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Ten Facts about Adoption-Related Tax Savings

Adoption can create new families or expand existing ones. The expenses of adopting a child may also lower your federal tax. If you recently adopted or attempted to adopt a child, you may be eligible for a non-refundable tax credit. You may also be eligible to exclude some of your income from tax.

Here are ten things the IRS wants you to know about adoption tax benefits.

The maximum adoption tax credit and exclusion for 2014 is $13,190 ($13,400 in 2015) per eligible child.

  1. To be eligible, a child must generally be under 18 years old. There is an exception to this rule for children who are physically or mentally unable to care for themselves.
  2. The tax credit is nonrefundable. This means that, while the credit may reduce your tax to zero, you cannot receive any additional amount in the form of a refund.
  3. If your credit exceeds your tax, you may be able to carry forward the unused credit. This means that if you have an unused credit amount for the tax year, you can use it to reduce your taxes for the following year. You can carryover an unused credit for up to five years or until you fully use the credit, whichever comes first.
  4. Use Form 8839, Qualified Adoption Expenses, to claim the adoption credit and exclusion. You can now efile a tax return even when an adoption credit is claimed.
  5. Adoption expenses must directly relate to the legal adoption of the child and they must be reasonable and necessary. Expenses that qualify include adoption fees, court costs, attorney fees and travel costs.
  6. If you adopted an eligible U.S. child with special needs and the adoption is final, a special rule applies. You may be able to take the tax credit even if you did not pay any qualified adoption expenses.
  7. If your employer has a written qualified adoption assistance program, you may be eligible to exclude some of your income from tax.
  8. Depending on the adoption’s cost, you may be able to claim both the tax credit and the exclusion. However, you cannot claim both a credit and exclusion for the same expenses. This rule prevents you from claiming both tax benefits for the same expense.
  9. The credit and exclusion are subject to income limitations ($197,880-$237,880 in 2014; $201,010-$241,010 in 2015).
  10. The limits may reduce or eliminate the amount you can claim depending on your income.

Want to know more? Request a free packet of information regarding the adoption process.

Joshua and Matt
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David was a terrific resource for us throughout the adoption process and I firmly believe we wouldn’t have our wonderful daughter without all the support he provided us. He is a highly experienced professional who made us feel reassured through each step of the way. We have recommended him to friends who have also successfully adopted through his services as well.
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I wanted to send you a very special note to thank you for helping me join my new family. My mom and dad are so happy, and I'm having lots of fun. I really love my new home and thank you so very much for the part you and everyone in your office had in making my family so happy!
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How do I thank you for making my dreams come true? Stacy is a healthy, beautiful, wonderful child and I am so in love with her and so very happy. The entire process of adoption was a joyful one for me and I am so very glad I took your advice regarding the wisdom of an open adoption as I still have a warm relationship with my birth mother. I thank you for your guidance and help.
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You've been wonderful through this whole thing. Very helpful, understanding and patient. This is probably one of the hardest things in life to go through. You found the perfect parents for my baby. No one in this world could be better than them.
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Thank you so much for all the sweet things you've done! You're wonderful at what you do. You've touched my heart in many ways. I'll never forget you.
John and Catherine
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We thank you, David, for being so supportive through it all, and especially for helping us find each other.
Heidi R
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Thank you so much for making my adoption journey as pleasant as possible. I was so pleased with your office & most of the staff. Thanks again.
Marcus, Sue, and Samuel
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A few days ago we celebrated our son's one month birthday. We are all so happy and we feel so blessed. We also realize that our happiness as a family is due largely to your efforts and the efforts of your staff. We appreciate all that you've done for our family.
Joe and Sue
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Thank you for our first Father's Day.
The Law Offices of David J. Radis
1801 Century Park E Los Angeles, CA 90067
Serving Birthmothers all over USA
Toll Free: 800-813-9345
Fax: (310) 552-0713


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