Financial
Quite possibly the main challenge a couple will face during the adoption process will be financial in nature. Adoption is an expensive endeavor. For many it will likely mean going into some level of debt. I want to urge you to seek advice of financial professionals. Please do not just read what is here and not look into this further. I am most certainly not a professional.
There are many financial resources on the internet today. I have found 360 Degrees of Financial Literacy to be a very informative site. The volunteers are friendly and do respond to submitted questions.
You may have heard of Dave Ramsey. He has a popular syndicated radio show based on helping people break free of their bad financial behavior. My wife and I were both laid off within two years of our marriage. We both brought debt into the picture. Our finances were not a pretty sight to behold. We needed help and needed it badly. Dave has a great way of stripping away all the baggage so many of us try and use to justify our financial behavior. His ideas work. You just need to put them into practice. I cannot urge you strongly enough to check out not only his website, but also his radio show.
The federal and many state governments offer tax credits for adoption expenses. The federal credit is somewhere between $10,400 and I just read recently $10,960. I believe states differ so you will want to check with your state. It is important to keep in mind a couple aspects of this credit. I fully support this and think it is wonderful. It surely helped out my family. But there is one catch to it that we learned the hard way. The IRS will not give you a flat $10,960 credit. They only credit the amount equal to the withholding sent in for the year. Understand you will receive the credit in its entirety, but it will be spread out over the years it takes your withholding to equal the credit amount. To simplify the math consider the tax credit to be an even $10,000. Your salary remained the same in 2007 and 2008, and you paid $5,000 in federal income taxes both years. You claimed adoption expenses beginning with your 2007 return. You will receive $5,000 credit with your 2007 taxes, and the remaining $5,000 on 2008's return. If you paid $10,000 in income taxes in 2007, then you would receive the entire credit on your 2007 return. Pretty simple and understandable why the government does this. However, I was naive and expected to get the whole credit the first year. The other aspect to this credit is how it differs for domestic and international adoption. You can claim domestic adoption expenses the year you incur them even if the adoption is not finalized during that year. However, you must wait until the year your international adoption is finalized to claim expenses.