I love dogs, but there is a time and place for them, and maybe it's not a good idea to (a) deduct dog expenses for your business or (b) allow your dogs in your home office. Case in point: 
A 2009 Tax Court case illustrated why home based businesses are a problem for the IRS. Among other tax problems noted by the Court, there were two issues with the owners' dogs:
- They deducted care for their dogs as business travel expenses and
- They confined one of their dogs in their home office because it shed and they preferred that the dog not be in the house. They also allowed their two other dogs to sleep in the office space.
Let's take each of these issues separately.
Is Dog Care a Legitimate Business Travel Expense?
The IRS says that travel expenses must be "ordinary and necessary" business travel expenses. While the owners might think dog care is necessary, it certainly isn't an ordinary business expense. Travel expenses like laundry, phone expenses, tips, and computer rental fees are deductible, but not the expense of putting your dogs in a kennel. The Tax Court denied this deduction, citing it as a personal expense.
Why Can't My Dog Sleep in My Home Office?
A home office must be used "regularly and exclusively" for business purposes. Notice the word "exclusively." That means, the office can be used only for business. The Tax Court disallowed the home office deduction for other reasons, but noted that the petitioners "made personal use of the ... [home office] space." If it were me (and I'm not a tax attorney or IRS agent, remember), I would argue that I could take my dog to my business office so that having a dog with me in my home office is the same. But I couldn't argue about having the dogs sleeping in the office at night.
I always suggest that you err on the side of caution and make sure there is no question about your home office being used "regularly and exclusively" for business purposes.
What do you think?
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I cannot believe this. Dog can stay and sleep in the working office. The office is working environment for professionals.