For the first time in God only knows how many years we are doing our own tax return. For years CS has been an "independent contractor" for his company and I have owned my own business. Last year both of us spent the entire year gainfully employed for someone instead of ourselves. This means one thing... Federal Taxes Withheld!!! We have not had such a luxury in eons. Of course that meant unusually high tax bills and having to pay someone to make sense of the boxes of documents and receipts we collect over the years. Not anymore my friend, not anymore. This year we are going to give it a go and try to do the damn things ourselves.
But there is a catch. A little thing called the Form 8839 Qualified Adoption Expenses. You know the one. Where you get a handy little credit from the government when you adopt a child. The reason you sit in the Social Security office with a hungry 2 year old. Yeah that.
To get to the point of actually doing our taxes and being able to take said credit we had to go about figuring out our adoption expenses. Parts of the adoption are acceptable expenses while some are not. I'm not an accountant, but I'm going to go with the "official expenses" as opposed to those like say.... the really fancy Matroyska or the hockey jersey I bought on Arbat Street. Things like the agency fees, homestudy fees, child Visa medical exams, child Visa, Russian Registration, USCIS fees those kinds of things.
In the process of adding up those expenses I started coming across a ton of receipts from our local post office and our Secretary of State's office. I began realizing that there is a huge chunk of the adoption budget that people don't really consider. Postage. If you are lucky like us and your agency is out of state you will spend more time in your local post office or FedEx store than you ever care to remember. I am also pretty sure that the people at the Secretary of State's office know me, CS and Kathou all by name.
To give you a clue as to some of the over the top things we paid for here is a list:
Apostilles (in WA only, this doesn't include the FL or WI ones we did) - 52 documents at $15 a page = $780
County Fingerprinting - $20
County Background Checks (2x) - $80
State Background Checks - $30
State Fingerprint Checks - $30
Certified copies of Marriage Certificate - $9
And last but not least
Postage - $171.70 (that is just the receipts I could find. This doesn't include the 50 gagillion DHL envelopes we sent.)
(I just love it when blogger has visual verification with no visual!!)
Starfish, our travel costs were almost the same as our agency fees. Only about $2K shy.
Tricia, we ended up $20K over too.
I think if you ask your agency they should send you a statement with all the costs that can be used that you paid into them. Of course they should all be okay I would think.
Don't forget to add your donation (if it was cash) to your charity contributions not your adoption expenses. Hopefully that will help out even more.
Feel free to e-mail me if you have any questions. I might not know but working in a tax office I can find out easily.
The charitable contribution to the orphanage is not tax deductible. since the money is given directly to the orphanage it doesn't qualify. We checked into this. Charitable contributions only are tax deductible if they are given to organizations originating in the US. And yes we have an itemized sheet that says what the expenses we paid to the agency are. It is listed in our contract.