Truth 18. Adoption assistance
Did you add to your growing family via adoption? Then your Uncle Sam wants to help defray some of your costs.
A tax credit is available for qualifying adoption expenses. A credit is more valuable than a tax break. Whereas a deduction reduces your taxable income before you figure your tax, a credit reduces your actual tax due amount. If you are in the 25 percent tax bracket, a $1,000 deduction would produce a tax benefit of $250, but a credit of $1,000 produces a tax benefit of $1,000. Thus, depending upon how much you owe, a credit could zero out your tax bill.
In addition to the adoption tax credit, you may be able to exclude from your income certain expenses that were reimbursed to you by your employer. ...
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