Extreme financial makeover: Preparing for adoption

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Tom, 31 and disabled, and his wife Elisa, 35, want to get their finances in order so they can adopt a baby in 2–5 years. They live in North Carolina and own an editorial business. The projected costs of adoption are $17,000–$21,000 in fees and $2,000–$3,000 in monthly expenses. Other monthly costs include utilities ($400–$500) and medical expenses ($200–$400). Their goal is to eliminate their debt and build savings. They also have a $9,000 second mortgage.

“The couple should pursue government grants for the disabled, says Brian Greenberg, who is an independent accountant. (You can learn more about what the federal government offers to people who have disabilities at disability.gov)

Also, Internal Revenue Service has an adoption tax credit for which the couple might qualify, says Jeff Wool, who is a financial planner. The credit for 2011 is slightly more than $13,000 “and is usually available for covering the out-of-pocket expense of adoption,” he says. You can find details at irs.gov/taxtopics/tc607.html.

As we said in our report about adoptions in our March/April 2007 issue (“Adoptions Guide 2007: Making Your Wish Come True”), the couple can take other actions to manage expenses: If Tom or Elisa seeks a full-time job—no guarantee, of course, in an uncertain economy—many companies help to pay for adoptions. We found at adoptionfriendlyworkplace.org a list of 100 companies that pay $5,000–$24,300 for adoption expenses. And holtinternational.org has a list of 511 companies that provide financial assistance or parental leave to employees who seek to adopt. Further, people can apply online for private grants from agencies and foundations in amounts that range from $1,000 to $7,500.

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S. Berg