There are two important tax breaks for adoptive parents in 2007: an exclusion of up to $11,390 ($11,650 in 2008) paid under an employee benefit plan that pays for adoption expenses, and a tax credit for up to $11,390 ($11,650 in 2008) for expenses that were not reimbursed by your employer. The $11,390 amount also applies for adoptions of children who are U.S. citizens or residents, and are determined to be special needs children by a state.

However, both tax breaks begin to be phased out for those with adjusted gross income (AGI) over $170,820 in 2007. If your AGI is $210,820 or more, you can't claim any tax benefits for adoptions.

For more information, check out the following:

• qualifying expenses for adoption benefits
• dollar limits on adoption expenses
• claiming the adoption exclusion or credit

• FREE electronic filing with paid processing.
  
  
• CompleteTax prepares both your federal and resident state returns.
  
  
• File electronically and you may qualify to use our Refund Anticipation Loan (RAL) service, which lets you get your refund FAST!
  
  
• Our useful Tax Guide provides tax tips and straightforward answers to your tax questions.
  
  
• If you owe a balance on your taxes, you can conveniently pay it by credit card. This service is available for federal taxes and certain states.
  
  
• Take advantage of FREE e-mail support, or an online chat service that gets your technical questions answered for a small fee.
  
  
• Learn how to file an Amended Return.