If you are a Adoptive Parent you may find these IRS tax tips very helpful.
We are former IRS agents that can help and assist you in IRS tax filing and tax representation.
These tax tips are for our clients of Fresh Start Tax LLC.
Tax Tips for Adoptive Parents
If you have paid expenses to adopt an eligible child in 2011, you may be eligible to claim a tax credit of up to $13,360. Not a bad tax credit.
The expanded adoption credit.
The Affordable Care Act increased the amount of the credit and made it refundable, which means you can get the credit as a tax refund even after your tax liability has been reduced to zero. This can offer you a large tax refund.
For tax year 2011, you must file a paper tax return, Form 8839, Qualified Adoption Expenses, and attach documents supporting the adoption.
Taxpayers that are claiming the tax credit will still be able to use IRS Free File or other software to prepare their returns, but the returns must be printed and mailed to the IRS, along with all required documentation.
Documents can include a final adoption decree, placement agreement from an authorized agency, court documents or the State’s determination for special needs children. The documentation is an absolute must.
The Qualified Adoption expenses are reasonable and necessary expenses directly related to the legal adoption of the child. These expenses may include but are not limited adoption fees, court costs, attorney fees and necessary travel expenses.
The eligible child must be under 18 years old, or physically or mentally incapable of caring for himself or herself. Make sure your adoption qualifies for the tax credit
If your modified adjusted gross income is more than $185,210, your credit is reduced. If your modified AGI is $225,210 or more, you cannot take the credit.
Should you have any question regarding this credit or need professional tax prep call to hear more today.
