Last Updated 2 weeks ago

If you are a U.S. citizen or resident living in Israel, moving abroad doesn’t usually end your U.S. tax filing obligations. Filing Form 1040 in Israel is how you report your worldwide income to the IRS, even if you earn the majority of that income in Israel. 

That does not mean you will necessarily pay tax twice. Foreign tax credits, exclusions, and the US-Israel Tax Treaty may affect the result. First, you need to know whether you must file.

Key Takeaways

• Form 1040 is the main U.S. individual income tax return, and U.S. citizens living in Israel generally follow the same federal filing rules as Americans in the United States.
• Paying Israeli tax does not, by itself, remove a U.S. filing requirement. U.S. citizens generally report worldwide income.
• Americans abroad who meet the IRS conditions can receive an automatic two-month filing extension, usually to June 15 for calendar-year filers. 
• New Olim and U.S. citizens married to non-U.S. citizens may face additional filing decisions.

What Is Form 1040?

Form 1040, U.S. Individual Income Tax Return, is the standard federal income tax return used by U.S. individuals. The 1040 tax form brings together income, deductions, credits, taxes, and payments to determine whether you owe tax or qualify for a refund.

Depending on your finances, you may need additional schedules or forms. For example, Form 1040 Schedule 1 is used for certain additional income and adjustments to income. Separate reporting can also be triggered by:

• Rental income
• Investments
• Self-employment
• Foreign financial assets
• Foreign taxes 

Amounts received in shekels generally need to be translated into U.S. dollars on a U.S. return.

Who Is Form 1040 For?

In most cases, a U.S. citizen remains subject to U.S. federal filing rules regardless of where they live. An American with Israeli salary, business income, investments, or income from both countries may still need to file Form 1040.

The filing requirement depends on gross income, filing status, age, and whether someone can claim you as a dependent. Special rules also apply in certain situations, including self-employment.

Depending on the facts, separate reporting such as FBAR or Form 8938 may also apply.

Do You Need to Submit Form 1040 Even If There Is No Tax Liability?

Yes, you may have to file even if your final U.S. tax liability is zero.

Paying tax in Israel does not automatically remove the U.S. filing obligation. A taxpayer may reduce U.S. tax through a foreign tax credit, the Foreign Earned Income Exclusion, or another provision, but those benefits often have to be claimed on a filed return.

The US-Israel Tax Treaty can affect how certain income is treated. It is not a blanket exemption from filing Form 1040 for U.S. citizens living in Israel.

Who Does Not Have to File Form 1040?

Not every U.S. citizen has to file every year. For most taxpayers, the IRS sets annual filing thresholds based on filing status, age, and gross income. Those amounts change over time.

For example, for 2025 returns, a single taxpayer under 65 generally had a filing threshold of $15,750, while married taxpayers filing jointly who were both under 65 generally had a threshold of $31,500. These are examples, not permanent thresholds.

A return can still be required below the general threshold. Self-employment is one common example. Check the rules for the specific tax year rather than assuming that low income or no tax due means no return is required.

How New Olim File Form 1040 During the First Year in Israel

Making aliyah does not split the U.S. tax year into a “before Israel” and “after Israel” return. A U.S. citizen generally reports worldwide income for the full calendar year on Form 1040, including income received before and after the move.

The first year can be more complicated. You may have:

• U.S. wages from before the move
• Israeli salary afterwards
• New bank accounts

There may also be questions about foreign tax credits and the Foreign Earned Income Exclusion. Someone planning to claim the exclusion may need to consider whether they have met the relevant residence or physical-presence test by the filing deadline.

Israeli tax benefits available to some new Olim are separate from the U.S. rules and do not automatically change U.S. reporting. Our guide to filing American income tax as a U.S. expat in Israel explains more.

Form 1040 for U.S. Citizens Married to Non-U.S. Citizens

Marriage to a non-U.S. citizen can change how you complete the 1040 form, but it does not create one automatic filing choice.

In some cases, the U.S. citizen files separately from a spouse treated as a nonresident alien for U.S. tax purposes. In others, a couple may elect to treat the nonresident spouse as a U.S. resident for income tax purposes and file jointly. That election can bring the spouse’s worldwide income into the U.S. tax system.

Because the better filing position depends on income, residency, assets, and other facts, the consequences should be reviewed before an election is made.

Filing Form 1040 with Professional Assistance

Cross-border returns can look straightforward until such factors as Israeli salary, investments, or a non-U.S. spouse enter the picture. The challenge is making sure you don’t miss related reporting.

Taxpayers abroad who qualify for the IRS automatic two-month extension generally have until June 15 to file a calendar-year return. Additional time to file may be available, but an extension to file does not necessarily stop interest from accruing on unpaid tax from the regular due date.

If you are filing Form 1040 in Israel and are unsure how your Israeli income, taxes, accounts, or family situation should be reported, Philip Stein & Associates can help. Reach out to schedule a consultation today.