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Adoption Tax Credit: A Guide for State Advocates Mary Boo North American Council on Adoptable Children December 2012Introduction The federal adoption tax credit has been a valuable tool to encourage

How to fill out adoption tax credit

How to fill out adoption tax credit:

1. Gather all necessary documents: Before starting the process, ensure you have all the required documents such as adoption agency statements, legal fees, and medical expenses related to the adoption.
2. Obtain Form 8839: The adoption tax credit is claimed using IRS Form 8839. Download this form from the official IRS website or request a copy from the nearest IRS office.
3. Provide personal information: Fill out the personal information section on Form 8839, including your name, address, and Social Security number. If you are married filing jointly, include your spouse's information as well.
4. Determine the adoption expenses: Calculate the total adoption expenses incurred during the tax year. These can include adoption fees, court costs, travel expenses, and other eligible adoption-related costs.
5. Determine the maximum credit: Use the IRS worksheet provided with Form 8839 to determine the maximum allowable adoption tax credit based on your modified adjusted gross income (MAGI). The MAGI limits change annually, so refer to the latest IRS guidelines.
6. Complete Part I of Form 8839: In this section, provide details about the adopted child, including their name, date of birth, and if they have special needs. If the adoption is from a foreign country, provide additional information as required.
7. Complete Part II of Form 8839: This part of the form is dedicated to documenting the qualified adoption expenses. List each eligible expense separately and include the total amount for each category.
8. Calculate the adoption credit: Add up the qualified adoption expenses and enter the total amount in the appropriate field. Subtract any employer-provided adoption benefits, if applicable.
9. Complete the remaining sections: Follow the instructions on Form 8839 to complete the remaining sections, including making the necessary adjustments based on the maximum credit and any unused credit from previous years.
10. Attach supporting documents: Assemble all the necessary supporting documents such as adoption agency statements, legal documents, and receipts. Attach these documents to Form 8839 when submitting your tax return.
11. Double-check and file: Before submitting your tax return, thoroughly review all the information provided on Form 8839 for accuracy and completeness. Make sure all calculations are accurate. Once you are confident, file your tax return electronically or mail it to the appropriate IRS address.

Who needs adoption tax credit?

1. Individuals or couples who have adopted a child: The adoption tax credit is available to individuals or married couples who have incurred expenses related to the legal adoption of a child. This credit applies to both domestic and foreign adoptions.
2. Individuals or couples with qualified adoption expenses: To be eligible for the adoption tax credit, the individual or couple must have incurred qualified adoption expenses, which can include adoption fees, court costs, attorney fees, and travel expenses directly related to the adoption process.
3. Individuals or couples with a modified adjusted gross income (MAGI) within the allowable limits: The adoption tax credit is subject to income limitations. Individuals or couples with a MAGI above the specified limits may have a reduced credit or may not qualify for the credit at all. It is important to refer to the latest IRS guidelines to determine eligibility based on income.

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What is adoption tax credit?

Adoption tax credit is a non-refundable tax credit provided by the government to eligible adoptive parents to help offset the costs associated with adopting a child.

Who is required to file adoption tax credit?

Any taxpayer who has adopted a child and meets the eligibility requirements set by the IRS may be able to claim the adoption tax credit.

How to fill out adoption tax credit?

To claim the adoption tax credit, taxpayers must complete Form 8839, Qualified Adoption Expenses, and include it with their federal income tax return.

What is the purpose of adoption tax credit?

The purpose of adoption tax credit is to help make the process of adoption more affordable for families by providing financial assistance through a tax credit.

What information must be reported on adoption tax credit?

Taxpayers must report expenses related to the adoption, as well as any employer-provided adoption benefits received, on Form 8839 when claiming the adoption tax credit.