Keeping a pup or kitty around the office isn’t cheap—Hawaiʻi pet parents spend roughly $1,300 to $2,800 a year on food, vet bills, grooming, and toys. Most of that is pure “aloha” and never deductible. But when an animal is truly working, some or all of the cost can move from personal spending to a legitimate tax write‑off for both federal and Hawaiʻi returns.

Below are three situations the IRS (and the State of Hawaiʻi) recognize—plus record‑keeping tips to keep you audit‑proof.

1. Service or Emotional‑Support Animals (Medical Expense Deduction)

• The animal’s primary purpose is medical care—for example, guiding a blind owner, alerting a deaf owner, retrieving items for someone with limited mobility, or supporting a diagnosed mental‑health condition.

• You have a prescription or letter from a licensed Hawaiʻi physician or therapist stating the animal is part of your treatment plan.

• You itemize deductions and clear the 7.5 % of AGI hurdle for medical expenses on Schedule A (Form 1040) and Form N‑11. Hawaiʻi’s instructions list “guide dogs, including the cost of maintaining them” as an allowable expense. 

Costs you may deduct: adoption or purchase fees, specialized training, food, veterinary bills, and even mileage to the vet. Keep every receipt and a simple log of the animal’s working hours.

2. Guard Dogs and Pest‑Control Cats (Business Expense Deduction)

• The animal serves an ordinary and necessary business purpose—guarding inventory, patrolling a warehouse, or keeping pests out of a commercial kitchen.

• The breed and training match the job (think German Shepherd, Rottweiler, or Doberman for security, not a teacup Chihuahua).

• You track “on‑duty” time versus any hours the animal spends being the office mascot.

Document food, vet care, training fees, and related supplies in your bookkeeping software under a separate “Security Animal Expenses” category. If the animal doubles as a family pet, only the business‑use percentage is deductible.

3. Fostering Pets for a 501(c)(3) Charity (Charitable Deduction)

• You foster on behalf of a qualified nonprofit—for example, Hawaiian Humane Society or Aloha Kitty TNR.

• You pay expenses out of pocket with no expectation of reimbursement or profit.

• If annual out‑of‑pocket costs exceed $250, you obtain a contemporaneous acknowledgement letter from the charity.

Deductible items include food, litter, bedding, vet bills, and mileage driven for the charity. Your own time and the “fair rent” value of a spare room are not deductible.

Record‑Keeping Checklist for Hawaiʻi Filers

• Receipts & invoices—scan or photograph; humidity ruins paper.

• Written proof—doctor’s prescription for service/ESA or charity letter for fostering.

• Work logs—notes or photos showing the animal on duty (guarding, pest control, therapy sessions).

• Separate expense category in QuickBooks/Xero so totals are easy to pull at tax time.

• GET awareness—General Excise Tax on local services (like training) is itself deductible but must be recorded.

Common Mistakes to Avoid

• Writing off the family pet just because you “feel safer” working from home.

• Claiming a lap‑dog breed as a guard dog without solid evidence.

• Forgetting that foster expenses aren’t deductible unless tied to a 501(c)(3).

• Skipping the doctor’s letter for an emotional‑support animal—auditors will ask.

Key Takeaways

1. Personal pets = personal expense.

2. Service animals, bona‑fide guard dogs/cats, and charity fosters can be deductible with proper documentation.

3. Hawaiʻi generally follows federal rules, but make sure expenses flow to the correct lines on Form N‑11.

Ready to Keep Both Your Books and Your Best Friend’s Treat Jar Full?

WDS specializes in bookkeeping and tax planning for Hawaiʻi businesses, including those quirky write‑offs island entrepreneurs love—like guard dogs and foster‑pet expenses. Book a free discovery call today and let’s make sure you claim every dollar you’re entitled to while staying 100 % compliant.

The information above is for educational purposes only and does not constitute tax advice. Always consult a qualified tax professional for guidance on your specific situation.