The beginning of a new year always finds me buried knee deep in paperwork. Like most people who are expecting a tax refund, we like to file as soon as possible. In order to pull that off by the first week of February I need to begin sorting paperwork and entering numbers now. This is partly because we have a farm that makes many of our purchases and utilities tax deductible. On top of that we finalized two adoptions during 2007, so that adds another stack of paperwork. One of our adoptions has a fixed deductible not requiring any receipts because it was considered a special needs adoption. This was our 10-year-old daughter who has lived in our home for three years as a foster child. Our other adoption was a private, infant, interstate adoption.

While most of our expenses for our private adoption occurred in 2006, we were unable to use any of them on our 2006 tax return. The way the tax laws are written require that the deductions be taken in the year the adoption is finalized. Many states have a policy requiring a child to live in the adoptive home for six months with periodic reviews before the adoption can be finalized. Our daughter was adopted from Texas and they have such a policy. Because she was born in July, we could not finalize in 2006. Super Dad and I flew down to Texas in February of this year to finalize our adoption.

Unfortunately, I don’t think I am going to be able to include those Maverick tickets at the Airline Center as an adoption expense. While Super Dad considered them a mandatory expense I don’t think the IRS would feel the same way.

Adoption expenses can be carried over for five years if you cannot use the entire deduction in the year that the adoption took place. This is fortunate for us since we ended up having two adoptions finalized in the same year.

Reflections on Yesterday’s National Adoption Day
Tax Benefits for Families of Special Kids Photo Credit Julia Fuller 2007