The Federal Tax Credits Blog

Archive for the ‘Adoption’ Category

Question: How does the 10,000 special needs adoption tax credit work?

I’ve read I get to claim the whole 10K without documentation. Is that true? Does anyone have experience with this? Any info would be appreciated.
You didnt even come close to answering my question. I’m talking about not having reciepts for adoption expensense related to taxes and if you are referring to me only adopting for the money you are sadly mistaken. I’ve worked with emotionally disturbed kids for seven years. It is what I am good at so I want my own. Yours is a common reaction though. Most people cant believe a person would adopt these kids out of love. What a sad selfish world we live in. Hey its the American way!!! Whatever is best for the individual… screw the rest. I’m American by the way…

Answer: I understood that the $10K adoption credit was for ANY adoption, not specifically “special needs”.

That being said, we adopted a “special needs” child in 2004. We actually brought him home in 2003, but could not claim the adoption credit until the adoption was finalized in 2004. The only adoption information that we needed was an adoption tax ID number since he did not have a social security number.

I wish I could be of more assistance, but I believe you could research more about the tax credit on the internet.

Good luck!

Host Hotels & Resorts, Inc. Reports Results of Operations for the…

HST , the nation’s largest lodging real estate investment trust (REIT), today announced its results of operations for the fourth quarter and for the full year ended

Education here gets 8.5 % increase in Rendell’s proposed budget

Lancaster County’s public schools are due for a whopping 8.5 percent increase in state funds — an extra $14 million — in next year’s budget.But school district officials aren’t ready to break out the champagne.They’re still smarting from the 101-day standoff that preceded…

Shareholders’ Day 2009

Question: Deciding to adopt. Where do we start?

For personal reasons, me and my husband have decided to adopt over trying to have our own children. We have always planned to adopt anyways, but now, its one of our only options for becoming the parents we so desperately want to be. My husband is 21 and i am 20. We have been together for 4 years and married for almost 2… I’m not sure if both adoptive parents have to be 21 or not, but if so we are willing to wait. Can anyone explain the process of how to adopt a newborn or infant (since this is our first child, we would like to experience the baby stages)? We prefer a closed domestic adoption. My husband is in the Marine Corps until 2012 and we live in Virginia. Will the military help with costs? And what is a tax credit??

Any info, links and experience stories would be appreciated. Thanks.

Answer: If you would like to be a foster parent chances are pretty good that Eventually you might be able to adopt a child that has had it’s parental rights terminated. But you must Remember that the purpose of foster care is temporarily caring for a child whose goal Entering care is return home at some point.
You would both need to be 21 in Illinois to foster or adopt. There are many infants in the foster care system and the hope is that these infants Do get to return home—but many will not due to the failure of their parents to complete the service plans established for them.

School Notes

DISTRICT 112

How to Apply For Free Government Grants

Home buyers who are building their new homes and hope to qualify for the $8K tax credit should know that they have to be moved into their home by December 1st in order to qualify. A sales contract won’t do it! The credit is good until November 30, 2009, which gives home buyers whose residences are under construction only a few more months to qualify.

For already-built homes, qualifying for the tax credit is relatively easy. You buy a home, you move in. For those who are having their homes constructed, there are a lot more steps to go through before one can carry the first couch through the door.

It takes time to choose a buyer, to decide on a location and floor plan and any options that the builder offers. This can make buying new construction more time consuming than a pre-built home. Builders are open to working with buyers, but they are limited in how much they can accomplish in a short period of time. Building a home from the foundation up can take up to half a year, depending on outside factors like materials, worker availability and the kind of work to be done on the home.

There are also issues with contracts, home inspections and certificates. Most of the time, these are easily obtained and passed. However, if there is a problem, it could mean a delay of days or weeks while things get straightened out. You shouldn’t hurry through a new construction purchase just to get the tax credit. A home that is improperly built can cost you a lot more than $8K. The key is to plan very carefully and use builders with a solid reputation. Don’t skimp on inspections and certifications either; you will regret it if something turns out to be wrong with your home and your warranty has expired.

New construction buyers may still be in luck; apparently the effect on new construction by the tax credit has been small thus far. This could mean that builders are less busy with new construction and can still have time to build your home and move in before the first day of December. Ask the builders you interview how much of a workload they have and ask if they can give you some kind of guarantee that the home will be completed by the time you specify.

Builders want your patronage and are willing to work with you, but it’s getting to the point where they can’t build you the house of your dreams in the time allotted. If you have your heart set on a new construction, it’s time to start the home buying process, so you don’t get caught on December 1st with a half-finished home and no Tax Credit Eligibility.

NC economic recovery money creates jobs, helps environment

RALEIGH — The N.C. Department of Environment and Natural Resources received more than $157 million as part of the American Recovery and Reinvestment Act. The department is using the money to stimulate the economy, create jobs and help cities, towns and counties with a host of environmental improvements.

Peter Newman, Scott Borden, Michael Lee: Economics 2009

Question: Adoption Tax Credit on a Roth IRA conversion

I have over a $12K adoption tax credit I’m trying to burn up. Last year, I converted most of my retirement from a traditional to a Roth IRA. We have 2 kids, and I thought I would get $2K for the child tax credit ($1K per child). However, after I filled out everything, I only got about $400 back. I was shocked to find out that converting from a traditional to a Roth used my child tax credit FIRST, then used my adoption tax credit. Can someone explain this? I’m thinking about converting the rest of my retirement to a Roth, but if it takes away our child tax credit, then it doesn’t seem worth it. Thanks in advance for your answers.

Answer: When you convert a Traditional IRA to a Roth you pay income tax on the conversion amount. There’s no way to avoid that. You don’t pay the 10% penalty but taxes are due.

Credits of any type reduce your tax dollar for dollar. The sequence that they are applied is based upon the law. Most credits are non-refundable meaning that they only reduce your tax liability to $0. Any unused credit at that point is lost. If you are taking a tax hit on the conversion then the credits are doing their job, i.e. reducing your tax liability. Look at the bright side here, at least you’re not having to write a check as some folks do.

Over time a Roth will always work out better for you unless you are very close to retirement age. That’s because with a Roth the money is taxed going in but all gains are TAX FREE on the other end. With a Traditional IRA you do get some tax benefit now but the gains are taxable as ordinary income when you withdraw them.

January calendar

Branson Area Festival of Lights Drive Through, 700 Expressway Lane, Branson. Hours: dusk-11 p.m. nightly through Jan. 2, 2010. Admission: $10 for family vehicles; $25 for mini-coaches, vans or limos; $50 for full-size motor coaches; $20 for vehicle season pass. Visit www.explorebranson.com or call 334-4084.

ABBA Fund Introduction