Finances and taxes and escrow, oh my! Not everyone’s favorite topic. But when it comes to modern family building, the financial aspect is a subject that can’t be avoided. With tens of thousands of dollars exchanging hands over the course of just a few months, it’s critical you understand exactly how your money is being managed, whether as an intended parent who is paying these funds, or as a gestational surrogate or egg donor receiving compensation.
In modern family building, it takes a village to start a family. An experienced and specialized escrow manager is the CFO of your journey, ensuring your funds are managed appropriately, reimbursements are paid on time and to the correct individuals, clarifying contract intricacies, and you stay on budget throughout this process. Money has a funny way of becoming emotional – even the most business-minded individuals can’t help but get sucked in. We are talking about creating a human life, after all. Using a non-biased third party to manage the process will save everyone time, energy, and potential emotional strife in the long run.
Beyond escrow, there are other financial questions that are frequently asked in third-party reproduction. A major topic? Taxes. From an intended parents’ perspective, what surrogacy or egg and embryo donation expenses are tax deductible? And for gestational surrogates and egg donors, do I need to claim my compensation as income on my taxes?
In this week’s episode, Eloise sits down with CPA and owner of Ally Escrow Management, Sonia Stewart, who specializes in the financial aspect of third-party reproduction. With more than 20 years of financial experience, Sonia has seen it all, and she’s more than happy to share her knowledge with you to ensure you are prepared and ready to start your journey on the right financial footing.
Here’s a sneak peek at the episode:
• (04:47) Don’t try to manage the finances of surrogacy and egg donation on your own – here’s why
• (07:48) Learn the ins and outs of an escrow account and how it actually works
• (11:04) Tips for choosing the right escrow company for your journey
• (13:57) What happens if a financial dispute arises between intended parents and a gestational carrier?
• (16:27) Let’s talk taxes. Real advice from a CPA who specializes in third-party reproduction. What surrogacy or egg donation related expenses are tax deductible?
• (17:15) Determining what is the “medical need” for the cost you are trying to deduct, and how this affects same-sex couples
• (18:37) How a Private Letter Ruling (or PLR) could help you deduct additional expenses, and how long does it take for a decision to be issued?
• (20:42) Can intended parents pay expenses out of an HSA (Health Savings Account)?
• (21:29) Receiving money from friends and family to fund your surrogacy or egg donation journey? You’ll want to listen to this…
• (23:40) Egg donors need to claim their compensation on annual taxes, whether you receive a 1099 or not.
• (25:08) A gestational carrier’s contract will determine if she’ll need to claim her compensation on her taxes – learn the buzz words to include!