Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Sometimes I feel like there’s a tax credit for everything—but the tricky part is finding out for which tax credits you qualify and how to receive them. One interesting and important tax credit that may be available to you is the adoption credit.
Why do we care so much about the adoption tax credit?
The adoption tax credit is one of the most generous of all refundable credits. For 2010 and 2011, it’s worth $13,170 and $13,360 respectively—per child. Your employer may also pay an equal amount of money towards your adoption costs if your costs exceeded your credit. That’s a lot of money that could go toward helping you achieve your financial goals.
How do you qualify for this tax credit?
You must adopt a child (or children). The child being adopted must either be under age 18 or be someone who is unable to care for him or herself.
Even if you have no out-of-pocket expenses related to the adoption, you may be able to claim the full credit if you adopt a child with special needs. There are special rules for adopting children who might otherwise never get adopted. (For more information, see page 7 of the instructions to Form 8839.)
What else do you need to know about the adoption tax credit?
Kelly’s story: Adopting a stepchild after a divorce
In the TaxQuips forum, a woman named Kelly posted when her adoption tax credit was denied. Whether the IRS is right or not remains to be seen, but her case brings up some important issues.
Kelly got divorced. And after the divorce, when she was no longer related to her former husband or his child, she formally adopted her ex-husband’s child.
The question becomes whether Kelly is considered to be related to the boy because he used to be her stepson. According to the IRS’s rules about related parties for gift taxes, business ownership, and so forth, relationships that were created during a marriage remain intact, even after a divorce. But does that rule apply to adoption?
Kelly’s situation is worth taking to Tax Court for the judge to decide. Unfortunately, Kelly claimed the tax credit early—in the year before the adoption was final. We advised her to let it go for 2010 but to claim it in 2011. When it’s denied, she can then file in Tax Court and see what happens. It’s quite possible that the Court might decide in her favor.
Is it too costly for her to gamble and file in Tax Court? Anyone may file his or her own case, paying a fee of only $60, and the judges are usually quite gracious to folks representing themselves. So it is likely worth her time and money to take this route.
Best Tax Tips: The Tax Effects of School Supplies and Courses
2012 Standard Mileage Rate: How it affects Your Business Vehicle
Entrepreneurs and Start-Ups: Best Tax Tips
August 2011 Summer Tax-Free Days
Common Mistakes the Self-Employed Make
How Divorce Affects Your Tax Return
Sales Tax – Are All Those Receipts Worth Saving?
Eva Rosenberg, EA is the publisher of TaxMama.com , where your tax questions are answered. Eva is the author of several books and ebooks, including the new edition of Small Business Taxes Made Easy. Eva teaches a tax pro course at IRSExams.com and tax courses you might enjoy at http://www.cpelink.com/teamtaxmama.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.