Do you know this?

There are approximately 18000 parents registered with CARA, while the number of children in the Government's adoption pool is less 1800.

Sunday, December 16, 2007

A tip to get most from your adoption expenses

Apart from other inconveniences of inter-country adoption, expense of it can weigh you down quite heavily. It is advised that you should be willing to spare anywhere in the range of 20,000 dollars to adopt from India. If you’re living in the United States, you have some comfort in knowing that you can claim part of your adoption expenses (little over 10,000 dollars) in “Adoption Tax Credit”. If you try this tip, you might be able to get more than that.

Your search for an adoption agency need to include questions to ask to find if the agency is a non-profit organization (I mean 501c3 exempt organization) and what amount of money is to be given as a “donation”. Also find out if you could get a separate receipt (to deduct your donation under “Charitable contribution” heading) for your donation apart from the receipt for all other adoption expenses.

This is how you’re going to it: Let’s say you had started your adoption process in June of 2006 and completed in December of 2007. You’ll have to wait for at least six months to finalize your adoption. Only after you finalize your adoption, you can claim your expenses under “Adoption Tax Credit” in that year which will be 2008. In 2007, you may have contributed some money towards donation, which you could deduct in 2007 taxes under “Charitable contribution” heading.

Assuming that you had spent 20,000 dollars with 3,000 being for donation, you could claim 3 K in 2007 as a charitable contribution and use the remaining expenses against “Adoption Tax Credit” for the tax year 2008 to claim whatever is entitled. This way you can optimize your taxes to maximum benefit. Bottom line is that you have to plan well in advance to split your expenses under two different headings because in inter-country adoption every penny counts.


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