International adoption is quite expensive. I estimate we spent around $60,000 during the whole Russian adoption process. Roughly half of that went to our adoption agency; roughly half of the remainder went to airline tickets. Most of the rest went to other travel-related expenses, including hotels, meals, visas and the like, with the leftover expenses related to paperwork, medical checks, and other minor bits and pieces.
Luckily, the US government is understanding, and kicks in an Adoption Tax Credit that covers, dollar for dollar, the first $13,360 spent (Michigan, at least for 2011, kicks in an additional $1200). That doesn't exactly cover all of the expenses we incurred, but it's nothing to turn down either.
Of course, filing an Adoption Tax Credit triggers an automatic "review" of one's return, and we just received a notice to that effect. Hopefully the "review" is short and sweet and doesn't require our personal participation, but we will see.
ADDENDUM; 3/22: We just got our monthly bank statement today, and it turns out that the IRS direct deposited the portion of our refund not accounted for by the adoption tax credit. I infer that means the "review" will only cover the adoption tax credit documentation, and not the remainder of our return, which is something of a relief. In any case, it's very gentlemanly of them to complete the processing of the rest of our refund, so chalk up another mark in the "giveth" column.
ADDENDUM, JUNE: The IRS asked for a proof of a legal adoption (Elena's adoption decree, or her visa, was sufficient) and proof of expenses. We sent the IRS a signed letter from our adoption agency verifying how much we had paid them, and copies of credit card statements which had our major travel expenses (airfare, mostly), and some miscellaneous receipts. That covered about 95% of what we had claimed on our tax return, and since that number was far in excess of the $13,360 we had to prove to qualify for our credit, we didn't bother with the last 5%. That was sufficient for the IRS, because they reviewed our paperwork for a month or so, and sent is a nice form letter stating everything was A-OK. I'm not sure why they couldn't have done that from the beginning, since we had provided proof of adoption and (admittedly abbreviated, but still sufficient) proof of expenses with our original filing, but the refund showed up in our checking account even before we received their notice, so all's well that ends well.
Luckily, the US government is understanding, and kicks in an Adoption Tax Credit that covers, dollar for dollar, the first $13,360 spent (Michigan, at least for 2011, kicks in an additional $1200). That doesn't exactly cover all of the expenses we incurred, but it's nothing to turn down either.
Of course, filing an Adoption Tax Credit triggers an automatic "review" of one's return, and we just received a notice to that effect. Hopefully the "review" is short and sweet and doesn't require our personal participation, but we will see.
ADDENDUM; 3/22: We just got our monthly bank statement today, and it turns out that the IRS direct deposited the portion of our refund not accounted for by the adoption tax credit. I infer that means the "review" will only cover the adoption tax credit documentation, and not the remainder of our return, which is something of a relief. In any case, it's very gentlemanly of them to complete the processing of the rest of our refund, so chalk up another mark in the "giveth" column.
ADDENDUM, JUNE: The IRS asked for a proof of a legal adoption (Elena's adoption decree, or her visa, was sufficient) and proof of expenses. We sent the IRS a signed letter from our adoption agency verifying how much we had paid them, and copies of credit card statements which had our major travel expenses (airfare, mostly), and some miscellaneous receipts. That covered about 95% of what we had claimed on our tax return, and since that number was far in excess of the $13,360 we had to prove to qualify for our credit, we didn't bother with the last 5%. That was sufficient for the IRS, because they reviewed our paperwork for a month or so, and sent is a nice form letter stating everything was A-OK. I'm not sure why they couldn't have done that from the beginning, since we had provided proof of adoption and (admittedly abbreviated, but still sufficient) proof of expenses with our original filing, but the refund showed up in our checking account even before we received their notice, so all's well that ends well.
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