FAQ

Real-Estate Investor

The recent downturn in the US economy turned American real estate into a more attractive investment than ever. Thus, many Israelis, individually or through investment funds, have entered into this market in the US.
As always, the virtually assured partner of any entrepreneur or investor in the profits of this income from real estate is the American government. Thus, it is very important to do tax planning for real estate investments.
The same applies to the obligation to report, whether on the part of a private investor, the entrepreneur, the investment fund, or Israeli companies. Everyone involved in real estate investments in the US is subject to the same set of reporting principles.
If you invest in US real estate, it is important that you recognize the ramifications of these holdings, and that you file the necessary statements on time.

Generally, yes. It depends on the various tax rates.

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service(IRS).

American Citizen/GreenCard Holder

In 2011, the US Congress passed the FATCA Bill, requiring all foreign banks that do business with the US to report on American citizens who have accounts with them.
Israeli banks have taken several steps to determine the citizenship of their account holders, and they are required to report to the US on these citizens.
If you were asked to sign forms, it means they are trying to determine whether you are an American citizen who must report to the American Tax Authorities (IRS).

In 2011, the US Congress passed the FATCA Bill, requiring all foreign banks that do business with the US to report on American citizens who have accounts with them.
Israeli banks have taken several steps to determine the citizenship of their account holders, and they are required to report to the US on these citizens.
If you were asked to sign forms, it means they are trying to determine whether you are an American citizen who must report to the American Tax Authorities (IRS).

Generally, yes. It depends on the various tax rates.

You are not in compliance with US law and you need to file.  That being said, there are several options and plans for those who have not yet reported and want to make up their obligations. To choose the proper course of action for you, with the goal of minimizing penalties and fines, please contact us.

If the sum of the highest balances of all of your financial accounts (banks, pensions, investment portfolios, etc.) outside the US exceeded $10,000 during the course of the previous year, you must report them by June 30.

No! The treaty does not exempt you from reporting. The requirement to file annual reports remains even if it does not result in payment. Therefore, preparation and advance tax planning, while getting professional advice, will lead to maximum tax savings.
In 1975, a treaty to prevent double taxation and to prevent tax evasion took effect with respect to income tax between Israel and the US. US citizens, even if they do not live in the US, must report their incomes from outside the US to the American tax authorities. These incomes are often exempt from US tax. Residents of Israel who are exempt from US tax with regard to certain income generally are required to pay Israeli tax on that income.

Yes. Citizens, residents, and those with the status of permanent residents (green card holders) in the US all must report their income.

Yes there are many individual expenses that are not recognized in Israel that are deductible for US tax purposes. When we prepare a return, we determine the best way to calculate your tax looking at all of the information that you provide and then by asking the right questions. It is our job to make sure that you pay only what you are required by law to pay and not a penny more. Selecting the expenses and requesting the refund are part of the process our clients’ undergo.

In principle, a US resident can obtain a credit offsetting the US tax obligations for taxes paid on income outside the US in the country where the income was generated. However, the rules for calculating the credit are sometimes complicated and do not always result in a complete offset of the US taxes. Similarly, the fact that tax was withheld at source in another country does not necessarily ensure that the foreign tax is eligible to be deducted.

No! The American taxation system includes citizens and residents, regardless of where they live or work. If you have American citizenship, or if you have a green card, you must file annual returns.

Yes. As a resident of the US, you are required to report your income from all over the world, wherever it is. For example, if you own an apartment in Israel, and you rent out the apartment, income from the rental must be included in the annual US tax return. So too if you have interest income, dividends, or capital gains from Israeli banks.

In principle, yes. If you meet the specific conditions to receive the refund. We emphasize that the IRS is closely examining returns from Israel claiming the child tax credit.  However, if you are entitled to the credit and we collect all of the proper documentation for our file, there is no reason not to request the refund.  You are entitled to it like any other US citizen.

Yes. All American citizens must file an American tax return annually, which includes income from all over the world. In a case where an American citizen paid taxes to another tax authority, he may, under certain conditions, request a tax credit for taxes paid.