For Americans:
OK, well, you know nothing's free. But here's how you can spend as little as possible on your Ukraine adoptions: Adopt multiple kids.
Why? Because, at this time there is an $11,650 tax credit per child. This is not a tax deduction, but a tax credit. Money that is subtracted directly off the tax amount you owe. If your taxes are less than the amount, you can carry the credit forward up to five years until it's gone.
Facilitator fees for 2 children are most likely not 2 times the cost for one child, and 3 children would not be 3 times the cost. For example, with our faciliator, the fee is about 50% more for two, but the tax credit is fully double. And the fees are less for older children.
If you're using an adoption agency, then you're paying extra for... I'm not sure what. We are going independent - it is cheaper. I know that in Canada an agency is required. And maybe your state requires one.
The point I'm trying to make is that if money is an issue for you, then consider more than one child, especially older ones. That is good for you and them.
Note: I'm not a tax advisor. Please consult your tax attorney or accountant.
For more info see:
How to claim the adoption credit
Official IRS info
Subscribe to:
Post Comments (Atom)
2 comments:
While there are indeed many great perks for adopting and the tax credit is indeed for real, I do caution people against banking on this tax credit to finance your adoption. There are three reasons for this.
1) Even though we adopted two kids and got a double credit, our total adoption expenses WELL exceeded the allowable credit.
2) It is highly unlikely you'll get the whole credit back in one year. You can't get back more at one time than your current tax bill. If your tax bill for the year is $6,000, you can only use $6,000 of your adoption tax credit that year. That is why there are provisions for this credit to be carried over for 5 years. What you don't use the first year will be rolled over and used towards the next year's and probably at least the next year's after that tax bill.
3) You never really know what will happen until after you're home and the kids start to adapt to their new life. Even many families who host first find their kids need professional help in healing once they get home. Therapy is expensive. We adopted two children. Both are FAR more traumatized than was ever disclosed to us or we ever saw before the adoption was final. In a nutshell, they are both in play therapy and every last dime (and then some) of our double tax credit will go to pay for medical bills. Unfortunately, most insurance companies don't pay very well on anything related to mental health.
Just something for you all to consider...
Diana, your points are well taken. Of course, with more kids come more expenses both short and long term. College, weddings, cars, clothing, food, dentists, doctors just to name a few. But the same is true of bio kids. The point I'm making, if not very well, is that the direct adoption costs can in some cases be close to 0 under certain circumstances.
Post a Comment