Adopting? Tax Credit Increases for 2008 and Beyond
Good news! If you’re an adopting parent (as my wife and I will be, hopefully in 2009…), you know the high cost associated with the adoption process. Well, if you adopted this past year, you might actually enjoy your taxes this time around!For parents who completed the adoption process in 2007, you may be eligible for a federal tax return of up to $11,390 for qualified adoption expenses. In fact, if you started the adoption process in 2007, but won’t complete the process until this year, you may be able to claim some expenses incurred in ’07. The tax credit runs through 2010, but there is apparently wide support to make the tax credit permanent in the future.
According to the IRS website, qualifying expenses include “reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home), and other expenses directly related to and for which the principal purpose is the legal adoption of an eligible child.”
You should file form 8839 if you would like to claim the adoption credit.
For all the fun associated with the IRS descriptions and rules, you should check out the official IRS website. My advice is to have a glass of wine as you read, it helps keep the stress level down…