Do I Have to Pay Taxes on Dog Sitting?

Engaging in dog sitting can be a rewarding way to earn income, whether as a casual activity or a more structured endeavor. Money earned from providing services is generally considered taxable income by federal tax authorities. This applies to all payments received, regardless of how they are paid, whether through cash, checks, or digital payment platforms.

Determining Taxable Income

Income from dog sitting is typically classified as self-employment income, not hobby income, due to its profit motive. This means your gross earnings are subject to federal income tax and self-employment taxes. Self-employment tax covers contributions to Social Security and Medicare, which are typically withheld from an employee’s wages. For self-employed individuals, this responsibility falls directly on them.

The self-employment tax rate is 15.3%, comprising a 12.4% portion for Social Security and a 2.9% portion for Medicare. For 2025, the Social Security portion applies to net earnings up to $176,100, while the Medicare portion applies to all net earnings. If your net earnings exceed certain thresholds ($200,000 for single filers or $250,000 for those married filing jointly), an additional 0.9% Medicare tax may also apply. When calculating self-employment tax, you apply the 15.3% rate to 92.35% of your net earnings from self-employment. This adjustment accounts for the employer-equivalent portion of these taxes.

Identifying Deductible Expenses

To reduce your taxable income, dog sitters can deduct ordinary and necessary business expenses. An expense is considered ordinary if it is common and accepted in the dog sitting industry, and necessary if it is helpful and appropriate for your business. These deductions help lower your net earnings, thereby reducing your overall tax liability. The IRS provides guidance on these types of expenses.

Common deductible expenses include supplies such as leashes, waste bags, dog treats, and cleaning products used specifically for your dog sitting business. Marketing costs, like business cards, website fees, or online advertising, are also deductible. If you use your personal vehicle for business travel, such as driving to clients’ homes or veterinary appointments, you can deduct the mileage. For 2025, the standard mileage rate for business use is 70 cents per mile.

Other potential deductions include business insurance premiums, which protect you against liabilities related to your services. Professional development, such as pet care courses or certifications, can also be deductible as they enhance your skills and directly benefit your business. If you use a portion of your home exclusively and regularly as your principal place of business or to meet clients, you may qualify for the home office deduction. You can calculate this deduction using either actual expenses (a percentage of your rent, utilities, and insurance) or a simplified method of $5 per square foot, up to 300 square feet, for a maximum deduction of $1,500.

Reporting Your Earnings

Once you have determined your gross income and identified all eligible deductible expenses, you will report your net self-employment income to the IRS. This process primarily involves using Schedule C, Profit or Loss from Business, which is filed with your personal income tax return, Form 1040. Schedule C is where you will detail all your dog sitting income and list your various business expenses.

The net profit or loss calculated on Schedule C then flows to your Form 1040, specifically to Schedule 1, which reports additional income and adjustments to income. This net income is also used to calculate your self-employment tax on Schedule SE, Self-Employment Tax. The amount of self-employment tax you owe is then reported back on your Form 1040.

Managing Estimated Tax Payments and Records

As a self-employed individual, taxes are not automatically withheld from your dog sitting income, so you are responsible for paying estimated taxes throughout the year. This “pay-as-you-go” system helps you meet tax obligations as income is earned and avoid underpayment penalties. Estimated tax payments are typically made quarterly.

For income earned in 2025, the estimated tax due dates are April 15, June 16, September 15, and January 15, 2026. If any of these dates fall on a weekend or holiday, the deadline shifts to the next business day. You can make these payments using Form 1040-ES or through various online payment options provided by the IRS.

Maintaining accurate records for both your income and expenses is important. Good record-keeping supports the accuracy of your tax return and provides documentation in case of an IRS inquiry. You should keep detailed records of all payments received from clients, noting the date, client name, and amount.

For expenses, retain receipts, invoices, and bank statements that clearly show the date, amount, and purpose of each business-related purchase. For vehicle use, a mileage log detailing business trips, including dates, destinations, and miles driven, is important. These records should generally be kept for at least three years from the date you filed your original return or two years from the date you paid the tax, whichever is later.