Adoption costs?

[Anonymous]

Adoptive parents, can you tell me how you managed the costs and the impact of the tax credit on your refund?

DH and I cannot have any more children due to severe and apparently irreversable uterine scarring. I really don't want to try IVF because it is so expensive and in my case I'm told the chance of miscarriage would be high. So we are beginning to look into adoption but staggered by the cost - $20K. I know it's a complex legal process and that legal services are expensive, but I didn't realize it would be that expensive. We have some savings right now but not that much. DH wants to wait until we have the money saved, which I know is logical, but my heart breaks thinking about waiting even longer. We started TTC 1.5 years ago, our first child is getting older every day, and the emotional toll of the fertility testing and failed surgeries has taken its toll. I am okay with borrowing some money or using credit (if you can do that?) IF the tax credit will allow us to pay of the debt quickly.

So, I'm just curious how others financed their adoptions and what the impact of the federal credit was. Our AGI is somewhere around $150K. Thanks all.

[Anonymous]

You get an credit of the amount (forget what - $12,000 or so). Basically, it reduces your tax liability for that year and if you did not pay that much in taxes, it carries over. Be prepared to spend a lot more than that. $20,000 is conservative if you get lucky quickly. We basically lived off of one salary and put mine toward adoption paying cash as we went. We did not want to risk getting into debt. We probably spent between $40-50,000 on different agency's, advertising and attorneys. Our actual adoption was only about $14,000.

Honestly, if you have one child, I would not adopt if you cannot afford to pay cash. It was worth it for one. If you can adopt quickly, hassle free, it is worth it but there are no guarantees, agency's want a lot of money up front and do not have to provide you with a child, lots of scams, attorneys are a rip-off, etc. If you did not have a child, its worth it.

[Anonymous]

Anonymous wrote:You get an credit of the amount (forget what - $12,000 or so). Basically, it reduces your tax liability for that year and if you did not pay that much in taxes, it carries over. Be prepared to spend a lot more than that. $20,000 is conservative if you get lucky quickly. We basically lived off of one salary and put mine toward adoption paying cash as we went. We did not want to risk getting into debt. We probably spent between $40-50,000 on different agency's, advertising and attorneys. Our actual adoption was only about $14,000.

Honestly, if you have one child, I would not adopt if you cannot afford to pay cash. It was worth it for one. If you can adopt quickly, hassle free, it is worth it but there are no guarantees, agency's want a lot of money up front and do not have to provide you with a child, lots of scams, attorneys are a rip-off, etc. If you did not have a child, its worth it.

Thanks. I don't need advice on whether to add a second (that's intensely personal) but I do appreciate the info on costs. I don't live in DC so I am not worried about scams, multiple agencies, advertising, etc. We've thoroughly vetted possible agencies and have spoken to parents who've used them. You don't pay the placement fees until you actually have a child placed with you - and there are minimal upfront costs for parent profiles, etc. And all legal fees are included in that $20K figure, which seems to be pretty standard across the board in our part of the country.

Bottom line is what $$ impact did the tax credit have on your refund, and at what HHI?

[Anonymous]

Just adopted! Domestic

$32,000 for the actual adoption
BUT there are numerous additional fees. I.E: the home study to get clearance to adopt, post adoption visits by the social worker, fee for the local lawyer (retainer,) more money to the local lawyer when the adoption is finalized, possible fees for supporting the birth mom until the birth (domestic,) fees for making a profile book for birth moms/lawyers to use (domestic,) and travel costs for international adoption. You are BEYOND fortunate to have 1 child. If you can swing it to adopt a child, too, that would be great. If not, you are still blessed to have 1. Adoption through foster care is far less $ but has it's own obstacles. You just need to weigh your options and decide. FWIW, I am SO glad I adopted. Good luck!

[Anonymous]

Anonymous wrote:Just adopted! Domestic

$32,000 for the actual adoption
BUT there are numerous additional fees. I.E: the home study to get clearance to adopt, post adoption visits by the social worker, fee for the local lawyer (retainer,) more money to the local lawyer when the adoption is finalized, possible fees for supporting the birth mom until the birth (domestic,) fees for making a profile book for birth moms/lawyers to use (domestic,) and travel costs for international adoption. You are BEYOND fortunate to have 1 child. If you can swing it to adopt a child, too, that would be great. If not, you are still blessed to have 1. Adoption through foster care is far less $ but has it's own obstacles. You just need to weigh your options and decide. FWIW, I am SO glad I adopted. Good luck!

Thanks! Wow, $32K. Geez. The $20K we've been quoted for a domestic include all of the things you mention. Agencies here help birth mothers get Medicaid to cover their pregnancy and childbirth costs (if they do not have their own insurance), so that is not an issue. You are only responsible for the costs of care for the baby.

And yes, I know I am blessed to have one. I really don't want to have that debate - hopefully we can all just agree that these are personal decisions and leave the judgments and platitudes out of it?

No one has info on the $$ impact of the tax credit?

[Anonymous]

Don't get discouraged by this! I adopted internationally and it was waaaay less than $40,000. 20k is about accurate though. I discovered later that when you adopt in DC there is a cap for residents. I can't recall how much but significantly less, like $6000 and this was not through foster care. You should look into this. It may have been for black or mixed race children, however.

If you really want a healthy white infant you are looking at more money.

[Anonymous]

I have adopted domestically twice, and both times was given estimates of around $20,000. Both times, it cost over $40,000 once the additional costs mentioned above are added in. Also, many birthmothers have additional expenses -- such as a need for housing, clothing, utility payments -- that are not covered by Medicaid. One of the reasons that they may be placing is that they lack these basic necessities and, in order for them to live and eat before they give birth the PAPs are frequently asked to contribute to, if not wholly subsidize, these expenses. Sorry, I can't help you with the tax credit but your agency or lawyer should have the answer to that question at the tip of their fingers.

[Anonymous]

You can find details about the amount of credit & how your HHI affects it at http://www.irs.gov/Individuals/Adoption-Benefits-FAQs. (I googled "adoption tax credit" and it was one of the top 5 links.)

Be aware you can't claim the credit until the tax year your adoption is finalized. In our case, though our daughter came to live with us in November 2008 (and we had paid all our fees by then), b/c it was an international adoption with a specific visa (I want to say IR-4?), we had to readopt her in a DC court & couldn't claim the credit until the return we filed in April 2009.

(That was a very specific circumstance, but if you're counting on getting the credit immediately, 180 mos. makes a big difference.)

[Anonymous]

Anonymous wrote:Don't get discouraged by this! I adopted internationally and it was waaaay less than $40,000. 20k is about accurate though. I discovered later that when you adopt in DC there is a cap for residents. I can't recall how much but significantly less, like $6000 and this was not through foster care. You should look into this. It may have been for black or mixed race children, however.

If you really want a healthy white infant you are looking at more money.

I don't care about the race or ethnicity of the child.

[Anonymous]

Anonymous wrote:I have adopted domestically twice, and both times was given estimates of around $20,000. Both times, it cost over $40,000 once the additional costs mentioned above are added in. Also, many birthmothers have additional expenses -- such as a need for housing, clothing, utility payments -- that are not covered by Medicaid. One of the reasons that they may be placing is that they lack these basic necessities and, in order for them to live and eat before they give birth the PAPs are frequently asked to contribute to, if not wholly subsidize, these expenses. Sorry, I can't help you with the tax credit but your agency or lawyer should have the answer to that question at the tip of their fingers.

Good to know. It will be something for us to ask. We will probably go through Catholic Charities and in the information they provided, they mentioned nothing of subsidizing housing and health care costs for birth mothers. I don't know if the church covers it or what, but I am not prepared to take care of health care at full cost for several months, unless there is a way to add the birth mother to our insurance.

[Anonymous]

Anonymous wrote:You can find details about the amount of credit & how your HHI affects it at http://www.irs.gov/Individuals/Adoption-Benefits-FAQs. (I googled "adoption tax credit" and it was one of the top 5 links.)

Be aware you can't claim the credit until the tax year your adoption is finalized. In our case, though our daughter came to live with us in November 2008 (and we had paid all our fees by then), b/c it was an international adoption with a specific visa (I want to say IR-4?), we had to readopt her in a DC court & couldn't claim the credit until the return we filed in April 2009.

(That was a very specific circumstance, but if you're counting on getting the credit immediately, 180 mos. makes a big difference.)

Sorry, I should've said the return we filed in April 2010.

[Anonymous]

See, this is what confuses me:

"2.The maximum amount of the credit is $12,650 that means you can reduce your 2012 tax bill by up to $12,650."

Does this mean that if we owe $0 in taxes (which we try very hard to do every year), that we'd get a refund of $12,650?

[Anonymous]

Ask an accountant.

[Anonymous]

I think you mean you aim to not have to pay additional at tax time, not owe zero tax. So you could end up with refunds or carryover credits depending on your other issues.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You get an credit of the amount (forget what - $12,000 or so). Basically, it reduces your tax liability for that year and if you did not pay that much in taxes, it carries over. Be prepared to spend a lot more than that. $20,000 is conservative if you get lucky quickly. We basically lived off of one salary and put mine toward adoption paying cash as we went. We did not want to risk getting into debt. We probably spent between $40-50,000 on different agency's, advertising and attorneys. Our actual adoption was only about $14,000.

Honestly, if you have one child, I would not adopt if you cannot afford to pay cash. It was worth it for one. If you can adopt quickly, hassle free, it is worth it but there are no guarantees, agency's want a lot of money up front and do not have to provide you with a child, lots of scams, attorneys are a rip-off, etc. If you did not have a child, its worth it.

Thanks. I don't need advice on whether to add a second (that's intensely personal) but I do appreciate the info on costs. I don't live in DC so I am not worried about scams, multiple agencies, advertising, etc. We've thoroughly vetted possible agencies and have spoken to parents who've used them. You don't pay the placement fees until you actually have a child placed with you - and there are minimal upfront costs for parent profiles, etc. And all legal fees are included in that $20K figure, which seems to be pretty standard across the board in our part of the country.

Bottom line is what $$ impact did the tax credit have on your refund, and at what HHI?

Scams happen anywhere, not just DC. You really need to look into this as there is more to expenses than just the tax credit. And, just you live in one state, does not mean your child comes from your state. Its not as simple as you are making it out to sound.