Dog Walking and Pet Sitting Business: Entity Structure, Deductions, and Worker Classification

Dog walking and pet sitting businesses have grown significantly with platforms like Rover and Wag connecting pet sitters with clients. Whether operating through a platform or independently, dog walkers and pet sitters are self-employed and report income on Schedule C. The business is not an SSTB, so the QBI deduction is available at all income levels.

What are the deductions for a dog walker?

What about platform fees?

Rover charges pet sitters a service fee (15-25% of the booking). Wag charges a similar fee. The platform issues a 1099-K for the GROSS amount (what the client paid), not the net amount (what the sitter received). The sitter must report the gross amount as revenue and deduct the platform fee as an expense.

When does a dog walker need to hire employees?

A solo dog walker who books more clients than they can walk personally must either turn away business or hire help. If the walker hires another walker:

• The assistant uses the owner’s client list: employee factor
• The assistant follows the owner’s schedule: employee factor
• The assistant walks the owner’s routes: employee factor
• The owner collects payment and pays the assistant: employee factor

These factors strongly point toward employee status. A legitimate independent contractor arrangement would require the assistant to bring their own clients, set their own schedule, and collect their own payments, which defeats the purpose of hiring help for the owner’s existing client base.

Can I deduct startup costs before my business earns any revenue?

Under IRC 195, you can immediately deduct up to $5,000 of startup costs in the year your business begins operating, with the remainder amortized over 180 months (15 years). The $5,000 immediate deduction phases out dollar-for-dollar once total startup costs exceed $50,000. Startup costs include market research, travel to investigate the business, advertising before opening, employee training before operations begin, and professional fees for setting up the entity. The key requirement is that the business must actually begin operating; costs for a business you investigated but decided not to pursue are generally not deductible. The amortization period starts in the month the business opens its doors to customers, not when you began incurring costs.

Do I need insurance for a dog walking or pet sitting business?

Yes. General liability insurance covers property damage (a dog you are walking breaks a neighbor’s fence) and bodily injury (the dog bites a passerby, or you trip and injure someone while walking on a sidewalk). Pet care bonding covers theft or damage to a client’s property while you are in their home, which is essential for pet sitters who have unsupervised access to homes. Commercial auto coverage is needed if you transport pets in your vehicle, since personal auto policies typically exclude business use. Some pet care businesses also carry care, custody, and control coverage, which covers veterinary bills if a pet in your care is injured or becomes ill. Premiums for all of these are fully deductible business expenses. Most pet care liability policies cost $200-500 annually and are available through industry-specific insurers.

Related guides:

• Tax Deductions for Dog Walkers and Pet Sitters: What You Can Write Off

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.