[scottw1976]

My wife and I are just starting the research process of adopting a child. One of our main concerns with the process is the associated costs.

I understand there is a substantial tax credit given by the IRS. Is the credit a deduction or is it subtracted from your total tax bill?

I've also noted a good amount of loan and grants available. Where is the best place to start this research process? Are there any other avenues we can look into to help offset these costs?

Thank you very much...
Scott

[DianeS]

The Adoption Tax Credit is a credit, not a deduction. It is subtracted from your tax liability, not from your income. If in the year you adopt the Adoption Tax Credit reduces your tax liability all the way to zero without using up the entire Adoption Tax Credit, you can carry over the remainder of the Adoption Tax Credit for up to 5 years.

No clue about the grants and loans, though, hope somebody else chimes in about those.

Good luck!

[kidmd2b]

Hello,
With the grants, I heard that it is very uncommon to be selected and many of them require an application fee which all adds up. Most people that I have heard from get home equity lines of credit or home equity loans and then pay them off with the tax refund. Dh and I are still trying to figure out what exactly we would like to do because the high interest rates of home loans make us cringe right now. Many people suggest garage sales and fundraisers which is nice, but I don't think that there is a really financially responsible and sound solution to the financing problem.

[benhenny]

Adoption itself isn't that expensive. It's all the middlemen that cost, such as facilitators, agencies, and lawyers. To keep costs down, you can adopt domestically from within your state and do an independent adoption. If you feel like you need a lawyer, shop around. There are good ones that don't charge a lot, and then there's all the rest.

If you can find birthparents in your state and who are cooperative, you can conceivably adopt for less than a few thousand dollars, depending on your state. There are books out on how to adopt without a lawyer. A home study will cost between $1,000 and $3,000 and is required.

Keep in mind that get up to $10,000 back with the credit, and while the average adoption costs $12 - $15,000, you can do it for under the $10,000 - costing you nothing in the long run. ---I know a lot of people spend a lot more than $15,000.

Adoption costs are primarily for the home study and fees to be listed with an agency. A lawyer isn't cheap either, but you can find one that will let you do some of the paperwork yourself. You don't need pay a lawyer $400 to file a form that you can print out, fill in, and file yourself at the courthouse for $19.

Finally, find an adoption support group in your area. It's the best thing we ever did. You can learn a lot from others in your situation - most importantly which agencies/lawyers/facilitators NOT to use.

[Papa D]

First, the $10,000 tax credit is the best incentive going, but you can only take it beginning in the year you've finalized the adoption, and of course you need to OWE money to the government to wipe out your tax liability. I'm going through the process of dramatically decreasing my fed withholding to take advantage right now.

Second, a private, or independent adoption, will save you lots of money. Agency adoptions can cost between $20,000 and $40,000, and international adoptions are pushing $20K now too. A private adoption only requires legal costs, which average between $3,000 and $5,000. But we learned a tough lesson in a different area - encourage the potential birthmom to get on Medicaid even if she has health insurance. We got stuck covering a $2,000 deductible, plus 20 percent of all ensuing costs after that, so medical costs are going to be a good $5,000 for us, then there's the legal fees.

I DO NOT recommend doing any of this without a good, reputable adoption lawyer. They may charge you $300 an hour and you'll cringe at the bills, but the court filings, the documents needed, and if it's an interstate adoption, the ICPC needs to be in tip top shape or you'll be stuck in another state with a new baby for weeks.

[shy_bear]

Papa D where did you look that agency adoptions were b/t 420,000 and $40,000??? We have adopted domestically through agency's twice; our first adoption was under $6,000 and our second was $12,000 plus travel. We were trying to go through a county to do foster/adopt, but long story short it did not work for us, so we are in the great debate of whether we should go private and still do foster/adopt or save and do another infant adoption. I have called numerous agency's in our area and most of them are under $20,000.

Our rule of thumb is to always go with an agency that charges a flat fee. You know up front, regardless of birthparent's situation, what YOUR cost will be.
I would also try to find an agency that works on a sliding scale based on income.

[mking]

I just wanted to respond about the grants. I researched all the grants for adoption I could find. I'm a teacher and have a lot of experience in grant-writing. I even applied for a grant for a free IVF cycle and got it. But with the adoption grants, we had to pay an application fee ($25 each) and I never heard from them. NEVER! Not even an "I'm sorry" letter or email. I called to follow up and they just blew me off. I think it's a terrible thing to do to couples who, at this point, have probably broken their piggy banks with IF treatments and are now having to come up with big $ for adoption costs. I hope that someone else has had a better experience with adoption grants and can share a happier ending for you.

Good luck,
Mandi

[ChitownTracy]

Jumping in....we are in the chicago area, our agency was $15,000 with a nearby agency starting at $25...
I have always wondered if agency cost is more in large city's....hmmm

great advice on going with a flat rate!

Originally Posted by shy_bear

Papa D where did you look that agency adoptions were b/t 420,000 and $40,000??? We have adopted domestically through agency's twice; our first adoption was under $6,000 and our second was $12,000 plus travel. We were trying to go through a county to do foster/adopt, but long story short it did not work for us, so we are in the great debate of whether we should go private and still do foster/adopt or save and do another infant adoption. I have called numerous agency's in our area and most of them are under $20,000.

Our rule of thumb is to always go with an agency that charges a flat fee. You know up front, regardless of birthparent's situation, what YOUR cost will be.
I would also try to find an agency that works on a sliding scale based on income.

[Usmc0369]

My husband and I have gone through the trials and tribulations of trying to start a family though infertility treatments, IVF, and now on the path towards adoption. After tens of thousands of dollars have been spent, my husband and his brother are in the process of developing a website to share financial resources, fundraising, and creative methods to remove the financial barriers to giving a child a loving home. The website will be up and running soon and I will post when it is ready, but if anyone wants to receive an email update, please let me know and I will ensure you are notified personally. My goal is to ensure that the financial cost doesn't stand in the way of my adoption, and also to share this information along the way to help others achieve their dream of parenting through adoption. Thoughts and prayers are with you all along the journey. If you have any suggestions of how you have gone about overcoming the financial resources, please let me know.
Email me at: childadoptionfund@yahoo.com