Saturday, April 26, 2014

Prepping to file taxes post adoption

The Adoption Tax Credit

Every adoptive parent knows about this!  It is for most of us how we hope that we will be able to afford our adoption.  It is why we keep every receipt and piece of paper regarding any fees we paid.  

I would like to give my readers some of my new helpful hints we learned this past season with filing this tax credit.  This year was first time we filed taxes as a mom and dad.  More importantly as adoptive parents.  The Adoption Tax Credit in my opinion is complicated.  I am not good with numbers and all the tax mumbo jumbo makes my head spin.  For this reason we chose to use an CPA.  We have used a CPA for several years to do our taxes simply because it made my life easier.  I just give them all the receipts and W-whatever forms and they call when it is all said and done.  I can not imagine trying to file our taxes that include this tax credit on our own!  I am not saying that you have to use a CPA but I recommend it.

So with that here are some my helpful hints:

  1. Use a CPA- like I stated before you don't have to but for me personally it was  the best way to go.
  2. Have your receipts organized - Not just put into a file but separated by type.  Agency fees, travel expenses, in-country living expenses and so on.  Also, we found out that it helps to scan the receipts into a file and type a brief description of what it was used for and translate it.  Most likely the CPA won't be able to translate international receipts so this will help them know if the receipt is for train tickets or groceries.
  3. Attach a note to the tax forms - I typed a simple note stating everything tax wise that had happened to us over the year and any document that went with it (Yes my OCD kicked in).  For us it was busy year; adoption, selling a house, buying a house, and so I wanted our CPA to have a quick reference to what all the forms we dropped off meant.  I was so glad I did this because our CPA was able to make sure all the necessary forms and what not was with him. It also helped me to make sure I sent in all these papers.
  4. Keep all this stuff together - Once you get your completed taxes back keep all the receipts/form/paperwork together.  I like the idea of putting it all in a big manilla envelope with the tax year written on the front.  This way if you ever need to refer to any of it you can quickly locate all the tax documents in one place.  
I hope this helps and please feel free to share in the comments section any other info that may be helpful to other adoptive parents.