How much will it cost us to adopt?
The total cost of each adoption depends on the facts of each individual case. If the birth mother is living with her parents and covered under the family medical insurance policy, the adoption costs may be quite low. On the other hand, if she is living on her own and has no medical insurance or state health coverage (like Medi-Cal or Medicaid), then the expenses may be higher. She may or may not be employed and that too could impact on what adoptive parents might be asked to provide in terms of financial assistance.
The range of total adoption costs in this office which includes legal and court fees, home study fees and birth mother living and medical expenses is between $8,000–$25,000.00. Before you match or once you are matched with any prospective birth parent we will happily project the estimated total cost of the adoption for your prior approval and discuss means of keeping the adoption costs within your budget.
Are any of our adoption expenses tax deductible?
In January 2013, Congress and the President approved new legislation which was signed and entered into law making the adoption tax credit a permanent credit raised the maximum qualifying limits for families wishing to avail themselves of the adoption tax credit. Clients who qualify for the adoption tax credit, the credit covers the majority of their adoption expenses making adoption more affordable. You will want to speak with your tax advisors or accountant about the applicability of the adoption tax credit to your situation and whether you would be entitled to the entire credit or to only a portion of it based upon your adjusted gross income. Please note that the tax credit is not available in stepparent nor in relative adoption cases.
The law also continues to apply to unsuccessful/failed adoptions. The new law also increases the amount of money which employer may provide to employees tax free to help subsidize adoption efforts. To determine how much of your adoption expenses will be allowed as a tax credit on your federal income tax return please contact your tax preparer or accountant as the new adoption tax credit law will make a major financial impact for the better on the vast majority of adoptive families.
Commencing January 1, 2014 the maximum adoption tax credit for qualified adoption expenses will be $13,190.00. The adoption credit begins to phase out for taxpayers with modified adjusted gross income in excess of $197,880.00 and is completely phased out for taxpayers with modified adjusted gross income of $237,880.00 or more.
What is the financial arrangement during the adoption process?
There are laws in California and in all states where adoption is permitted which define what may and may not be paid to a birth mother.
As all money paid in the adoption process must be accounted for in writing to the Court before finalization, care must be taken about what bills are paid and to whom. We are here to assist you with regard to all financial transactions in the adoption process and to assure compliance with all applicable laws.