Moolah
>> Monday, February 6, 2012
Hubby and I had a rather messy convo about taxes last night, in prep for today's filing. He can be overly pessimistic and estimated us owing in the long run, rather than recouping anything. That prediction had me in a full on anxiety attack, as we need as big of a refund as we can get with another adoption in the works and all of our grand plans for FETs and deFETs.
And as much as I feel we scrimp and scrimp around here, it never seems to make our saving account grow.
Seriously, I shop almost exclusively at Goodwill and Salvation Army on sale days, no less, and eat mostly winter squash so we should be saving something. And with Z no longer on formula, the money should start piling up somewhere, for crying out loud!
I was nearly in tears at the prospect of owing the government more money than the huge chunk they already take, which usually adds up to anywhere from 25-30% of hubby's paycheck.
Well, turns out all of that drama was for naught.
My friends, we are getting the biggest refund I've ever heard of. A refund so large I didn't even know it was possible.
We're getting a refund the size of a lowly teacher's yearly salary.
I know that, because I used to be a teacher and we are pretty much getting back the salary I made when I taught in Washington State (minus the taxes and withholdings I had to pay).
IF H&R did everything correctly. And seeing as we had the manager filling out our return, I should think the paperwork is in order.
First we went to the tax volunteers on base and they got us a return of half the amount. Still large enough to make us nervous about triggering an audit. And seeing as the gray area of adoptions were involved, we thought we should take everything to H&R to make sure our forms were correct, and to get the insurance if anything was wrong.
Hubby knows of a military couple that adopted, but because they claimed their child was special needs, the IRS decided the child was not, audited the couple, and slapped them with a $25K fine on top of penalties, etc. But because the couple had gone to H&R and had gotten the peace of mind insurance, H&R had to pay the penalty and the fine and everything else.
Well, the volunteers tax guy on base said Z was not special needs, even though we have the documentation from DSS in SC. Therefore some of the money we paid for her adoption was unable to be claimed.
The H&R lady said that the declaration by the state of South Carolina is binding and makes Z special needs, hands down. That in turn made us eligible for the total amount of the adoption tax credit refund. A little over $13K. Without the special needs clause we were only able to claim $11K. Not that $2K makes much of a difference but every little bit helps.
Also, because for whatever reason Congress said that for 2011, expenses for adoptions in progress but not finalized (or for failed adoptions, too) could also be claimed, we were able to claim $13K of the $14,500 we spent for our adoption currently on hold. We will not be able to claim any expenses for that adoption in the future, but that's ok because the word on the street is that Congress is backing down the adoption tax credit refund back to a tax credit, and making it $5K for 2013-2015. That is a loss of $8K if we wait to file. So we filed for our second adoption this year as well.
On top of that, Hubby paid over $7k too much in taxes, so we got that back, too.
We did still pay taxes over the course of 2011, though. $4K to be exact. Hubby is very proud of that, despite getting so much money in return.
The only sucky thing is that it takes the IRS around 6 months to give refunds back to families who claim adoption expenses. So we won't be seeing that money for awhile. Plus we totally anticipate being audited. Thus the necessity of insurance, too.
But it's not like we have any immediate plans for it anyways. It's going into savings until we need it to finalize our second adoption, as we are likely going to have to pay around $25K more out of pocket before we bring our next baby home.
Let's just say that if you aren't lucky enough to procreate naturally like bunnies, you certainly are going to pay through the nose for the privilege of being parents.
When we first entered the adoption arena, and paid out that money, we had no clue we would ever see a cent of it back. The entire process of signing with our agency and forking over the money was scary enough. And then when we accepted the private adoption (the one that brought Z into our family) with all of its expenses, I had no clue how we were going to make it work. The years of 2010/2011 were a huge leap of faith financially, especially with hubby's deployment getting turned off - as that is how we figured we would get the money to finish our second adoption. But God always provided. We paid our bills every month, and kept our financial obligations. We never had to take out loans. And it looks like he is continuing to do so. We are so very blessed!
But even if we didn't get a cent back for Z and her sibling(s), they'd be worth every single penny it cost to add them to our family. Even if we were broke as a joke for the rest of our lives and eating split pea soup every night to afford them.
When it comes down to it, what else could be more worthwhile than truly investing in the next generation?
And as much as I feel we scrimp and scrimp around here, it never seems to make our saving account grow.
Seriously, I shop almost exclusively at Goodwill and Salvation Army on sale days, no less, and eat mostly winter squash so we should be saving something. And with Z no longer on formula, the money should start piling up somewhere, for crying out loud!
I was nearly in tears at the prospect of owing the government more money than the huge chunk they already take, which usually adds up to anywhere from 25-30% of hubby's paycheck.
Well, turns out all of that drama was for naught.
My friends, we are getting the biggest refund I've ever heard of. A refund so large I didn't even know it was possible.
We're getting a refund the size of a lowly teacher's yearly salary.
I know that, because I used to be a teacher and we are pretty much getting back the salary I made when I taught in Washington State (minus the taxes and withholdings I had to pay).
IF H&R did everything correctly. And seeing as we had the manager filling out our return, I should think the paperwork is in order.
First we went to the tax volunteers on base and they got us a return of half the amount. Still large enough to make us nervous about triggering an audit. And seeing as the gray area of adoptions were involved, we thought we should take everything to H&R to make sure our forms were correct, and to get the insurance if anything was wrong.
Hubby knows of a military couple that adopted, but because they claimed their child was special needs, the IRS decided the child was not, audited the couple, and slapped them with a $25K fine on top of penalties, etc. But because the couple had gone to H&R and had gotten the peace of mind insurance, H&R had to pay the penalty and the fine and everything else.
Well, the volunteers tax guy on base said Z was not special needs, even though we have the documentation from DSS in SC. Therefore some of the money we paid for her adoption was unable to be claimed.
The H&R lady said that the declaration by the state of South Carolina is binding and makes Z special needs, hands down. That in turn made us eligible for the total amount of the adoption tax credit refund. A little over $13K. Without the special needs clause we were only able to claim $11K. Not that $2K makes much of a difference but every little bit helps.
Also, because for whatever reason Congress said that for 2011, expenses for adoptions in progress but not finalized (or for failed adoptions, too) could also be claimed, we were able to claim $13K of the $14,500 we spent for our adoption currently on hold. We will not be able to claim any expenses for that adoption in the future, but that's ok because the word on the street is that Congress is backing down the adoption tax credit refund back to a tax credit, and making it $5K for 2013-2015. That is a loss of $8K if we wait to file. So we filed for our second adoption this year as well.
On top of that, Hubby paid over $7k too much in taxes, so we got that back, too.
We did still pay taxes over the course of 2011, though. $4K to be exact. Hubby is very proud of that, despite getting so much money in return.
The only sucky thing is that it takes the IRS around 6 months to give refunds back to families who claim adoption expenses. So we won't be seeing that money for awhile. Plus we totally anticipate being audited. Thus the necessity of insurance, too.
But it's not like we have any immediate plans for it anyways. It's going into savings until we need it to finalize our second adoption, as we are likely going to have to pay around $25K more out of pocket before we bring our next baby home.
Let's just say that if you aren't lucky enough to procreate naturally like bunnies, you certainly are going to pay through the nose for the privilege of being parents.
When we first entered the adoption arena, and paid out that money, we had no clue we would ever see a cent of it back. The entire process of signing with our agency and forking over the money was scary enough. And then when we accepted the private adoption (the one that brought Z into our family) with all of its expenses, I had no clue how we were going to make it work. The years of 2010/2011 were a huge leap of faith financially, especially with hubby's deployment getting turned off - as that is how we figured we would get the money to finish our second adoption. But God always provided. We paid our bills every month, and kept our financial obligations. We never had to take out loans. And it looks like he is continuing to do so. We are so very blessed!
But even if we didn't get a cent back for Z and her sibling(s), they'd be worth every single penny it cost to add them to our family. Even if we were broke as a joke for the rest of our lives and eating split pea soup every night to afford them.
When it comes down to it, what else could be more worthwhile than truly investing in the next generation?
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