Resources


  • June 16, 2021 2:01 PM | Anonymous


    It is possible to get all the money you need for your adoption; however, there are some misconceptions about exactly how to make this happen.  Many families get the idea that they can get all grants or do one fundraising event to cover all the costs of their adoption.   These misconceptions get perpetuated through social media and other channels, but it simply is not true. 

    Have there been instances where a family has received lots of money for their adoption through grants and fundraising?  Of course, but these are the exceptions not the rule!  It is important when you are starting out on your adoption journey that you are realistic about the finances you will need.   

    We recommend a diverse approach when putting together a financial plan for your adoption.  The Adoption Finance Coaching system is designed to take families through a budgeting and timing process that will uncover all the expenses for your journey.  Our Coaches understand that there is no ‘one-size-fits-all,’ we help you create a comprehensive, customized financial plan for your journey.

    Below are best practices for creating your own financial plan for your adoption journey: 

    Your Own Money

    Yes, you need to contribute to your adoption with your own money.  Foundations expect this and it’s important to set aside money for your adoption each month. 

    We recommend reviewing your own personal budget and identify an amount of funds you can contribute monthly. It doesn’t matter how much; it matters that you are committed to this amount, and you do it! 

    Set up a separate account for your adoption where you’ll put all the money for your adoption. This helps you track expenses and your progress. 

    Family Gifts

    Likely you will have family members that will want to help…Let them!  Include them in your plan, let them know what your plan is and exactly what you need and how they can help. 

    For funds received by family and friends, you can receive up to $14,000 in cash gifts without claiming that money on your taxes. That is per person, per year! Gifts are cash and cannot be tax deductible. Always check with your tax advisor or professional about any tax decisions you make. We are not tax advisors. 

    Adoption Loans

    Loans are typically one of the first steps considered when you are putting together your plan.  Why? Because in most cases a family wants to secure whatever money they can so the process can move forward. 

    Start with your home bank.  Where do you have a banking relationship?  You have a better chance at refinancing your current mortgage or taking out a home equity loan with the bank that has the existing mortgage.

    Research other lenders. Credit Union’s such as America’s Christian Credit Union are offering adoption lines of credit that can be a useful option.  Other Credit Unions are Firefly Credit Union, Vystar and perhaps more.  If you’re a member of a credit union, we encourage you to research this option. 

    Zero-interest lenders.  There are a few lenders who are in the nonprofit sector who provide loans with no interest.  One of the most popular is Pathways For Little Feet They offer loans of up to $7,500. They consider credit score, income, and financial need. 

    Others are Lifesong for Orphans and Abba Fund. They are all religious organizations. Some may or may not have any faith requirements or statements that are needed for loan approval.

    Consider a combination of a grant and loan. An excellent example of this is A Child Waits. They provide grants to adoptive families and can also give a low interest loan in addition to a grant.

    They have no deadlines for submission, nor do they have any religious affiliation. They do require a co-signer.  Loans and grants or a combination cannot exceed $10,000.

    Grants

    Popular foundations include HelpUSAdopt, Lifesong for Orphans, Gift of Adoption and Show Hope.  Each foundation has their own guidelines and restrictions that must be followed when applying. 

    A simple internet search will provide a full list of foundations providing grants to families.  Families can waste valuable time hunting for grants on the internet without the proper guidance. Our coaches can help families connect to the right foundation to get the best results.  

    Be sure to read the web site and information before applying.  We do not recommend applying to ALL foundations. It is a waste of your time and theirs as you will not qualify for all of them, and you are taking valuable resources from a family that might qualify.     

    Fundraising

    Fundraising is not for everyone!  If you are not the type of person that enjoys planning, details and events, then it’s likely not going to be your thing! 

    Many families have had a great deal of success with fundraising for their adoption. But they will tell you themselves it’s time consuming and requires attention to detail and planning ahead. 

    Best practices for a successful fundraising event include:

    • Know how much you need.  Do your budget first, ask for a realistic amount. 
    •  Give yourself enough time!  At least 6 months from start to finish.
    •  Ask for help!  Gather some of your friends and family to help you – they may have ideas or experience that will help with the process.
    •  You will have to spend some money – establish your budget.  No matter how large or small your event, you will have to spend some money.  Be realistic about this going in, set a budget, make a plan. 
    • Be flexible!  Ask anyone who has planned a wedding, shower or graduation – flexibility is the key to a successful event.  You have to make a decision in the moment and sometimes roll with it! 

    Other

    Social media platforms come to mind when we talk about ‘other.’  Social media platforms such as GoFundMe, Facebook, Adopttogether.org are all viable options when fundraising.  The key to remember about these valuable tools is that they are tools, not events. 

    They should be used in combination of something else you are planning.  If you just plan to do a GoFundme page, then you’ll have to make a plan. Just like your fundraising plan, you will need to plan for how you’ll post, what you’ll post, writing your compelling story, who you will share it with, how many times and most important - how you will drive traffic and interest to your page over time.  These platforms can be very successful; but can be the most beneficial when used as a part of an overall fundraising plan for your adoption. 

    Community Built Through the Adoption Journey: Let Your Community Help Grow Your Funds

    Finally, we consider it a privilege and honor to have the opportunity to work with so many clients to help them build their family through adoption.  There is no greater way to bring a community together than through adoption.  We encourage you to invite your community in! 

    Family and friends and others in your community want to be a part of this extraordinary experience.  Whether they give money, time or talent, you will be amazed at the generosity of others when you invite them in.  Our best advice – LET THEM!  

                                                                                


  • May 19, 2021 12:34 PM | Anonymous member (Administrator)

    Adoption Tax Credit


    Call it the eighth wonder of the adoption world, the Adoption Tax Credit has helped thousands of adoptive families recoup the costs of their adoption.  Unfortunately, many families don’t take full advantage of this credit. This can be due to a lack of understanding or direction from their own tax professional or worse they don’t even bother to take the credit once their adoption is complete.

    What is the Adoption Tax Credit?

    The Adoption Tax Credit is just as it says, a ‘credit’, meaning that you receive back only what you have paid in tax liability.  The credit was refundable for a short period in 2010 and 2011 and then returned to its credit status in 2012.  The credit is claimed one time for each child. There are many organizations, advocates and politicians who support the tax credit and who continue to rally for it to one day be refundable…then it really will be the eighth wonder of the world!

    But for now, it is what it is and the Adoption Tax Credit for Adoptions complete in 2020 is $14,300.00.  This amount changes each year.

    Below are guidelines for how to take full advantage of the adoption tax credit:

    1. Find out if your tax advisor or accountant knows about the Adoption Tax Credit.  If they do not, then find an accountant who does and who has used it before.  An excellent resource for this is Bill’s Tax Service, Becky Wilmoth located in Centralia, ILL.  I know no better resource that is willing to help families work through all of the intricacies of this credit.

    2. Once you find an accountant or tax advisor who knows about the tax credit then take it one step further and ask them to review your tax liability and provide some insight as to how it can benefit you.  Too often families wait until the end to do this part and it’s much better knowing going in what kind of refund to expect or even if it’s better to lower your dependents for a period of time until the adoption is complete.

    3. Keep all of your receipts!  Invest in a folder or binder and mark it ADOPTION TAXES and keep every receipt that you get for your adoption.  Don’t try to make the decision if it’s deductible or not, you can do that when you sit down to apply for the credit.  If you are doing an international adoption, the moment you return home, make copies of your receipts, many times the ink in foreign countries will fade over time. 

    4. You file your adoption tax credit once the adoption is complete.  For example, if you start your adoption in 2015 and it is not complete until 2016 then you’ll file your adoption tax credit on the next year’s taxes. 

    5. Learn the modified adjusted gross income (MAGI) phase out ranges for the credit. If your modified adjusted gross income is $254,520 or more, your credit is zero.  For those making between $214,520 – up to $254,520 then your credit is reduced.  These amounts change every year. This information is available on the IRS.gov web site – simply search Adoption Tax Credit.

    6. Don’t forget your STATE adoption tax credit! Although it is true many States have phased out on the adoption tax credit, it’s worth it to find out if you live in a State that still has one.  Ask your tax advisor or check your State Department of Revenue web site.

    7. Be sure to check with your tax advisor or accountant about how long you can take the tax credit. According to the North American Council on Adoptable Children web site, the credit can be taken for six years, the first year your adoption is complete and then for five years after. 

    Bottomline, this is an important factor when considering adoption. While there is no silver-bullet, no one ‘thing’ is going to pay for all of your adoption, there are many ways to develop a plan for how you’ll come up with all the money you’ll need to bring your family together forever.  In the meantime, some excellent resources are listed below for how you can learn more about this credit. 

    Oh, and by the way, advocate, advocate, advocate…. even though the tax credit is permanent, it still needs to be refundable.  Pick up the phone and call your representative to let them know how important changing the credit to a refund is to the future of so many families.

    Resources:

                   North American Council on Adoptable Children www.nacac.org

                   Bill’s Tax Service – http://centralia-il-taxservice.com

                   IRS - http://www.irs.gov/Credits-&-Deductions/Individuals/Adoption-Credit

                   Adoption Tax Credit – www.adoptiontaxcredit.org


YOUR ADOPTION FINANCE COACH  |  1233 West 70th Street  |  Kansas City, MO 64113  |  816.682.5500  |  coach@youradoptionfinancecoach.com

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