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  • Adoption Tax Credit 2017

    Radio Show

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    Host Dawn Davenport, Executive Director of Creating a Family, the national infertility & adoption education and support nonprofit, interviews: Josh Kroll, Adoption Subsidy Resource Center coordinator at NACAC; and Becky Wilmoth, an Adoption Tax Credit Specialist at Bills Tax Service.

     

    + Highlights of the show (click to expand)

    • When can you file for the Adoption Tax Credit: international, domestic (non-foster care), foster care.
    • If your adoption from foster care did not cost you anything, are you still eligible for the Adoption Tax Credit?
    • How to find out if the state considered my adopted child “special needs”?
    • Do I have to wait until all my expenses are totaled before claiming the Adoption Tax Credit on my taxes or if I spent a certain amount of money in one year, can I claim that the next year even if my adoption is not final?
    • Can I file my taxes as “head of household” if I became guardian of my child this year, but the adoption is not complete?
    • Are Embryo adoptions (embryo donations) allowed under the Adoption Tax Credit?
    • How are adoptions from foster care treated differently from other types of domestic adoptions under the Adoption Tax Credit?
    • How much is it the credit for 2017?
    • Can claim only once per adoption.
    • What is a “tax credit” and how best to use it?
    • Confusion over how much you owe in taxes vs. withholding and how much you have to pay or receive back if you had more withheld than you owe.
    • What is allowed to be included in the Adoption Tax Credit? What is considered a qualified adoption expense?
    • Are the fees paid for foster care when adopting from the Democratic Republic of Congo Adoptions while the child was waiting to leave the country able to be included as qualified adoption expenses funder the Adoption Tax Credit for the year(s) that the child was still in the DRC?
    • Are legally allowable birth mother expenses for domestic infant adoption allowed to be claimed as a qualified adoption expense under the Adoption Tax Credit?
    • Are travel expenses allowed to be claimed as a qualified adoption expense under the Adoption Tax Credit?
    • What are the income limits for the Adoption Tax Credit? How are bonuses handled?
    • What type of documentation do you need to have for the expenses you are claiming? Do you need to submit the documentation along with your taxes?
    • How long can your carry over the credit to best be able to make full utilization of it?
    • Can you claim expenses for a failed adoption?
    • If you do not have enough taxable income to take advantage of the Adoption Tax Credit, what can you do to show more taxable income and receive the carryover credits?
    • What happens with the Adoption Tax Credit if you complete two separate adoptions in one year? In two consecutive years?
    • Can you claim a child as a dependent on your taxes if the adoption has not been finalized?
    • Tips and tricks for claiming the Adoption Tax Credit.

     

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    Image credit: John Morgan

    05/01/2017 | by Radio Show | Categories: 2017 Shows, Adoption, Adoption Radio Shows, Radio Show | 3 Comments


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    3 Responses to Adoption Tax Credit 2017

    1. Paula C says:

      It was mentioned that using a Roth IRA conversion to take advantage of the adoption credit (by applying it to tax liability from the conversion) would incur a 10% penalty if you’re under 59-1/2. Actually, there is no 10% early withdrawal penalty if the funds move from the Traditional IRA to the Roth IRA within a 60 day window. (Of course, you should always check with your tax accountant before making any assumptions for your personal situation!)

      • Dawn Davenport Dawn Davenport says:

        Thanks Paula.

      • Mike T says:

        I believe you are correct. There would be federal fax on the amount converted from Traditional IRA (Before Tax) to the Roth IRA conversion. This would be one way to use the adoption tax credit. Also if you withdrew funds out of the out of Traditional IRA before age 59 1/2 without the Roth conversion there would be federal tax and the 10% penalty. I believe the adoption credit would cover the federal tax but not the penalty. As you stated check with your tax account.

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