Monday, January 30, 2012

Tax Credit

Can someone riddle me this?

The tax law states that if you have adoption expenses but the adoption is not finalized you cannot make a claim on your taxes until the following year.  So in our case we had adoption expenses in 2010 and we did not finalize.  In 2011 we also had adoption expenses and we did not finalize.  So I went to try to claim the rebate for the expenses we had in 2010 (the application fee, finger prints, book, etc $1500).  Turbo Tax wont let me claim the $ because I dont have the name of a qualified child.  I still have expenses though!

It does tell me that I would need to send a copy of our Home Study letter to prove you are in the adoption process.  So why would the approval letter be sufficient if you need an actual child in your custody?  Its as if they think that the love the adoption process and its expenses might lure me into paying for an application but not have intent to adopt a child.

Theoretically our child will arrive this year and we wont have to worry about the law sunsetting before we get to claim these expenses on our taxes.  I'm mostly worried because we are not a family of great resources being able to get back some of the money we put into this process determines if we can have another child.

I dont get it.  I'm frustrated.

I've also heard that claiming adoption expenses on your taxes increases your chances for an audit.  Just one more way adoption makes me feel like a criminal.

1 comment:

  1. Yeah... we had to file for a tax ID number for Gus for our 2010 expenses (last year) because we had not finalized when we did our taxes for 2010. We finalized April 15, 2011 (Tax day- ironically).

    This year we can finally submit for all the expenses for 2011 (a HUGE amount) because he is finalized. It's a mess though.

    We were audited last year... and I'm sure we'll be audited again this year. I think a lot of people were (maybe everyone that applied for the tax credit got audited).

    We went to a tax person last year because we weren't sure of what to do with the adoption expenses. This year we did it ourselves and it was easier.

    Best of luck to you... you SHOULD be able to get credit for everything you spent $$ on whether or not you've physically got a child. You're waiting for one!!