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It is unlikely that you will get receipts for all of your adoption expenses while traveling in Ukraine. I had difficulty in getting receipts for housing and driving services. And I never asked for expedite fees receipts.
Several Ukrainian service providers became worried or hostile when asked for a receipt. And yes there were times that I didn’t get a receipt.
There seemed to be two different thoughts going on. They took the request as an accusation (I was calling them a thief). Or they were concerned about being robbed. If they wrote down how much money they had, someone might see the document. Or they weren’t planning on declaring the money as income (avoiding Ukrainian taxation). They didn’t want to write down how much money they received.
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You can file taxes and use the adoption credit without receipts. But if the IRS does an audit on your tax filings, you will need proof at that point. And you will need receipts if your employer provides adoption reimbursement. And don’t forget the fifteen states that provide some type of adoption credit or tax deduction. They also need proof that money was spent on adoption related expenses.
The IRS guidance is that families can claim
reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home), and other expenses directly related to and for which the principal purpose is the legal adoption of an eligible child.
I recommend getting 3 ring binder to store paper and baggies. Write down every single penny that you spend. It cost you $30 to get copies of your birth and marriage certificates for the home study? Write it down.
I would poke holes through the baggies and put them in the 3 ring binder too. It was easy and cheap storage for all the notes and receipts.
The IRS and some employers understand that printed receipts aren’t possible sometimes. So handmade receipts and the log are vastly better then nothing.
If you use your credit card for adoption expenses, save that month’s bill. If you withdraw money from your bank account, save that receipt. When you exchange US money for Ukrainian money, keep that receipt.
If you don’t have anything in writing and you get audit, you will likely owe the IRS money. So write it down and save yourself some potential grief.
If you have a moment please write your Senator or Representative. Ask them to make the adoption tax credit permanent. It expires in 2010.
