offering a calm non-anxious presence to anyone he/she is helping, but unfortunately, does not qualify for support. 

I agree (confusion over the terms aside) that this is good creative thinking!  Too bad it can't work ...

Hoosier Daddy

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #9 on: May 25, 2015, 06:47:40 AM »
Thanks all. I didn't think this would be possible but thought I'd check. I appreciate your thoughts!

riley2323

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #10 on: February 14, 2017, 02:55:32 PM »
To the OP's question, the HSA is obviously not allowed to be used, but there is another not so obvious way to end up with the same result.  You could claim the dog's medical expenses as part of a charity line in your taxes if the expenses were incurred as a result of you community work.

If you are itemizing and you hosted a bake sale to raise money for your favorite charity, you could claim the flour and sugar as an expense, and you could claim babysitting expenses due to the time it took to deliver the cookies and ensure they were sold properly at the charity event.

Therefore I suspect it would not be that much of a stretch to deduct vet bills in your taxes if they were necessary to conduct your charity or community work, assuming you are claiming them at year-end.  Your dog can't provide therapy if he is not immunized properly etc.

Sort of off topic, and this post is very old, but the end result is medical expenses that can be more or less tax free.

Midwest

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #11 on: February 14, 2017, 03:21:49 PM »
To the OP's question, the HSA is obviously not allowed to be used, but there is another not so obvious way to end up with the same result.  You could claim the dog's medical expenses as part of a charity line in your taxes if the expenses were incurred as a result of you community work.

If you are itemizing and you hosted a bake sale to raise money for your favorite charity, you could claim the flour and sugar as an expense, and you could claim babysitting expenses due to the time it took to deliver the cookies and ensure they were sold properly at the charity event.

Therefore I suspect it would not be that much of a stretch to deduct vet bills in your taxes if they were necessary to conduct your charity or community work, assuming you are claiming them at year-end.  Your dog can't provide therapy if he is not immunized properly etc.

Sort of off topic, and this post is very old, but the end result is medical expenses that can be more or less tax free.

The dog expenses are not a charitable deduction.

DTaggart

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #12 on: February 14, 2017, 03:40:26 PM »
Others have accurately answered your question regarding the HSA, but here's something you might not have considered. I used to have a dog (who has since passed) that I did volunteer work with as a Pet Assisted Therapy animal. We volunteered through the local Humane Society, and they had a deal with one of the local vets who gave volunteers 20% off on almost everything. Since you're already considering pet therapy work (which is highly rewarding in itself, btw), you might ask around the various certification agencies and/or vets in your area to see if there's any possibilities of discounts.

MacGyverIt

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #13 on: February 14, 2017, 04:55:34 PM »
I used to have a dog (who has since passed) that I did volunteer work with as a Pet Assisted Therapy animal. We volunteered through the local Humane Society, and they had a deal with one of the local vets who gave volunteers 20% off on almost everything. Since you're already considering pet therapy work (which is highly rewarding in itself, btw), you might ask around the various certification agencies and/or vets in your area to see if there's any possibilities of discounts.

Please, please, please go this route. I have a service dog and people abusing this privilege have made it increasingly hard for those of us who have a physical need we can't fulfill <i>without our service dog</i> which is the point.

If you can't afford the dog then don't keep it and please don't entertain gaming the system (i.e. the rest of us pay via taxes) because you made this decision.

riley2323

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #14 on: February 14, 2017, 05:02:38 PM »
The dog expenses are not a charitable deduction.

The OP's use of the dog was vague and your statement is too absolute. If the OP decided to donate her time and money to say a veterans group suffering from PTSD, and use the dog legitimately as a therapy dog, she could pro-rate the expenses based on the amount of charity use and personal use of the dog.  If there was a vet bill that was directly linked to just the charity, then she could claim the entire expense as part of charity.

Say a veteran ran over the dogs tail with a wheel-chair, or the VA insisted on immunization X, those could be deductible expenses from what I understand
« Last Edit: February 14, 2017, 05:05:57 PM by riley2323 »

Dave1442397

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #15 on: February 14, 2017, 05:20:01 PM »
I just tried to pay for cough syrup with my HSA card and it didn't let me use it. The cough syrup was for my daughter, not my dog.

Cpa Cat

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #16 on: February 14, 2017, 05:34:00 PM »
If the charity owned the dog and he was fostering it, then its food and upkeep could be a charitable donation. However, if that were the case, you'd want the charity to give you a receipt/letter or in some other way endorse your list of expenses.

The problem with prorating the use of your dog to charity is there's no real mechanism for that. As an example, you can't prorate your car in the same way that you can for business - you only get to deduct the very specific charitable mileage rate or the actual expenses that are directly attributable to your charitable mileage.

The charity didn't receive the food - the dog did, and it's your dog. The charity received your time, which your spent there with an object that you own (the dog). The charity didn't get to keep the dog when you were finished. In the same way that you can't prorate your car, you can't prorate your dog. You could make an argument that specific immunizations/equipment/medical costs incurred as a direct result of the charity work are deductible - but there's no guarantee that even that would be accepted. Certainly, if you were going to try that, you'd want to get the charity's acknowledgement of those costs.

Now, if your dog was a farm animal... then we're talking.

Midwest

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #17 on: February 14, 2017, 06:58:55 PM »
The dog expenses are not a charitable deduction.

The OP's use of the dog was vague and your statement is too absolute. If the OP decided to donate her time and money to say a veterans group suffering from PTSD, and use the dog legitimately as a therapy dog, she could pro-rate the expenses based on the amount of charity use and personal use of the dog.  If there was a vet bill that was directly linked to just the charity, then she could claim the entire expense as part of charity.

Say a veteran ran over the dogs tail with a wheel-chair, or the VA insisted on immunization X, those could be deductible expenses from what I understand

Like cpacat said, you don't get a charitable deduction for a personally owned pet.  That is the hypothetical proposed and it won't fly.   

You provided an example of flour for a bake sale as deductible.  The flour may be deductible, but the pro rated depreciation on your house, the medical bills from your burned hand, and your pro rated cell phone bill for calling the pta leader are not deductible as charitable.

If u have a source that says otherwise please post.

AZDude

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #18 on: February 14, 2017, 08:16:34 PM »
Have to ask why you made this thread? You knew the answer already and were looking for others to validate your morally/ethically wrong approach to save a few dozen dollars per year?

Should probably look in the mirror and have the conversation about the difference between frugal and cheap.

PJ

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #19 on: February 14, 2017, 10:11:38 PM »
Folks, note again that the original thread is from almost 2 years ago.  And that the OP acknowledged that he wouldn't be doing this.

riley2323

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #20 on: February 15, 2017, 07:41:38 AM »
Have to ask why you made this thread? You knew the answer already and were looking for others to validate your morally/ethically wrong approach to save a few dozen dollars per year?

Should probably look in the mirror and have the conversation about the difference between frugal and cheap.

I feel partly to blame....resurrected the 2 year old thread because it was tops on Google, girlfriend has to schedule surgery for her dog and I too wondered if vet expenses were covered or if there was any vehicle for managing pet expenses.  For some pets are part of the family, and if you get a sickly pup or they have a disease or accident, the expenses can creep up close to the human equivalent. 

Also we are in Trumpian times...getting aggressive with tax levers is to be expected after the election season.  Nothing mentioned is morally or ethically wrong.  If you think your dog or cat is part of your family and wondered if HSA could be used or if there was something similar available, what is wrong with that?  And if one was heavily involved with a charity and was spending time and money, and the "therapy" dog was a serious component of the charity, I think you could legitimately make the argument.

Here is a webpage that makes similar arguments:
http://www.dogingtonpost.com/is-my-dog-tax-deductible/

ShoulderThingThatGoesUp

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #21 on: February 15, 2017, 07:53:50 AM »
You don't get to cheat on your taxes because you don't like the outcome of the election.

Pets are a luxury. Luxuries shouldn't be tax deductible (I feel the same way about the mortgage interest deduction.)

Schaefer Light

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Re: Have you tried to pay for you pet expenses with HSA?
« Reply #22 on: February 15, 2017, 10:51:54 AM »
There are some pet medications that are the same as human medications.  Those medications are about the only pet expense where I think you might be able to get away with using an HSA/FSA.