Caretaker expenses and taxes

I know that a lot of us who are involved in TNR and ongoing colony caretaking spend a lot of money (and time) doing this work, and I'm wondering if anyone has figured out a way to make it tax deductible without going through all the trouble and expense of organizing your activities as a 501c3 charity. I feel frustrated every year around this time that there doesn't seem to be a good way to do this.

Good question and I hope you David will get good answers, useful also for many of us.

It reminds me of a simliar question I pursued once upon a time here in Sweden, but it may be useful for many other countries too.

We do often use our found shy semiferale rescueers as barn cats, in stables, barns, etc.  Ie working their way as hunters after mices, rats, etc...  I remember even a stable owner who said, her stable cats worked good and hard, much better than some of her human employees!..

OK, so my idea was, to get tax reduction of such cats.   Food costs was probably no big problem.  I got an advice from a farmer, he bough cat food from the same place which sold the food for cows.  It come on the same payment sheet.  His accountant had no objections, and apparently, not the tax administration either.

But I wanted to know if it was possible to get further tax reduktion for spaying, for vet care etc...

I wrote a mail in this end to our  tax authority, but got a flat no.

So I rewrote, telling, I saw the other day,  a rat poison of the brand  Tom cat.   If I use this poison at my farm, I will get tax reduction for the buying cost.  Although such poisons isnt nothing friendly for environment or such.  But if I do use the real thing, very environment friendly  real cat,  I cant get any tax reduction.  Is this fair?   And I wont even mention Im saving lives of homeless cats, giving them work and place in my barn.  Normally seen as a praiseworth deed.

And they phoned to me from the Tax authority, and we had a long talk.  He understood my question better  as put in this second mail.

Apparently they dont want people to demand tax reduktions for their home cats, who are private home pets.   But with working animals its another question.

So he gave me the advice, if I demand a tax reduction for such working cats, I do also send a letter, and thoroughly explaing the situation, they are working cats, and no usual pets.  At home I do have my own residents, who are my pets.

Something like that!

I keep records for any animal I foster (food, litter, beds, litter boxes, medicine, etc.).  Because I work with a shelter that adopts them out, I am able to deduct those specific expenses.  Records are the key.  I write the cat's name on all receipts, especially if I foster more than a couple a year.

I was told that it is actually a donation to the shelter because they do not have to spend their money on those animals.

Sure this isn't what you wanted to hear but here goes...

Ondine's right, records are key, but you should also get a donation receipt from the shelter to prove they received the donation.  (Think about it, what's to keep someone from collecting cat food receipts and saying they gave all that food to their shelter).

And yes the organization has to be a qualified charitable one registered with the IRS.  You can't deduct the value of your time, just the cost of what you donated.

You also have to think about the risk-reward ratio, if it's not a big deduction the chances of the questioning it are slim (to none actually) and, if it is, you're getting back probably $125 of every $500 you donate.  It'll cost you a lot more than $125 to fix if the deduction is disallowed by the IRS.  If you're receipts are in order and you have complied with the rules, then by all means you should take the deduction. 

Filling out the 1023 form (Application for Recognition of Exemption) isn't that bad, but the filing fees can be hefty  and then you will have to file at an annual 990 postcard at a minimum.  I also don't know if arms-length questions would arise if the same people on the board were the only one's deducting contributions to the charity. 

Yet another reason I can see for the open-intake shelters joining forces with the rescue community.  Those informal rescues could benefit from the shelter's tax-exempt status if caring for feral colonies fell under the umbrella of the shelter's services.

Ondine, That's a very interesting idea. I do work with a shelter, but mainly for spay/neuter services. They have accommodated me once with someone who wanted to contribute to what I was doing, but who insisted on donating to an official charity. The shelter accepted the donation and then disbursed it to me.

I also keep receipts. Maybe I could approach the shelter with this idea: Once a year, I could total everything up and make a donation to them in that amount, which they could then return to me based on those receipts. Then I could use that as a tax deduction.

Reba is right on about getting a receipt from the shelter.  I do do that.

I don't think your plan would fly - only because the shelter would technically be paying for your rescue work.  I do the fostering as a volunteer and spend my own money, for which I am not reimbursed.  That's the donation.

The way you describe it, you would not be donating anything and indeed, the shelter would be paying you for your work.  That would definitely not fly as tax deductible.

I would not do anything without talking to your accountant.  I never took deductions until my tax preparer said I could, if  I was spending my own money on the shelter's cats I was fostering and was not  being reimbursed.

Also, I have also done rescuing on my own, without the shelter, and for those expenses, I do not take deductions.

It may be easier to file the 501(c)3 paperwork.  Then you can get donations, too!

Yeah I'll second Odine on that donating to the shelter so they an reimburse you as being viable.  It would have to be some organized formal program where the shelter expanded it's services to include care of feral colonies, then paid for the food and supplies out of it's budget and reimbursed the caretakers for mileage.  That would be cheaper for you and a lot more beneficial than a 25% tax deduction.  It could also be something they solicit donations specifically for, which would then be placed in a dedicated fund for that purpose.  But it requires people on the board at the shelter to get on board and bring it to fruition.  Finding the energy for any new initiative is always the hard part of course.

Expenses and donations under a non profit 501(c) 3 are deductible.

Must have receipts of course.

I save receipts for the cat food I buy for my feral cat route as well.

You can even deduct gas cost if you have record to show you, for instance drove 2 hours round trip to take a load of cats to a spay/neuter clinic too.

Flea meds, vet visits, everything is a deduction as long as it is under a non profit registered org.

Yes, but you're working directly on behalf of the not-for-profit, not because you personally decide it's something you want to do.  The latter is what I think David is asking about, but correct me if I'm wrong. 

Reba said:

 
Yes, but you're working directly on behalf of the not-for-profit, not because you personally decide it's something you want to do.  The latter is what I think David is asking about, but correct me if I'm wrong. 

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Unfortunately the humane society does not pay me for being a member of the board of directors. (sure wish it did!) Same with my cat rescue group, which is also a non profit org.

So it is something I personally choose, same as if someone randomly walks in there and donates $100.00. It's deductible.

It ends up that, deductions are not given back per se, but deducted from your total amt of annual income.

Like claiming 50,000 annual taxable income, donating 100.00 to a non profit will mean your income will be 49,900 instead.

Did I understand what you are asking?

Well, I guess I'm trying to get at the distinction between deciding your going to perform a charitable service versus acting on behalf of the charity.

For example, you volunteer at meals on wheels and give them some cash donations.  You're mileage costs and the cash are clearly deductible.   But say you decide that you are going to deliver lunch to senior citizens in your neighborhood.  I don't care if you can wallpaper your house with the receipts from Shoprite, the cost of that food is not deductible on your tax return.

In your capacity as an officer of the non-profit, even if they don't pay you, you're acting on behalf of the organization.  Ideally, they should be paying directly for any supplies that you use.   Now in the real world people buy things and they logically conclude "what's the difference if I buy do this or make out a check to the organization."  The difference is that you can't prove those pet supplies weren't for your own cat unless they give you a receipt.  So, at the very least, get a receipt on the letterhead saying that you donated these items.

Anyway, it just struck me that these stand-alone people caring for ferals could avail themselves of some program run by the shelter, whereby the shelter purchased all the supplies.  They could still help fund the program by making donations, but then these would clearly be tax deductible, as would the mileage expense for delivering the food to the ferals.  Plus the shelter should be able to purchase everything tax free.   It couldn't be just an informal deal, it'd have to be in the minutes and documented in some manner, but I see no reason why it couldn't be a win-win.

Reba said:

 
Well, I guess I'm trying to get at the distinction between deciding your going to perform a charitable service versus acting on behalf of the charity.

For example, you volunteer at meals on wheels and give them some cash donations.  You're mileage costs and the cash are clearly deductible.   But say you decide that you are going to deliver lunch to senior citizens in your neighborhood.  I don't care if you can wallpaper your house with the receipts from Shoprite, the cost of that food is not deductible on your tax return.

In your capacity as an officer of the non-profit, even if they don't pay you, you're acting on behalf of the organization.  Ideally, they should be paying directly for any supplies that you use.   Now in the real world people buy things and they logically conclude "what's the difference if I buy do this or make out a check to the organization."  The difference is that you can't prove those pet supplies weren't for your own cat unless they give you a receipt.  So, at the very least, get a receipt on the letterhead saying that you donated these items.

Anyway, it just struck me that these stand-alone people caring for ferals could avail themselves of some program run by the shelter, whereby the shelter purchased all the supplies.  They could still help fund the program by making donations, but then these would clearly be tax deductible, as would the mileage expense for delivering the food to the ferals.  Plus the shelter should be able to purchase everything tax free.   It couldn't be just an informal deal, it'd have to be in the minutes and documented in some manner, but I see no reason why it couldn't be a win-win.

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Correct, the food would not be a deduction, UNLESS the person is a registered non profit org. Otherwise people would be able to grocery shop and claim that all of the food they buy went to needy people, then the gov credits them and they are supporting their grocery bill through taxpayers.

My rescue does have it's own acct and pays for supplies, etc. but NOT for my cat route, that is on me, but is deductible because it's under my non profit org's name that I do care for rescue and homeless/ferals.

I agree with your thinking, and it would be a win/win thing! It would have to be included in all, mission statement, by-laws, minutes, etc to fly though.

I guess what I'm talking about here is what the shelter I work with did for me once. I had someone interested in donating $500 to my efforts, but he would only do it if he could make the donation to an official 501c3 charity. So, he made the donation to the shelter, and they wrote me a check for the same amount since apparently a 501c3 can designate various projects as falling under its umbrella. Because I had had a large number of cats spayed/neutered at the shelter and had plenty of other verification of my activities, they felt comfortable doing this.

In my case, I figure that I'm spending around $2,500 per year in terms of food and gas. In addition to receipts, my caretaking is well-documented since there are people living where I feed the cats who see me doing it all the time.

So, if I could document those expenses as doing work on behalf of the 501c3, could they then certify those expenses as a donation to their mission under their 501c3? They are explicit on the fact that keeping cats out of their space in the shelter by caring for them elsewhere falls under their mission. Based on what I know about their monthly costs per cat, my cost in maintaining the colony is about one quarter of what it would cost to have those cats in their facility.

The alternative would be for me to make a donation to the 501c3 shelter and then have them disburse the money to me to purchase the food and gas, although that becomes more paperwork for the 501c3.

Exactly, and the shelter felt comfortable for all the reasons you listed.  But there's a third party there making the donation which makes it more arms length.  I just don't know (and I mean honestly don't know) if it would fly if people were walking in making donations and then the charity was writing them out checks for the same amount to reimburse them for supplies. 

Here are a couple of sites that address this question. Reportedly, a legal decision in 2011 helped clear the way for this.

http://animalrights.about.com/od/co...tering-And-Rescue-Expenses-Tax-Deductible.htm

http://budgeting.thenest.com/tax-writeoffs-rescuing-dogs-22622.html

That's what we needed, a few tax cases!  Great research.

What I was afraid of was the IRS' position that (thankfully) the judge disagreed with.  But keep in mind that this woman had to go to court to prevail.  Better to do get the ducks in a row so it doesn't come to that.

PS  This guy:

http://budgeting.thenest.com/tax-writeoffs-rescuing-dogs-22622.html

Didn't read the case carefully and his article reflects it.  The first article is much more comprehensive.

Notice that the woman fostered for a 501(c)3:  "Van Dusen had claimed a $12,068 deduction on her 2004 tax return for the expenses she incurred while fostering over 70 cats for the 501(c)(3) group Fix Our Ferals."

And the court actually disallowed many of her expenses because she didn't have the proper receipts and donation forms from Fix Our Ferals. 

I also think she prevailed because the organization, while decentralized, did exist as an entity separate and apart from herself and her home:

Fix Our Ferals is a decentralized organization. It has no

formal administrative office. Instead, it uses a post office box,

a telephone hotline, a website, and other internet- and

phone-based methods of communication.

Fix Our Ferals’ official staff, as far as we can surmise, con-

sists of a board of directors and a team of veterinarians. The

organization relies on a base of volunteers who trap cats,

transport cats, foster cats, staff spay/neuter clinics, educate

the public, screen phone calls, raise funds, and recruit volun-

teers. Some Fix Our Ferals volunteers are members of an

informal internet message group through which they coordi-

nate logistics and assist each other with cat-related issues

I wonder if an organization such as that would be feasible on a national, or even international level. Anyone could join and then claim their feral cat expenses as tax deductible. I suppose not, because the IRS would find it too difficult to verify claims.

I think it would with  enough start-up funding and the right structure - like any large, national charity.  Too bad the Gates Foundation isn't up for animal causes.   It takes so much social capital to stat anything new, that's why I think piggy-backing off the established shelters/rescues would work best.

Have you checked to see if there is a feral on-profit in your area that you could join with? There are some, I know of one in El Cajon.

Also, here's another link about volunteer expenses and non-profits:

 http://www.alleycat.org/page.aspx?pid=1037