US - Israeli taxation
The US Taxation Department provides a comprehensive solution for all taxation issues and challenges faced by individuals and companies. Our experts are familiar with the tax systems in Israel and in the USA, as well as with the tax treaty between the two countries. They make sure to keep abreast of any change or revision to either tax law. The department is unique in providing a comprehensive tax solution, taking into account the integration of both tax systems and the laws on the US side and on the Israeli side together. The in-depth knowledge of our experts of tax laws in both countries allows us to successfully create for our clients a comprehensive taxation and accounting infrastructure for their operations in both locations, which provides smart solutions that save our clients’ money and avoids their exposure to double taxation.
Service for individuals
Individual taxation: Immigrants, returning residents, foreign residents, relocation
- Creating a detailed tax plan, including filing reports in conformity with the most recent updates to the law and to the US-Israel tax treaty, including filing of FBAR and FATCA reports
- Assistance, consulting and training provided to the client on issues of taxation and conduct vis-à-vis the authorities, arising from their new status and new life, to maximize their rights and to minimize their obligations.
- Planning for severance pay and calculation of National Insurance pensions
- Review of eligibility for voluntary disclosure of foreign income and filing such returns
You have made the decision to take a big step and to relocate your life to a new place. In order to successfully go through with this process, one should carefully consider the taxation aspect and its financial implications. Our firm helps many immigrants in various stages of the immigration process and in different conditions for such immigration (youngsters, retirees, immigrants intending to continue working overseas, or those who chose to start working in Israel), as well as Israelis who relocate for an employment opportunity. We create for them the best taxation plan which not only saves them money, but also avoids unnecessary bureaucratic dealings, providing them with a safety net and financial understanding of their new situation.
It is important to take several things into account:
National Insurance – Many of those relocating to Israel or to the USA are still liable for double tax payment for National Insurance (Social Security). In particular, this applies to the self-employed and to employees paid using Form 1099. This responsibility, in Israel and in the USA, affects how pensions are calculated upon retirement. This may be highly complex, due to changing parameters. Our experts are committed to finding solutions that not only save you money, but also safeguard your maximum rights and benefits, in as much as possible, from your country of origin and your new country.
Second generation – Many US citizens are unaware that their children are also required to file tax returns in the USA, even if they were born in Israel and have no intention of living in the USA; in such cases, our firm assists the second generation.
Tax refunds for children
Completing and filing the annual tax return of the parent, claiming the maximum tax refund from the IRS, based on the income of the parent, for each child who is a US citizen or a resident under 17 years of age.
Foreign account reporting – FBAR and FATCA
- Completing and filing FBAR and FATCA reports optimally, as required by the US Foreign Account Tax Compliance Act.
Our experts are familiar with filing these tax returns, reviewing all parameters based on the cumulative amount for all of your holdings, and understand the importance of filing these returns on time, in order to avoid penalties.
FBAR is a form that any US citizen or Green Card holder who has a cumulative total of $10,000 or more at any time during the tax year, or equivalent in foreign currency. They are required by law to file this report annually.
FATCA applies to individuals, married or single, who exceed the threshold. The exact threshold amount is determined based on the taxpayers’ place of residence.
Voluntary disclosure(late filing of reports)
- Filing a report with tax authorities of un-declared non US capital, reducing or eliminating penalties and avoiding criminal indictment.
All US citizens who exceed the threshold are required to file; if you have not done so in the past, we are here to help you to file the reports appropriately. We quickly and diligently verify your eligibility to file, eliminating or reducing the tax liability and avoiding criminal indictment.
- Consulting for individuals resident in Israel planning to relocate to another country.
Consulting and planning, including review of residency status and date of termination of being resident in Israel, providing advice upon relocation to overseas, preparing tax reviews of the resident status of individuals for tax purposes and consulting for foreign residents employed in Israel.
Renouncing your citizenship
- Assistance in the process of renouncing your US citizenship including planning and filing of the final tax return.
If you choose to renounce your citizenship in the US, you should carefully prepare for your final tax return, including gathering the necessary documents. In order to properly go through this process, avoiding extraneous tax liability, we recommend that you plan the process with our experts well in advance.
Green Card holders
- Filing tax returns – in-depth knowledge of tax laws for Green Card holders
- Assistance in the process of renouncing / expiration of the Green Card and the taxation implications thereof
Green Card holders, whether resident in the US, in Israel or elsewhere, are required by law to file their returns with the authorities. This mandatory tax reporting poses numerous challenges, since the laws applicable in this case are complex. Our experts are well versed in the minute details and can help save our clients significant amounts.
Realestate investments in the USA
- Consulting and preparation of comprehensive, efficient tax plan to reduce tax liability
- Filing federal and state tax returns.
In recent years, the USA has become a popular destination for investments by many Israeli residents, including those also holding a US citizenship. As a business opportunity, it is important to take into account from the outset of this process the tax liability and the requirements of the investor to file state and federal tax returns. For non US citizens who invest in excess of $60,000, there are legal issues to be considered aside from the taxation aspect. Our firm has the knowledge and experience required to put in place a comprehensive tax plan, taking into account all of the parameters and reducing the cost to the client.
Service for companies
Consulting for companies and partnerships
- Creating a comprehensive tax plan, taking into account all parameters in Israel and in the USA. Including reporting in both countries, based on the local and foreign income tax rates, in conformity with rules for controlled foreign corporations (CFC).
- Review of the corporate tax liability, in terms of federal and state tax, and review of eligibility for various credits
- Handling and review of transfer pricing between the parent company and the new subsidiary company, in consultation with relevant experts in this field, in Israel and in the USA.
- Creating a clear tax plan, to avoid complications with tax authorities and criminal issues.
Congratulations, you have made a decision to open a branch of an Israeli company overseas, or to open a branch of a multi-national company in Israel. What next? Doing business in another country is a highly complex proposition in terms of taxation. In order to successfully realize your gain / returns, you should carefully put together a tax plan, taking into account many factors and variables, such as: What about transfer pricing for the company? How to handle tax withholding? What are the implications of hiring employees in the other country, including payroll and benefits.