Understanding The Adoption Tax Credit
Adoptive and Prospective Adoptive Families:Did you know that there is a user-friendly website you can consult to help you understand the federal Adoption Tax Credit? Adoption Learning Partners (http://www.adoptionlearningpartners.org) has developed an interactive e-learning course that will help you take advantage of this adoption-friendly legislation that can make adoption affordable. The course is called Understanding the Adoption Tax Credit.
As the government's strategy for promoting and supporting adoption, the tax credit provides a very valuable benefit to adoptive families. At the same time, it is among the most complicated tax law provisions applicable to middle-income families. This e-learning course presents the information in simple language and an easy-to-navigate format. It is currently offered for no charge. All you need to do is go to the website (http://www.adoptionlearningpartners.org).
Using the Adoption Tax Credit, at first glance, seems to be a straightforward process - you qualify based on your income, you track expenses, and you start using the credit based on rules that apply to your type of adoption. However, when you start factoring in the intricacies of your personal financial situation, and begin exploring the implications of actually applying the ATC ...the picture becomes more and more complex.
Understanding The Adoption Tax Credit course, developed by Adoption Learning Partners (http://www.adoptionlearningpartners.org), will give you an understanding of how the Adoption Tax Credit works, and how it might benefit your family. It will provide you with the opportunity to explore:
¨ The criteria used to determine eligibility for the adoption tax credit;
¨ The impact of the tax credit on families with various adoption situations;
¨ How the tax credit might impact your own situation;
¨ How to set up and use a system for tracking and documenting adoption expenses;
¨ The importance of working with a tax expert, including suggested questions to ask and information to provide.
The course is divided into four lessons, starting with an explanation of the key concepts and fundamentals that you need to know in order to apply for the tax credit. There are income limits based on adjusted gross income and differences in how and when you apply the tax credit, based upon the type of adoption: domestic, special needs or international.
Lesson Two takes you through three situations - a domestic adoption, an international adoption and a special needs adoption. The examples have been kept fairly simple so that you will clearly see the effect of the tax credit on a family's finances.
Lesson Three will help you determine what expenses you should track and what expenses aren't acceptable. The lesson helps you create a simple tracking sheet you can use to record and summarize your expenses, as they occur; by first providing an example of a completed sheet, with a second one that you can actually use. If you use home accounting software, such as Quicken or Microsoft Money, the course gives you the ability to download a tracking sheet to your computer. It is important to note that you MUST track expenses and collect documentation throughout the adoption process.
Lesson Four discusses working with tax experts. It gives you information on how to find a tax advisor and provides a checklist of questions to ask and information to take to your meeting. Also available throughout the course is a comprehensive collection of FAQ's (Frequently Asked Questions) and a glossary of terms. In the resource section of the course you can link to the IRS website where you can download forms and instructions, state government units that oversee adoption to review the requirements for your state, and to the AICPA website to find a tax advisor in your state.
Founded by The Cradle, an 80-year old adoption agency in Evanston, Illinois, Adoption Learning Partners (http://www.adoptionlearningpartners.org) seeks to improve adoption outcomes for all members of the adoption circle by providing a vibrant, innovative, education resource on the Internet.
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