Pet influencers are hotter than ever. But how do dogs do taxes?

A dog-tired husky with bright pink ears rests on the marble hotel floor, napping before his next meet-and-greet. Around him, the atrium echoes with the sounds of Louboutins click-clacking and businessmen chattering over overpriced cocktails. The stone resting spot isn’t as comfortable as the luxury pet bed he’s accustomed to, but the pup’s plush Louis Vuitton doggie vest cushions him as he recovers from the packed routine of an elite dog influencer.

With over 7.5 million followers on TikTok, Swaggy Wolfdog is a full-blown celebrity – he (or at least his team) is used to getting approached by strangers, who might ask for a selfie. But as I approached the stylish pup and his handler, something possessed me. All I wanted to know was how an influencer dog – or its owner – files taxes. So, I asked.

It’s a reasonable question. For a human influencer, making content and building an audience is only half the battle. To make a sustainable living, creators need to know how to run their own businesses, reckoning with questions about whether to get an EIN number, when to register an LLC, how to budget with a variable monthly income and how to file taxes. How much more complicated does the paperwork become when the breadwinner is moreso a bone winner?

“The dog has his own LLC, and everything that the dog does, we write it off. From dog food to sometimes when we go out of town, he has his doggie hotel, and now, he has clothing,” said Aaron Phillips, a record producer who works with Swaggy Wolfdog’s owner, a musician named Swagrman. “All of his dog food, all of his friends’ dog food… and human food, because he likes chicken.”

Swaggy’s situation isn’t like most influencer dogs. He’s fending off paparazzi on Hollywood Boulevard, throwing pool parties with a horde of bikini-clad models, getting chin scratches from the late Juice Wrld and hanging backstage at a music festival with star singer Camilla Cabello. But filing taxes can be daunting even for pets who have thousands rather than millions of followers like Swaggy.

To help manage emerging pet influencers, Harvard Law School graduate Loni Edwards founded The Dog Agency in 2015.

“Back in the day, people didn’t think of it as a business,” Edwards told TechCrunch. But when her French bulldog Chloe became an early pet influencer, she saw an opportunity.

“We were getting invited to these events in New York, and when people found out I was a lawyer, they were like, ‘Oh my gosh, I got this contract, can you help me out?’” Edwards said. “And so I was unofficially reviewing contracts with people, helping and guiding them.”

Now, The Dog Agency is one of the top talent companies for pet influencers. But Edwards takes a more conservative approach to canine taxes than Swaggy’s team.

Edwards points out that rules vary between U.S. states and that it’s best to consult a tax advisor when managing a small business. Still, she helps clients figure out which of their pet’s expenses can be considered a business cost.

“If you have a car and you use it for work five days a week, you can write off that percent of time you’re using it for work. It’s similar with dog food,” Edwards explained. “If the pet is creating content and influencing half of the time, then [write-off] 50%.”

The same goes for a home office. A dog might not be typing away at a desk, but the dog’s owner probably needs dedicated space to shoot content, edit videos, and store pet outfits and supplies. According to the IRS, a small business owner can deduct up to $1,500 for a portion of their home that’s used exclusively and regularly as an office. Someone who commutes to office space elsewhere would not be eligible, but you’d be hard pressed to find an Instagram famous puppy in a WeWork.

If you’re buying an item specifically for a pet’s business, it’s more straight-forward, Edwards said. If you’re going to dress your Golden Retriever in an “Airbud” costume for a Halloween-themed TikTok, then that dog-sized basketball jersey would count as a write-off.

Once your pet ascends the ranks of the dog and pony show, you might consider how to register their business. According to Colleen Wilson, the owner of talent agency Pets on Q, most pet influencers don’t need LLCs until they’re making well over $100,000 per year.

“On our roster of over 2000 animals, you’d probably have under 10 that have an LLC set up,” Wilson told TechCrunch.

Sometimes, creators set up LLCs for legal protection, but those concerns aren’t as relevant for an animal. Wilson said, “It ends up being a bit more work to set up as an LLC, because the risk of them being sued as a dog is like… what are you going to do there?”

When it comes to taxes, Wilson points out that there’s a far simpler way to figure out what might count as a write-off. If you’re fostering an animal through a registered non-profit, all unreimbursed costs for pet care are tax deductible.

Beyond the do’s and don’ts of tax deductibles, the pet influencer business gets even more complicated.

“For tax purposes, we first have to figure out what their valuation is,” Wilson said.

It might sound silly to quantify a dog’s business potential, but Pets on Q has its approach down to a science. Wilson explained that pets tend to have a lower return on investment in brand campaigns than a human influencer, so their rates for sponsored posts would be around a third lower.

Animal influencers are cheaper because a pet generally doesn’t make as strong a case for buying something as a human can. Sure, Boobie Billie can model for Esquire and snag a partnership with Nordstrom, but she can’t tell you if her doggie Uggs run a size too big, or if her Old Navy dress is surprisingly preferable to her Gucci cardigan.

If animal influencers aren’t as successful at sales, they can make up for it through sheer lovability. “People are less likely to hate them, like a Kardashian or a celebrity that could mess up in the future,” Wilson said.

Your pet might never find themselves in the dog house after chastising American women for not working hard enough, but there are downsides. Pets generally do not have very long lifespans — a real tear-jerker of a business liability. Losing a beloved animal can be devastating, but that grief gets even more complex when that pet also brings home the bacon (but not literally, because bacon can cause vomiting in dogs and cats).

Edwards experienced this first-hand when her dog Chloe the Mini Frenchie died from an unexpected medical error in 2017. Since then, she has repurposed Chloe’s Instagram to post about her new French bulldog dog, Emma.

Last year, the beloved TikTok star Noodle the Pug passed away at age 14. The geriatric pup was frail in his old age, so he went viral in 2021 when his owner, comedian Jonathan Graziano, created a game called “bones or no bones.” If Noodle could stand on his own (he had bones), that would signal a good day – but if he didn’t have the strength (no bones), then maybe it was a universal sign to wear comfy pants and stay inside.

Edwards represented Noodle, but she doesn’t think that Noodle’s passing will pose a financial roadblock for Graziano. Graziano’s children’s book about Noodle is already a New York Times’ best seller, and he has another Noodle book coming out soon.

“It’s just as much Jonathan as it was Noodle,” Edwards said. “So there is longevity there, and Jonathan is getting ready to foster and bring in new senior rescues, so he’s staying on brand with the theme of the account.”

Pet influencing is a dog-eat-dog industry, but Wilson tries to maintain her perspective.

“The amount of money that these pets and their owners make is a little ridiculous,” she said. “Where I work, it’s a very interesting, interesting world.”

Pet influencers are hotter than ever. But how do dogs do taxes? by Amanda Silberling originally published on TechCrunch