If you volunteer with a bird club or other nonprofit organization, you may qualify for a tax deduction.
If pet birds were children, most of us would have enough tax deductions to guarantee a refund every year. Of course, the Internal Revenue Service (IRS) is highly unlikely to confer deductible status on household pets in the foreseeable future, but there are some tax breaks available to pet bird owners.
Pet Bird-Related Business Breaks
If pet birds are your livelihood, their necessities may be tax deductible. Owners of performing birds, bird breeders, pet shop proprietors and other bird-related businesses may deduct expenses involved in operating their businesses, including, but not limited to: food, housing, veterinary care and equipment. If a portion of your property is devoted to aviaries for breeding birds, you may qualify for agricultural zoning, which may lower your property taxes.
If you have a room or space in your home specially designated for business activity, you may qualify for a home office deduction. Because many bird-related businesses are part-time enterprises, you must be able to prove that you actively pursued the business as an income-producing entity. Consult your tax advisor for specific advice.
Pet bird lovers have many opportunities for tax-deductible giving. Tax-exempt sanctuaries and shelters, rescue organizations, bird clubs, avian medical research projects, conservation groups and other charitable entities that work for the good of parrots and pet birds are likely candidates for your donation dollar.
According to the IRS, individuals giving to 501(c)(3) public charities may deduct donations consisting of up to 50 percent of their adjusted gross annual income. Corporations may deduct contributions to 501(c)(3) organizations up to 10 percent of their taxable income. Tax deductions are not allowed for donations to organizations that do not have 501(c)(3), tax-exempt status, so check carefully before you give.
What if you get something in return for your donation? Is it still deductible? Suppose you attend a bird club fundraiser, pay $200 a plate for dinner and dancing when the actual value of the event is $100. Subtract the value of the event from the cost to get your deductible amount, which, in this case, would be $100. Consult your tax advisor for specific information.
“Donating a used cage to a club’s rescue committee may be tax deductible,” according to New York accountant, Bob Dietrich. “The fair market value of the cage at the time you donate it is deductible. The fair market value depends on the condition of the cage. The IRS requires that donated ‘household goods’ be in good condition in order to be deductible. It’s not worth what you paid for it unless it’s never been used. If it comes into question, the IRS will depreciate it over the number of years you owned it and will estimate its value.”
Join The (Bird) Club
Most of us join pet bird clubs for camaraderie with other parrot or bird lovers and to learn more about our pet birds. It is only after we get involved in the workings of an organization that we realize how much labor is required. If your bird club is a non-profit, 501(c)(3) organization and you itemize deductions on your tax return, you can deduct some of the expenses you incur as a result of volunteering your services.
Volunteers can often take advantage of the mileage deduction. “You can deduct mileage driven for a charity, taking the standard deduction of 14 cents a mile or you can deduct actual expenses,” said Dietrich. “Make sure to keep careful records. Keep track of mileage, date and time of events and your duties in conjunction with the event in order to substantiate the deduction. Save toll and gasoline receipts.” Examples of charitable bird club event include outreach events, educational programs and nursing home and pet therapy sessions.
If you purchase equipment to help you perform your volunteer duties for the club, the cost isn’t deductible if you keep the item. However, costs for upkeep of the equipment are tax deductible to the extent that you use it for charity. For instance, if you purchase a computer and 50 percent of its use is for club business, then 50 percent of the repair services would be tax deductible.
For answers to questions and to look up information on a specific charity visit the IRS website. Research non-profit organizations at Guide Star.
No extra money, but want to support avian charities? Visit iGive and learn how you can donate to your favorite cause with no out-of-pocket expense.
Tax Deduction To-Do List
- In order to get tax deductions for charitable giving, you must itemize deductions on your tax return.
- Ask for 501(c)(3) documentation from charities, especially if you are planning a substantial gift. If the charity is not tax exempt, your deduction will be disallowed.
- Keep donation receipts. According to the IRS, you must have a receipt from the beneficiary for monetary donations of $250 or more. Retain cancelled checks, receipts and bank records documenting smaller gifts as well.
- You cannot take a deduction for “work” or “services” performed for a charity.
- Do you love to give parties? Host a fundraiser for your club or a favorite qualifying 501(c)(3) avian cause and deduct your non-reimbursed expenses.