Ask an AI Accountant

While your dogs are certainly valuable in guarding your junkyard, the IRS typically doesn't allow pet expenses to be deducted as a business expense. The IRS generally views pet costs as personal expenses. However, there are some exceptions, such as for guard dogs or service animals.

In your case, if you can clearly demonstrate that your dogs are primarily for business security purposes and not just pets, you might be able to deduct some costs. You'd need to keep detailed records showing how the dogs are used for business, including training specific to their guard duties.

Remember, even if you can prove they're guard dogs, you can only deduct the portion of their expenses that relate to their work. So, if they're also your personal pets and spend a significant amount of time not guarding your business, you'd need to prorate their expenses.

This is a bit of a gray area in tax law, so it's important to keep thorough records and be prepared to justify the deductions if questioned.