When a family considers adoption, one of the first problems they often encounter is the cost of adoption. The costs associated with adopting a child can be overwhelming; however, with proper planning and budgeting, the challenge of paying for an adoption can be met.
The costs of adoption vary by the type of adoption being pursued. The cost estimates for the four basic types of adoption are:
|Domestic Agency||$20,000 and up|
|Domestic Independent||$10,000 and up|
|International||$25,000 and up|
For any of these types of adoption, the important thing to remember is to plan for the expenses in advance. The expenses typically must be paid at various times over the life of your adoption journey. They usually do not have to be paid all at once.
The most common expenses related to adoptions involve agency fees, home study, attorney’s fees, counseling, medical expenses, travel expenses and court fees. In addition to using personal financial assets, many people turn to other sources of help to fund their adoptions. These resources can include family help, grants, crowdfunding efforts, and various fundraising efforts.
Fortunately, for adoptions finalized in 2020, there is a federal adoption tax credit of up to $14,200 per child. Taxpayers can use this credit to reduce their federal tax liability. The credit is available in various amounts for all families which have up to $254,520 in adjusted gross income. The credit begins to phase out for higher income families. To qualify for the credit, you simply have to incur typical adoption expenses for a successful or failed adoption that are concluded in the tax year. The credit does not apply to the adoption of a stepchild.
If you have additional questions about the costs associated with adoptions or any other adoption-related matters, please don’t hesitate to give us a call. We have many years of experience and can help guide you through the adoption process. Contact us today by calling (479) 521-5820 or by filling out the below contact form.