Articles

The Joy of Adoption:

In Accounting & Finances, Culture, Education, Family, Taxes on March 30, 2012 by Sufen Wang Tagged: , , , , , , ,

Now with an Added Bonus from the IRS

Have you read the tabloids lately? Brangelina is having another baby! No, not adoption this time, but for those adoptive parents out there who need extra money, here are some IRS tips on taxes and credits.
 
With adoption, comes responsibility – and lots of bills. Luckily, if you paid expenses to adopt an eligible child in 2011, you have even more to be excited about than just a new member of your household. Say hello to an expanded adoption credit. The Affordable Care Act increased the credit to a maximum $13,360 and made it refundable. In other words, you can get the adoption credit as a tax refund even after your tax liability has been reduced to zero.
 
Of course, there’s always fine print when money is at stake. While you may consider the Chihuahua you rescued from the animal shelter to be your baby, the IRS defines an eligible child as “under 18 years old, or physically or mentally incapable of caring for himself or herself.” And those expenses don’t refer to the big screen TV you bought on the way to the courthouse. They mean adoption fees, court costs, attorney fees – basically all the “reasonable and necessary expenses” directly related to the legal adoption. One more qualification: if you are rich like (Brangelina), then you are out of luck. Anybody with a modified AGI of $225,210 or higher cannot receive the credit.
 
Unfortunately, getting the credit requires actual paperwork. Yes, you read that right. You must file a paper tax return, Form 8839, Qualified Adoption Expenses, and attach documents supporting the adoption. No, a hand-written note on a piece of binder paper doesn’t count as a supporting document. The IRS wants you to include stuff like a final adoption decree or a placement agreement from an authorized agency. All of this doesn’t mean you can’t use IRS Free File or other software to prepare your returns first. However, you must eventually print your returns and mail them if you want the IRS to show you the money.

So, for those of you with a big heart and an ache to have children running around the house, adopt away!  Hope this article helps the road to adoption a little easier….

On the Money,
Sufen Wang
Wang Solutions
 

 

3 Responses to “The Joy of Adoption:”

  1. very good post. Ne’er knew this, thanks for letting me know. 95845

  2. I think this is among the most significant info for me. And i am glad reading your article. But wanna remark on few general things, The web site style is perfect, the articles is really nice : D. Good job, cheers

  3. This really answered my downside, thanks!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: