The American Tax Authority is one of the strongest and most intimidating bodies in the USA. However, it is not widely known that aside the filing requirement and income tax payment, many times, it is possible to also receive tax refund, which can reach especially high amount. So, if you have asked yourselves about what you can receive a tax refund about and how you can get it, here is all the important information regarding tax refund in the USA for Israeli citizens.
What is Tax Refund in the USA?
Tax payment constitutes a main income layer for many countries including the USA. The latter applies an especially wide filing requirement, which does not distinguish American citizens from permanent residents, while not reporting may lead to various sanctions and punishments. Yet, beside the unique taxation method and the various tax rates, there are also cases in which one can receive tax refund in the USA.
The principle of tax refund in the USA is similar in its essence to the principle of tax refund in Israel when it describes a situation in which the taxpayer paid more tax than he or she is obliged in practice. In such situations we would expect the tax authority to refund the overcharged tax automatically, but even in the case of tax refund in the USA one must apply for a tax refund in accordance. It is recommended to send the request using a profession and experienced company in the field –MasAmerica.
As a rule, the tax refund in the USA can be divided into two major components:
- Tax allowance – describe a situation of tax liability reduction directly (a dollar for dollar)
- Tax deduction – describe a situation of reducing the taxable income.
Conditions of Entitlement for Tax Refund for Israeli Citizens
Whether you are an Israeli citizen owning an additional American citizenship / Green Card or an Israeli who chose the real estate investments channel, the conditions of entitlement for tax refund in the USA are very wide and can reach most significant amounts. Among the main conditions of entitlement, the following can be found:
Tax Refunds for Parents of Children
Being a parent of children is a job of itself and to encourage parents for children under 17 to go into the job market the US government bestows wide tax breaks for parents. These benefits can rise to an amount of $1000 a year.
Tax Refunds for Students
Tax refunds constitute an efficient and useful tool for encouraging and motivating various populations. To encourage citizens to receive higher education, the US government bestows tax benefits for students for the first four years of the studies in amounts of $1000 to $2500. Israeli students who attend Higher Education institutes such as Tel Aviv University, Ben Gurion University, The Technion etc.
Tax Refunds for Salaried Employees and Self-Employed Employees
Salaried employees for whom higher tax rates than their tax liability in practice were deducted, will be entitled for tax refund accordingly. As their employers are responsible for the tax deduction, it is recommended for each employee to personally submit an annual tax report file and examine his or her entitlement for tax refund.
Self-employed employees can also receive tax refund in the USA for cases in which they have paid more tax than they should have as well as a part of deductible expenses offset (transportation, studying, marketing etc.).
Tax Refunds for Donations
Donations for acknowledged charity organisations can also make you entitled for tax refunds. These refunds may reach $300 for singles or $600 for married couples.
Tax Refunds for Special Situations
Additional situations in which it is possible to check your entitlement for tax refunds in the USA are special family statues such as minimum wage, being homeless, child support etc.
Tax Refund Without Paying Taxes – It is Worthwhile Knowing
Our common sense leads us to thing that receiving tax refund is reserved to those who paid more tax than needed in practice. Nevertheless, the unique American taxation system enables receiving tax refunds in the USA even if you did not have to pay income tax at a specific year. This tax refund is also known as credit, and it is paid by a cheque received from the American tax Authority (IRS).
How can Israeli Citizens Receive Tax Refund in the USA?
According to the American tax law, any person holding an American citizenship / Green Card, is obliged in submitting appropriate tax reports in the USA annually. To this reporting files, it is possible to add a request for tax refund in the USA for one or more of the above-mentioned reasons.
The tax refund request will be examined by the IRS according to the existing information about the taxpayer in their files. If you are entitled for a tax refund, you will get it directly to you bank account of by a cheque in the case of credit (a tax refund when no tax was paid).
Tax Refunds in the USA – Statute of Limitations
Tax refunds can reach significant amounts and yet many people do not operate to receive their deserved tax refunds. It is important to know that submitting tax refund requests has a statute of limitations of:
- Three years from the date of submitting the annual report.
- Two years from the date of paying the tax in practice for which the refund is requested.
What is the Recommended Way of Receiving a Tax Refund in the USA?
It is possible to understand that Israeli citizens who are holders of an American citizenship / Green Card are entitled to receiving a tax refund in the USA, even if they do not live in the USA nor paid a single dollar to the IRS.
To thoroughly examine your mode of entitlement and the exact amount of refund you could receive, it is recommended to turn to an experience and professional accountants’ office in the field of taxation in general and taxation in the USA in particular. Doing so, would shorten and make the process significantly more efficient.
Having many years of experience in the field, we would like to give you a comprehensive and professional service that could be worth a lot of money for you. Contact us.
Frequently Asked Questions Regarding Tax Refund in the USA for Israeli Citizens
The IRS may be one of the most powerful and intimidating in the USA, but there are cases in which apart from tax liability payment, the tax authority should refund us the tax due to tax allowances or tax deductions. These refunds may reach considerable amounts even for Israeli citizens holding an American citizenship / Green Card.
The conditions of entitlement are very wide and suit various populations – salaried employees, self employed employees, students, bachelors, married couples etc. Among the most common cases for which a tax refund can be requested are tax refunds for parents of children, tax refunds for donations, tax refunds for special family situations etc.
The unique American taxation system enables receiving tax refund without dependence on your tax liability at the same year. This means that even you did not pay a single dollar to the IRS you may certainly be entitled for tax refund.
The recommended way to receive a tax refund in the USA, both by making the process more efficient and the results, is to get the assistance of a professional and experienced accountants’ office in the filed of taxation and particularly in American taxation. This will enable you to receive the whole refunds you are entitled to.
