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I texted my cousin complaining that she didn't call me back yesterday like she said she would. Well, she called me today to say that she was in LABOR. The tried stopping it a day or so before and it worked for about 24 hrs. They decided i they gave her another shot, contractions would probably just start again after it wore off and the risks of continuous shots out weighed the risks of giving birth. 12 hours later my cousin has a beautiful, healthy, 5pd 13 oz, 19 inch beautiful baby girls with a HEAD FULL OF HAIR!!!
This babies birthday is so fun! She was born exactly 5 years and 5 days after her big sister.
She was born exactly 21 years after my little sister
She was born 16 days after my 1st cousin Joshua
She was born 2 years and a couple days after my 2nd cousin Erin.
She is EXACTLY 14 months older than my Nephew!!!!
We now have 4 girls in our family born in Oct. all, their names ending in "N".... Shannon, Jaelynn, Erin, Ashlynn.
Thursday, October 9, 2008
How to afford adoption: By Russ
Several months ago I stumbled across this: http://thevoiceofadventure.blogspot.com blog. It is a family who has one biological child, one child adopted at age 7 from Guatemala, and one toddler recently home from China. Her husband, Russ, posted the below information on affording an adoption. While some of it was way over my head, I was able to get the gist of it and was excited about it!
$$$ FREE ADOPTION MONEY $$$
How You Can Afford To Adopt
(written by Angel's husband Russ)
I know. I know. I know. Husbands are to be seen and not heard, but I enter the blogosphere bearing good news to many who fear the cost of adoption. So many times when people inquire about our adoption, they express their desire to adopt as well as their doubts that they could ever cover the cost. As such, Angel has asked me to lay out how almost everyone has access to at least $13,000 – $18,500 to cover adoption costs – FREE MONEY! Also, I’ll talk about how to get as much of that money up front to minimize any need to take on debt.
First of all…what do I know about this stuff? In addition to having gone through the adoption process, I have a background of tax planning and high net worth investment planning with Deloitte & Touché. That said, I must add the disclaimer that I have been out of the business for a while (4+ years) and before employing any ideas I write here, I would encourage you to speak to a current tax professional.
I’ve done my best to simplify this as much as possible, but it can get pretty complex in some cases. Please feel free to email us with any questions you have.
Boring stuff aside, let’s get to the good stuff.
Tax Credit vs. Tax Deduction:
First, let’s discuss the difference between a tax credit and a tax deduction because this causes confusion for a number of people and its important to understand this before we go any further. The most important note is that a tax credit is more beneficial as it reduces your tax liability dollar for dollar.
A tax deduction (e.g. mortgage interest) reduces your taxable income. In other words, someone who had taxable income $50,000 and had tax rate of 15%, they would pay $7,500 in taxes. If they had a $10,000 deduction, their taxable income would go to only $40,000 and their taxes would go to $6,000 (15% of $40,000). They would save $1,500 in taxes.
If they had received a tax credit instead of a deduction, they would have still had $50,000 of taxable income creating a tax liability of $7,500; however, the tax credit would reduce their tax liability dollar for dollar to where they would receive a $2,500 refund rather than paying taxes.
Question #1: Where does this money come from?
Answer: Your taxes and your company. Let’s break it down.
Source #1: Adoption Tax Credit ($11,000)
I know. I know. I know. Husbands are to be seen and not heard, but I enter the blogosphere bearing good news to many who fear the cost of adoption. So many times when people inquire about our adoption, they express their desire to adopt as well as their doubts that they could ever cover the cost. As such, Angel has asked me to lay out how almost everyone has access to at least $13,000 – $18,500 to cover adoption costs – FREE MONEY! Also, I’ll talk about how to get as much of that money up front to minimize any need to take on debt.
First of all…what do I know about this stuff? In addition to having gone through the adoption process, I have a background of tax planning and high net worth investment planning with Deloitte & Touché. That said, I must add the disclaimer that I have been out of the business for a while (4+ years) and before employing any ideas I write here, I would encourage you to speak to a current tax professional.
I’ve done my best to simplify this as much as possible, but it can get pretty complex in some cases. Please feel free to email us with any questions you have.
Boring stuff aside, let’s get to the good stuff.
Tax Credit vs. Tax Deduction:
First, let’s discuss the difference between a tax credit and a tax deduction because this causes confusion for a number of people and its important to understand this before we go any further. The most important note is that a tax credit is more beneficial as it reduces your tax liability dollar for dollar.
A tax deduction (e.g. mortgage interest) reduces your taxable income. In other words, someone who had taxable income $50,000 and had tax rate of 15%, they would pay $7,500 in taxes. If they had a $10,000 deduction, their taxable income would go to only $40,000 and their taxes would go to $6,000 (15% of $40,000). They would save $1,500 in taxes.
If they had received a tax credit instead of a deduction, they would have still had $50,000 of taxable income creating a tax liability of $7,500; however, the tax credit would reduce their tax liability dollar for dollar to where they would receive a $2,500 refund rather than paying taxes.
Question #1: Where does this money come from?
Answer: Your taxes and your company. Let’s break it down.
Source #1: Adoption Tax Credit ($11,000)
In 2007, the current tax laws will allow you to be fully reimbursed for up to 10,960 of qualified adoption related costs (most of you adoption costs are qualified) through the Adoption Tax Credit. A tax credit is more beneficial than a tax deduction. This credit is allowed in the year that the adoption is finalized, but can be limited for high income families ($165,000+).
Any expenses reimbursed by your employer do not qualify for the credit; however, most international adoptions will cost more than the Adoption Tax Credit and any employer reimbursement together so you will be able to receive both in full. See example #6 below for scenario where adoption costs are lower than the total of the employer reimbursement and Adoption Tax credit.
Source #2: Child Tax Credit ($1,000)
Source #2: Child Tax Credit ($1,000)
For each child, the current tax laws allow you to take another tax credit of up to $1,000 per child. This tax credit is not related to the adoption, but instead to the fact that you have a new child in your home. You can take this credit every year the child is a dependent in your home. This tax credit starts being reduced if your AGI (basically your income less retirement plan contributions, health insurance and student loan interest and a few other deductible items) exceeds $110,000 for families.
Source #3: Personal Exemption (appx. $825)
Source #3: Personal Exemption (appx. $825)
You receive a tax deduction (different from the tax credits we have shown above) of $3,300 for each person in your family. If you are in the 25% tax bracket, then your taxes would go down by $825 (25% of $3,300). To see which tax bracket you are in, find your taxable income off of last year’s tax return and compare to the table below.
Tax Bracket Taxable Income
10% 0 - 15,650
15% 15,650 - 63,700
25% 63,700 - 128,500
28% 128,500 - 195,850
33% 195,850 - 349,700
35% 349,700 and Up
Source #4: Charitable Deduction (appx. $500)
Tax Bracket Taxable Income
10% 0 - 15,650
15% 15,650 - 63,700
25% 63,700 - 128,500
28% 128,500 - 195,850
33% 195,850 - 349,700
35% 349,700 and Up
Source #4: Charitable Deduction (appx. $500)
In most adoptions, part of the adoption cost involves a charitable donation to the orphanage, which is usually around $2,000. This can be treated as a charitable deduction for tax purposes. Again, if you are in the 25% tax bracket, you may receive a benefit of $500 (25% times $2,000).
Source #5: Employer Contribution ($0 - $5,000)
Source #5: Employer Contribution ($0 - $5,000)
Many employers today will reimburse a portion of your adoption costs. Most employers reimburse between $1,000 and $3,000; however, some are even more generous. Check with your human resources to see whether your company provides this benefit. This benefit is not taxable for income tax; however, you will pay social security and medicare taxes out of it (7.45%).
Source #6: State Tax Benefits ($0 - ???)
Some states offer tax incentives for adoption as well. These benefits differ by state and may be limited to in-state adoptions, so you will need to check locally for more information. I can confirm that Texas does not offer incentive most likely due to Texas not having a state income tax.
Some states offer tax incentives for adoption as well. These benefits differ by state and may be limited to in-state adoptions, so you will need to check locally for more information. I can confirm that Texas does not offer incentive most likely due to Texas not having a state income tax.
Question #2: How do I get the money when I need it?
Answer: Adjust how much tax is withheld from your paycheck. Most people think they have to pay these taxes up front and then wait for a return. This causes a cash flow problem because you don’t have the cash to pay for the adoption. Waiting to get a return is not always necessary. You can get the money up front to use toward the adoption.
You now know that you get to pay fewer taxes so start having less taken out of your paycheck in the year you expect to complete the adoption. First you need to figure out how much tax you expect to owe in the year you will complete the adoption. Then work with HR or a tax professional to determine how much tax to take out of your paycheck to meet your new lower tax liability. Take the money that you’re saving in taxes each month and apply it toward your adoption expenses.
Your personal situation (adoption timing and income level) can greatly impact the usefulness of this strategy, so as with any tax strategy, you want to know what you’re doing. I’m happy to talk with anyone wanting more information.
Example # 1: (No Employer Contribution)
Sammy and Dora expect to complete an adoption in 2007 and they will have taxable income of $100,000. As such, they had planned to pay taxes of about $18,000 and were having $1,500/mo taken out of their paychecks. Now they know that they will get the tax benefits highlighted above and their tax liability will go down by almost $13,500 to only $4,500. As such, they should have no more than $375/mo taken out of their paychecks. This will save them $1,125/mo that they can use toward the adoption. If they needed to be even more aggressive, they could reduce their tax withholding to zero until completion of the adoption and then pay enough to ensure that they pay in $4,500 by year-end; however, this can be a bit more risky.
Example #2: (Employer Contribution)
The scenario is the same as in example #1 except that Sammy’s employer offers adoption reimbursement of $3,000. They can actually use this reimbursement to reduce the amount of tax withholding they take out also. Sammy and Dora will still owe $4,500; however, they can use the employer reimbursement to pay for $3,000 of that tax liability. Now they can pay $3,000 of their taxes when they receive the employer reimbursement and pay the remaining $1,500 of taxes through payroll deduction. This means that they will need to only take $125/mo toward taxes out of their paychecks – saving an additional $250/mo for a total of $1,375/mo that they can apply toward the adoption costs.
Example #3: (Adoption Completes in 2008)
The scenario is the same as in example #1 except that the adoption isn’t expected to complete until next year. Sammy and Dora should not adjust their taxes for 2007 as they will not receive any of the tax benefits or employer reimbursement in this year. Instead, they should plan to employ their strategy next year when the adoption is expected to complete.
On a side note, if you expect your adoption to complete at the very end of this year and there is possibility of it extending into the next year, you will need a contingency plan. Since, you only receive the benefits in the year that you complete the adoption, you may want to consider paying in taxes monthly or arrange to borrow money, if needed, at year-end to pay taxes if the adoption does not complete in time. You will be able to use your tax benefits in the next year to pay back your debt.
Example #4: (Lower Income Scenario)
This scenario is the same as Example 2; however, Dora decided to leave her job this year and made no income leaving only Sammy’s taxable income of $50,000. Their expected tax liability has now dropped to $6,750. They still expect to receive tax benefits this year in the amount of $13,500 and employer benefits of $3,000; however, that is significantly more than the taxes they expected to pay. Unfortunately for them, the government will not allow you to take more of the tax credit than you owed in taxes this year. Any amount that they don’t get to take this year can be taken in future years though.
As such, this year they will only receive the total employer benefit ($3,000) and tax benefits equal to $6,750 plus the child tax credits ($1,000). They were planning to withhold taxes from their paycheck of appx. $550/mo; however, they now know that they will receive the tax benefits above. In this case, they should reduce their payroll tax deduction to zero saving $550/mo. that they can apply toward adoption expenses. Because they only received $7,750 of tax benefit in this year, they will have lower taxes next year (2008) also by $5,750 (total benefits of $13,500 less amount received in 2007 of $7,750).
Example #5: (High Income Scenario)
If Sammy and Dora make significant income (as deemed by the IRS), they may receive reduced tax benefits from the tax credits and the personal exemption, which “phase out” at higher income levels. However, they would still benefit from the charitable deduction and employer reimbursement. They should meet with a tax professional to best understand the amount of benefit they should expect to receive.
Example #6: (Lower Adoption Costs)
Let's assume the same situation as scenario #2; however, Sammy and Dora's adoption costs total only $8,000. In this case, Sammy and Dora would receive the child tax credit ($1,000), additional personal exemption ($825), charitable deduction ($500), the employer reimbursement ($3,000); however, they would only receive the Adoption Tax Credit in the amount of the total adoption cost ($8,000) less any employer contribution ($3,000). In this case, Sammy and Dora would receive $5,000 of the available $10,960 adoption tax credit. Yes, Sammy and Dora would actually come out ahead by $2,325 (total benefits of $10,325 less the adoption cost $8,000). Of course, we know that this will quickly be consumed by food, diapers, toys, clothes, etc., but it still helps.
Example #7: (Adoption of Domestic Special Needs Child)
If in example #6, the child that Sammy and Dora is adopting domestic and deemed to have special needs, then they are entitled to the entire adoption tax credit of $10,960 even though their adoption costs are lower. This would provide Sammy and Dora an additional $5,960 compared to Example #6.
The definition of special needs is determined by the child's state; however, the definition considers the child's ethnicity, age, whether part of sibling group and medical needs as special needs factors.
CONCLUSION
I know this sounds fairly complex. Please feel free to ask any questions you may have or leave a comment with your e-mail address. We are happy to help in any way we can.
Russ
I know this sounds fairly complex. Please feel free to ask any questions you may have or leave a comment with your e-mail address. We are happy to help in any way we can.
Russ
Wednesday, October 8, 2008
At least I'm sorta popular
Apparently 694 people in the U.S. have the name Violet Williams
Apparently 99,238 people have the name Violet
Apparently 2, 134, 383 people have the last name Williams and apparently, it is the 3rd most common last name! Sheesh! Well, at least I get to change mine someday :)
I guess I will have to work at getting even more original names for my kids.
Apparently 99,238 people have the name Violet
Apparently 2, 134, 383 people have the last name Williams and apparently, it is the 3rd most common last name! Sheesh! Well, at least I get to change mine someday :)
I guess I will have to work at getting even more original names for my kids.
Tuesday, October 7, 2008
Pre-Term Labor
My cousin and her unborn baby Ashlynn need prayer! Quin went into pre-term labor today (about 4 weeks early). She started having contractions about 15-20 minutes apart. By the time she got to the hospital (her Dr. was in a meeting) they were 5 minutes apart! She was 1 cm. dialated. My cousin was worried because Ashlynn wasn't moving much. They gave her a shot to stop contractions. It didn't make her feel to good but, it did do it's job!
She had the same experience with her now 5 year old daughter Jaelynn. Pre-term labor started about the same time, they stopped it, and a week later Jaelynn make her debut at about 5pds.
Ashlynn needs AT LEAST another week to get bigger and stronger but, preferably another 2 or 3 weeks! And purely selfish reasons for her not coming yet, Jaelynn's birthday party is on Saturday. She just would not understand if Mommy went into labor and they had to cancel her party, OR if everyone gave all their attnetiont to the new baby. Jae so deserves her special day! Also, I'm flying down on the 21st. I wanted to be their when Ashynn came! I guess now I don't have to worry about her coming after I leave but, still!
Mostly, please pray for a HEALTHY baby and SAFE delivery when the day does come!
She had the same experience with her now 5 year old daughter Jaelynn. Pre-term labor started about the same time, they stopped it, and a week later Jaelynn make her debut at about 5pds.
Ashlynn needs AT LEAST another week to get bigger and stronger but, preferably another 2 or 3 weeks! And purely selfish reasons for her not coming yet, Jaelynn's birthday party is on Saturday. She just would not understand if Mommy went into labor and they had to cancel her party, OR if everyone gave all their attnetiont to the new baby. Jae so deserves her special day! Also, I'm flying down on the 21st. I wanted to be their when Ashynn came! I guess now I don't have to worry about her coming after I leave but, still!
Mostly, please pray for a HEALTHY baby and SAFE delivery when the day does come!
Cheaper by the dozen
I just read this AMAZING story at this blog : http://thevoiceofadventure.blospot.com
This woman is hosting a virtual baby shower for her friends. The family she is throwing the baby shower has 4 biological children, 3 adopted children and was just selected to be the adoptive parents of a sibling group of 5 kids!!! That's right, 5. The ages, 5, 4, 3, 2 and 1 year old! They will now have a total of 12 children. This means, 5 more beds, 5 more car seats, 5 more sets of clothing, etc. etc. etc. So, if you have it impressed on your heart, go to the above blog, and use the pay pal account to donate some $$ to this amazing family who is following Gods call to help more children! If you can help financially, PRAY! The will need provision, patience, strength and more as they adjust to being a family of 9, to a family of 14!
This woman is hosting a virtual baby shower for her friends. The family she is throwing the baby shower has 4 biological children, 3 adopted children and was just selected to be the adoptive parents of a sibling group of 5 kids!!! That's right, 5. The ages, 5, 4, 3, 2 and 1 year old! They will now have a total of 12 children. This means, 5 more beds, 5 more car seats, 5 more sets of clothing, etc. etc. etc. So, if you have it impressed on your heart, go to the above blog, and use the pay pal account to donate some $$ to this amazing family who is following Gods call to help more children! If you can help financially, PRAY! The will need provision, patience, strength and more as they adjust to being a family of 9, to a family of 14!
Thursday, October 2, 2008
FFF # 19: Summer in Review!
First: I have to share this picture of my newest Cousin! Born Tuesday Sept. 23rd: Joshua Blair
Then, My nephews newest hair cut! His first "big boy" hair cut!
Now: My summer consisted of:
Water Gun Fights!!!
Getting my Mom a new puppy!
Naked pool play (well, for the babies anyway! I assure you I had a swimming suit on!)
Picking raspberries (Yes, show only picks the red ones....seriously!)
BIKE RIDES!
Climbing trees!
Trips to the lake!
Annual family reunion camping trip: giving ZAckery his 1st roasted marshmallow, a BIG hit!
My first horse back ride, with my good friend Catherine!
A totaled car (Thanks little Bro!) Lol. Everyone is ok!
Welcoming baby Brooklynn! Her Mommy was the first of my childhood friends to get married AND have a baby.
Taking Zackery swimming for the first time, and many more times!
Breaking my toe!
Making Silly Memories with my best friend on 4th of July :)
MANY trip to the duck pond with Caleb, who LOVES them.
Seeing my little buddy publicly announce His Love for Jesus! I'm SO proud of you Josh!
Seeing my best friends little brother get MARRIED! Here are 4 of his little sister, who were flower girls (I did all their hair!)
Enjoying the butterfly exhibit at the zoo.
LOTS of popsicles with the boys
Of course, the Slip N' Slide (and yes, I did it too!)
Then, My nephews newest hair cut! His first "big boy" hair cut!
Now: My summer consisted of:
Water Gun Fights!!!
Getting my Mom a new puppy!
Naked pool play (well, for the babies anyway! I assure you I had a swimming suit on!)
Picking raspberries (Yes, show only picks the red ones....seriously!)
BIKE RIDES!
Climbing trees!
Trips to the lake!
Annual family reunion camping trip: giving ZAckery his 1st roasted marshmallow, a BIG hit!
My first horse back ride, with my good friend Catherine!
A totaled car (Thanks little Bro!) Lol. Everyone is ok!
Welcoming baby Brooklynn! Her Mommy was the first of my childhood friends to get married AND have a baby.
Taking Zackery swimming for the first time, and many more times!
Breaking my toe!
Making Silly Memories with my best friend on 4th of July :)
MANY trip to the duck pond with Caleb, who LOVES them.
Seeing my little buddy publicly announce His Love for Jesus! I'm SO proud of you Josh!
Seeing my best friends little brother get MARRIED! Here are 4 of his little sister, who were flower girls (I did all their hair!)
Enjoying the butterfly exhibit at the zoo.
LOTS of popsicles with the boys
Of course, the Slip N' Slide (and yes, I did it too!)
Wednesday, October 1, 2008
Zackery's big boy hair cut!
My nephew was born with a head full of dark brown (almost black ) hair. My sister was the same way wen she was born so it was no surprise (although his GIANT blue eyes that never changed were!). To date, he has had 3 trims. After being told he was very pretty, and him being called a princess (more then once) My sister relented and told my Mom she could get it done. This is what it looked like just a week ago:
And here is the little Monkey himself as of yesterday afternoon! I went with my Mom and we got it cut!
Doesn't he look SO grown up! Oh my goodness! How did that happen. I swear he was just a wee little 6pd baby making little monkey noises in his sleep YESTERDAY!
He is also making a lot of progress developmentally. He army crawls, gets on his hands and knees and rocks back and forth, pulls up to things, and he knows how to get what he wants, he gruns "Ah". If he wants your attention he says Ah, he want something you have he grunts "Ah", and if you give him a taste of your food/drink and he wants more, he says "Ah".
He loves music and dancing. He shakes his little head in a "no" fashion, or bounces his torso up and down, it's too cute! He also enjoys playing "Peek - A - Boo". The other day my Dad was hiding behind different things and popping back out. Later that day my nephew was in his car seat and my Dad walked up to the van. My nephew turned his head to the side for a second and quickly turned it back! He was trying to get my Dad to play the game with him! When my Dad started playing again, Zack started Laughing! I also not him how to "deflate" my cheeks when I puff them up like a monkey. He finds this hilarious. I love this little boy so much!
And here is the little Monkey himself as of yesterday afternoon! I went with my Mom and we got it cut!
Doesn't he look SO grown up! Oh my goodness! How did that happen. I swear he was just a wee little 6pd baby making little monkey noises in his sleep YESTERDAY!He is also making a lot of progress developmentally. He army crawls, gets on his hands and knees and rocks back and forth, pulls up to things, and he knows how to get what he wants, he gruns "Ah". If he wants your attention he says Ah, he want something you have he grunts "Ah", and if you give him a taste of your food/drink and he wants more, he says "Ah".
He loves music and dancing. He shakes his little head in a "no" fashion, or bounces his torso up and down, it's too cute! He also enjoys playing "Peek - A - Boo". The other day my Dad was hiding behind different things and popping back out. Later that day my nephew was in his car seat and my Dad walked up to the van. My nephew turned his head to the side for a second and quickly turned it back! He was trying to get my Dad to play the game with him! When my Dad started playing again, Zack started Laughing! I also not him how to "deflate" my cheeks when I puff them up like a monkey. He finds this hilarious. I love this little boy so much!
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