An American accountant also referred to as a CPA, mediates between citizens who hold a green card and the complex tax system. The United States Tax Authority, or the IRS, imposes substantial fines for inaccuracies or late reporting.
Also, the IRS system requires any citizen who holds a green card to pay tax. Regardless of whether he lives within or outside the United States.
What are the qualifications of an American accountant?
A CPA or “certified public accountant” is a degree obtained in any of the states of the United States. Any person holding this degree can work in his country as a certified public accountant.
Form 1040
Form 1040 is a report detailing the revenues of those committed to reporting to the IRS authorities in the past year.
The following table shows those who are committed to submitting the report.
| Family status | Annual cumulative revenue that exceeds | Age at the end of the new year |
| Single | 12200$ | Under 65 |
| Single | 13850$ | Over 65 |
| Married and filing the report together | 24400$ | The couple is under the age of 65 |
| Married and filing the report together | 25700$ | One of the parties is over the age of 65 |
| Married and filing the report together | 27000$ | Both sides are over the age of 65. |
| Main breadwinner | 18350$ | Under the age of65 |
| Main breadwinner | 20000$ | Over the age of 65 |
Areas in which an American accountant can provide assistance
Establishing an enterprise and managing activity
Together with his clients, an American accountant drafts government documents covering the chosen entity for managing financial activity (corporation, partnership, and so on), and the optimal structure for establishing such an entity in terms of how to plan and pay tax.
U.S. Taxation and Ongoing Management
Strict enforcement and a large number of regulations can make dealing with U.S. tax authorities quite stressful.
An American accountant can assist in filing all necessary forms including:
Form 1040
Filling out Form 1040 to report revenue to the IRS.
Form NR1040
If a person is a resident of a foreign country, they must fill out an NR1040 form detailing their business activities in the U.S. and their revenues. In this form, all types of income within the state are listed.
Capital compensation
Capital compensation may be eligible for priority in tax treatment if it is structured correctly. Filling out the form in an inappropriate manner can result in penalties. We recommend creating the right structure of capital compensation with the help of an American accountant that is aware of all the tax processes that are involved.
Taxation of Corporate Transactions in the United States
The American dream has become an aspiration shared by many Israeli business owners, due to the extent amounts of the business opportunities that can be found in the United States. To make this dream come true in the U.S., it is worth considering using the services of an American accountant that will help one preserve his own peace of mind.
An American accountant will create a safe and professional tax plan while taking into consideration that the nature and type of the corporation will affect the nature of the tax and how it is reported.
In other words, a U.S. accountant provides consulting services on the impact of the company’s structure on tax, reviewing employment documents, and negotiating with the authorities.
Other factors affecting tax planning
Another factor that may affect tax planning is the location of the corporation. Every U.S. state has other tax obligations. Some states do not require tax payment while others might require corporate tax only after the corporation has crossed a certain amount of income.
It is very important to comply with the reporting obligation in accordance with the specific type of incorporation. Failure to comply with this obligation may lead the tax authorities to impose severe sanctions.
Profits from collaborations with foreign corporations
In recent years some business owners do not transfer their profits to the United States in order to avoid the obligations placed by the U.S tax authorities. In addition, many companies are operated through foreign corporations that are not obligated to report tax because they are not financial entities within the U.S. borders.
In 2018, new tax regulations were created regarding foreign corporations that require appropriate reporting to the authorities and the prevention of sanctions for under-reporting. These regulations are called the FATCA Act, which requires financial institutions around the world to report to U.S. tax authorities any financial account held outside the United States.
Negative tax results
CFC and PFIC – are two classifications of U.S. corporations. A person who holds shares in one of these corporations may get negative tax results. An American accountant can help to avoid this situation and reduce the negative tax consequences.
U.S. Real Estate Investment Taxation
The high costs in the housing market in Israel made the United States a focal point attracting many potential real estate investors from Israel.
Real estate investment in the U.S. includes a number of tax planning issues that can be addressed by an American accountant:
Federal tax, municipal tax, estate tax, etc. In all of these areas and many more American accountants have devoutly studied and specialized in.
In addition, the American accountant can choose for you between different taxation paths. For example, familiarity with the fact that the property generates income, such as a property intended for rent, allows for two taxation paths.
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U.S. tax reporting
Every year, U.S. residents must report their taxes by April 15th.
Non-U.S. residents may report by June 15th.
This should not be seen as legal advice. It is recommended to consult with Masamerica’s team before any action. The service is provided by a professional team, who speaks fluent English and Hebrew and includes lawyers and accountants with American licensees.
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