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I am amazed as how something so seemingly simple is so complex and difficult for me to wrap my head around. I am sorry if this is a rehash from a previous ATC question, but here it goes...I'm hoping to be as clear as possible, but may fail miserably!
My husband and I spent $10,000 in agency/counseling/homestudy fees in 2011 and have an active homestudy to show for it but no match. We also have about $400 in "marketing" expenses (printing our profile, 800 phone number). All of this was incurred in 2011.
We are still waiting to be matched and I am not optimisitc we will finalize in 2012. In any event, I understand that at least the agency fees can be claimed on my 2012 taxes regardless, since they were spent in 2011. Since I will be claiming the tax for the first time, I understand I can claim $12,650. But I won't have spent that much in 2011, so will only likely claim the $10,000 (or maybe the $10,400 if marketing expenses are an acceptable expense for this puprose).
I will (have had) additional expenses in 2012, which wouldn't be eligible to report until my 2013 taxes. So here is my question....
If it's the same adoption, can I put in expenses for the remaining $2,650 in ATC that I didn't claim on my 2012 taxes if I had expenses that amount to this in subsequent years? For example, if I have legal fees this year that equal or exceed that amount, do I have any right to claim the unused portion of my 2012 ATC for them in future years? If so, which year's rules govern the limit for my expenses? The one in the first year I filed, or the one in the year I am claiming expenses for? Since the 2013 ATC is greatly reduced, it may mean nothing anyway.
Also, what does the IRS say about marketing fees...eligible for the credit or not?
Sorry if this is confusing, but thank you for your help!
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The "carryover" for additional expenses amount will depend on the year you are claiming the additional expenses not the year you started. If the ATC amount goes up, you get more back; if it goes down, you get less to claim. The tax form asks you for your total amount of new expenses you are claiming, then asks what you claimed in prior years for this adoption. The total of new expenses and prior claims is compared to the current ATC amount to determine what you get back.The marketing expenses are a legitimate expense if they are legal in your state. Keep all receipts, cancelled checks, etc. You will need to submit them.