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FAQ

What Is The Refundable Child Tax Credit?
What Is The Refundable Child Tax Credit?
As a U.S. citizen, you are obligated to file an annual tax return to the IRS regardless of your country of residence. The child tax refund is included in your annual tax return. The IRS grants refunds up to $1,400 for each child under the age of 17, determined by parental income. This credit can be claimed retroactively for up to 3 years.
My Bank/Brokerage Firm Is Requesting That I Complete A Form W-8BEN. What Is Its Purpose?
My Bank/Brokerage Firm Is Requesting That I Complete A Form W-8BEN. What Is Its Purpose?
Non-resident aliens are required to provide a U.S. identification number (ITIN) for withholding purposes on their financial investments in the U.S. You may be subject to a reduced rate of withholding depending on your country of residence. For a fill-in form, please click here. U.S. citizens should not complete the W-8BEN. They should file a Form W-9 as they are not subject to withholding.
I Am A U.S. Citizen Employed In Israel. What Are My U.S. Tax Obligations?
I Am A U.S. Citizen Employed In Israel. What Are My U.S. Tax Obligations?
In most cases, you will be required to file a tax return. However, due to the foreign earned income exclusion, you may have no tax liability.
I Am A U.S. Citizen Living Overseas, Married (With 2 Children) To A Non-U.S. Citizen. How Do I File My U.S. Tax Return?
I Am A U.S. Citizen Living Overseas, Married (With 2 Children) To A Non-U.S. Citizen. How Do I File My U.S. Tax Return?
You have 3 options:
  1. Married filing jointly
  2. Married filing separately
  3. Head of Household
The benefits of each specific filing status vary according to your specific circumstances.
I Am A U.S. Citizen Living In Israel And Have Opened An Israeli Bank Account. Must I Report Interest Income Earned In New Israeli Shekels On My U.S. Tax Return?
I Am A U.S. Citizen Living In Israel And Have Opened An Israeli Bank Account. Must I Report Interest Income Earned In New Israeli Shekels On My U.S. Tax Return?
The IRS requires U.S. citizens to report their worldwide income in U.S. dollars. If the Israeli government assessed any tax, you are entitled to take a tax credit against any U.S. income tax on this income.
I Worked For Several Years In The U.S. And Have Recently Moved To Israel. I Paid A Great Deal Of Money Into The American Social Security System. Will I Be Eligible For Social Security Pension Upon My Retirement?
If both my spouse and I have to file separate FBAR forms to report individual accounts, do we have to include our jointly owned accounts on both FBAR forms or is it enough to report it on one form?
You are entitled to Social Security even after leaving the U.S. if you meet one basic condition: you must have paid in 40 quarters of Social Security payments. If you have not achieved the full 40 quarters, we can help you obtain them even while living in Israel. Once eligible, you will receive the payments which are not subject to either U.S. or Israeli tax. For the amount of benefits you are entitled to click here. To check the number of quarters you have, click here (scrool to the bottom of page and click-‘request a social security statement’).
What Are The 2022 Exchange Rates?
What Are The 2022 Exchange Rates?
The 2022 average x-rate (used for tax returns) is 3.36 NIS/USD
The 2022 year-end x-rate (for FBARs) is 3.52 NIS/USD
If I report the account of my more than 50%-owned foreign company, should I put my name or the company’s name on the line where it asks for the owner's name?
If I report the account of my more than 50%-owned foreign company, should I put my name or the company’s name on the line where it asks for the owner's name?
When filing the FBAR, you should put your name.
Do you prepare both U.S. and Israeli tax returns?
Do you prepare both U.S. and Israeli tax returns?
While we are very familiar with both Israeli & U.S. tax rules, we specialize in preparing only U.S. tax returns. We work with the top Israeli accountants nationwide to ensure you have the best of both specialties. We can work hand in hand with them to deliver a seamless experience.
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Can you help with tax planning and consulting, or do you only prepare tax returns?
Can you help with tax planning and consulting, or do you only prepare tax returns?
We are here to advise you and help you maximize the potential possible in your tax planning. While you can decide to use only our tax preparation services, our expert knowledge and strategic tax planning for our clients are the real value we provide.
Do you assist with IRS notices and audits?
Do you assist with IRS notices and audits?
Yes, we can assist with IRS notices and audits. We cannot improve the IRS service or make them fix their problems. However, we improve our systems consistently to deal with the IRS more efficiently, and we offer notice insurance that protects you from any alarming letters you may receive.
Do you offer guidance for U.S. citizens making Aliyah or returning to the U.S.?
Do you offer guidance for U.S. citizens making Aliyah or returning to the U.S.?
We offer specialized relocation packages to people coming on Aliyah or hi-tech executives/employees moving to the U.S. You can see more on our New Olim and Toshav Chozer page
New Olim and toshav Chozer
Do you coordinate with my other service providers, or must I constantly be in the middle?
Do you coordinate with my other service providers, or must I constantly be in the middle?
You do not need to send emails back and forth between us and other service providers. You likely want to focus on your business or job. We are happy to interface directly with other service providers, such as lawyers, Israeli accountants, and financial advisors. We can keep you as involved as you want to be.
Can I submit my tax documents electronically?
Can I submit my tax documents electronically?
Yes, we invest in our electronic systems that allow you to submit documents via our secure portal. We pride ourselves on being at the forefront of technology. If you visit our office, you can rest assured you won't find stacks of documents everywhere.
Our Portal
How long does preparing and filing a U.S. tax return typically take?
How long does preparing and filing a U.S. tax return typically take?
We ensure that you stay on a strict schedule. Assuming we get all documents timely and organized, receiving a draft of your tax return can take 3-4 weeks. If necessary, we offer an express delivery service that can speed up the process.
Do you follow up to ensure I can file on time?
Do you follow up to ensure I can file on time?
We will regularly follow up with you to ensure you know upcoming due dates and remind you to send us any documents needed.
Will I be able to contact the associate handling my return directly?
Will I be able to contact the associate handling my return directly?
Yes, an associate, team leader, manager, and partner are available for every client as needed. Your first point of contact is with the associate working directly on your tax return to ensure no broken telephone.
Meet Our Team
Can I contact you with questions outside of tax season?
Can I contact you with questions outside of tax season?
Of course! We are here to help guide you and make sure you make informed decisions when it comes to U.S. and Israeli tax matters.
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How do you ensure the security of my personal and financial information?
How do you ensure the security of my personal and financial information?
We take security very seriously. Any documents with private details like social security numbers are shared via our secure client portal. Our team also goes through multiple security checks to access client data.
Privacy Policy
Do you charge a fixed fee or bill by the hour for your services?
Do you charge a fixed fee or bill by the hour for your services?
Our goal is to ensure that you don't get surprised. With that end in mind, we usually give you a cost breakout before starting any project or return. This way, you know exactly what is included. In some situations where it may be impossible to calculate the scope, we will use an hourly rate but will communicate that beforehand.
Lets discuss costs
Do I need to pay upfront, or can I pay after filing my return?
Do I need to pay upfront, or can I pay after filing my return?
For more significant projects, we will ask for a retainer upfront. For individual tax return preparation, we generally only send you an invoice after we have prepared the return and it is ready to be filed.
What payment methods do you accept?
What payment methods do you accept?
We accept many payment methods, including credit cards (except Discover), bank transfers, and checks. We also accept transfers and payments in USD or NIS, whichever is easier for you.
Do you offer services in Hebrew or only in English?
Do you offer services in Hebrew or only in English?
Many of our associates are fluent in both Hebrew and English. We will pair you with the perfect match for your needs from a language and technical expertise perspective.
Services in Hebrew
Do I need to file a U.S. tax return if I live in Israel?
Do I need to file a U.S. tax return if I live in Israel?
Yes, U.S. citizens must file a U.S. tax return annually, regardless of where they live. This requirement includes reporting your worldwide income.
More about filing
How does the U.S.-Israel Tax Treaty impact my taxes?
How does the U.S.-Israel Tax Treaty impact my taxes?
The U.S.-Israel Tax Treaty helps with what income needs to be reported and who between Israel and the U.S. gets the first right of taxation. We write in-depth about the most essential benefits on our US-Israel Tax Treaty page.
Do I need to file state tax returns in the U.S. after moving to Israel?
Do I need to file state tax returns in the U.S. after moving to Israel?
Some states require you to file a return if you maintain residency or have income sourced from the state, like real estate. It is essential to properly break residency from the state you are moving out of, particularly if it is a state such as New York or California that is aggressive about its residency laws.
What is the deadline for filing my U.S. tax return while living in Israel?
What is the deadline for filing my U.S. tax return while living in Israel?
The standard deadline is April 15th, but U.S. citizens living abroad are granted an automatic extension until June 15th. You can also request a further extension until October 15th and sometimes until December 15th. See our Deadline calendar for all relevant filing deadlines.
Do I need to report my Israeli Income on my U.S. tax return?
Do I need to report my Israeli Income on my U.S. tax return?
You must report all worldwide income, including Israeli income, on your U.S. tax return. You may be able to offset this income using the Foreign Earned Income Exclusion or the Foreign Tax Credit. However, it will still need to be reported.
What is an FBAR, and when do I need to file it?
What is an FBAR, and when do I need to file it?
The FBAR (Foreign Bank Account Report) is required if you have foreign financial accounts that exceed $10,000 at any point during the year. You can find more information on our FBAR page.
Can I contribute to an IRA or Roth IRA while living in Israel?
Can I contribute to an IRA or Roth IRA while living in Israel?
Yes, you can contribute if you have earned income. However, eligibility for contributions, particularly for Roth IRAs, depends on your income level and tax filing status.
Can I claim deductions for charitable donations made to Israeli organizations?
Can I claim deductions for charitable donations made to Israeli organizations?
You can claim deductions for donations to Israeli organizations so long as they are approved under 46א and you have Israeli source income. Consult our blog to learn more about maximizing the tax benefits of your charity.
Are there special considerations for self-employed (atzmaim) U.S. citizens living in Israel?
Are there special considerations for self-employed (atzmaim) U.S. citizens living in Israel?
Yes, self-employed individuals must pay self-employment tax to the U.S. on their net earnings, in addition to Israeli income tax and bituach leumi. In our article, we go in-depth about it and other areas that can cause you taxes, the top U.S. tax mistakes to avoid for dual citizens in Israel.
Do you consult for people moving to the U.S.?
Do you consult for people moving to the U.S.?
Yes, we provide specialized services for individuals moving to the U.S., including take-home simulations, tax planning, and assistance making the move as smooth as possible. We dive into it more deeply in our article here.
What should I do if I've never filed a U.S. tax return while living in Israel?
What should I do if I've never filed a U.S. tax return while living in Israel?
It's important to get compliant as soon as possible. The Streamlined Filing Compliance Procedure may allow you to catch up on past returns without facing significant penalties. We invite you to contact us to discuss the details.
Do I need to notify the IRS when I move to Israel?
Do I need to notify the IRS when I move to Israel?
While there's no specific requirement to notify the IRS of your move, you may want to update your address on your tax return and with the IRS to ensure you receive any communications. If they do not receive a change of address form, the IRS may suspect that your identity has been stolen if they start to see Israeli addresses with no warning.
Do I owe tax for transferring my financial accounts to Israel?
Do I owe tax for transferring my financial accounts to Israel?
Transferring funds from the U.S. to Israel does not trigger tax, but the banks may need specialized letters from your CPAs or lawyers discussing how the funds have been appropriately reported to all authorities.
Do I need to file Israeli taxes as soon as I move, or is there a grace period?
Do I need to file Israeli taxes as soon as I move, or is there a grace period?
Israeli tax obligations generally begin once you establish residency. However, there may be exemptions or deferrals for new immigrants under Israeli tax law. We highly recommend you read our article about the top tax tip for those making aliyah to learn more.
How will my pension or retirement income be taxed if I live in Israel?
How will my pension or retirement income be taxed if I live in Israel?
U.S. and Israeli pensions are taxed differently depending on how long you have been in Israel and when you came. We go into detail on U.S. pensions here. and Israeli pensions here.
How will my U.S. Social Security benefits be taxed if I retire in Israel?
How will my U.S. Social Security benefits be taxed if I retire in Israel?
Under the U.S.-Israel tax treaty, U.S. Social Security benefits are exempt in both the U.S. and Israel for those living in Israel, which is a significant benefit of retiring to Israel. For more ways the treaty can help you, visit our U.S.-Israel tax treaty page.
Can I receive U.S. Social Security benefits while living in Israel?
Can I receive U.S. Social Security benefits while living in Israel?
Yes, you can receive U.S. Social Security benefits while living in Israel. You can even have Social Security benefits deposited directly into your Israeli bank account.
What are the tax implications of withdrawing from my U.S. retirement accounts while living in Israel?
What are the tax implications of withdrawing from my U.S. retirement accounts while living in Israel?
Withdrawals from U.S. retirement accounts can vary depending on how long ago you came to Israel. Read our article here. with everything you need to know.
Will I owe U.S. taxes on Israeli pension income?
Will I owe U.S. taxes on Israeli pension income?
It is possible, but if your tax returns have been prepared in advance for this, it can be avoided. You can read our article on the subject here. with everything you need to know.
How does Israeli inheritance tax impact U.S. citizens living in Israel?
How does Israeli inheritance tax impact U.S. citizens living in Israel?
Israel does not currently have an inheritance tax. However, U.S. citizens may still be subject to U.S. estate taxes on their worldwide assets, including those in Israel. See our estate planning page for more details.
How does U.S. estate tax apply to U.S. citizens living in Israel?
How does U.S. estate tax apply to U.S. citizens living in Israel?
U.S. citizens are subject to U.S. estate tax on their worldwide assets, regardless of where they live. See our page here for more details.
How are RSUs taxed for U.S. citizens living in Israel?
How are RSUs taxed for U.S. citizens living in Israel?
Upon vesting, RSUs (Restricted Stock Units) are generally taxed for U.S. purposes. If the RSUs are under an Israeli 102 plan, then for Israeli tax purposes, they would be taxable only upon sale. This can lead to double taxation if not carefully planned. For more details, we suggest reading our blog: When Should You Sell Your RSUs?
How are stock options taxed when granted vs. when exercised?
How are stock options taxed when granted vs. when exercised?
For U.S. tax purposes, stock options are taxed when exercised. If the RSUs are under an Israeli 102 plan, then for Israeli tax purposes, they would be taxable only upon sale. This can lead to double taxation if not carefully planned. For more details, we suggest reading our blog: U.S. Citizen in Israeli High-Tech? Understand Your Stock Option Grant
What is the difference between Non-Qualified Stock Options (NQSOs) and Incentive Stock Options (ISOs)?
What is the difference between Non-Qualified Stock Options (NQSOs) and Incentive Stock Options (ISOs)?
There are several differences, but the most significant is that you may be exempt from U.S. income tax upon exercise with ISOs. For an in-depth understanding, we suggest reading our article: Can ISOs Solve the Double Tax Issue for U.S. Citizens in Israeli High-Tech?
When do I report RSUs on my U.S. tax return?
When do I report RSUs on my U.S. tax return?
Usually, you report RSUs upon vesting. There are some double-trigger RSUs that only vest upon hitting a milestone event, but these are uncommon.
More about RSUs
What happens if I relocate back to the U.S. before my RSUs vest?
What happens if I relocate back to the U.S. before my RSUs vest?
This can get very complex because sourcing calculations have to be done between the U.S. and Israel. It is best to reach out in such a scenario so we can help give the complete picture.
What are the implications of selling RSUs or options after becoming an Israeli resident?
What are the implications of selling RSUs or options after becoming an Israeli resident?
If you were granted RSUs in the U.S. and they vest after you move to Israel, they can be taxable for both U.S. and Israeli purposes. A calculation should be run to see the percentage breakout of who gets the first right of taxation on the RSUs.
What is a Controlled Foreign Corporation (CFC), and does my Israeli company qualify?
What is a Controlled Foreign Corporation (CFC), and does my Israeli company qualify?
A Controlled Foreign Corporation (CFC) is a company owned or controlled by more than 50% of U.S. shareholders at any point during the tax year. To do this calculation properly, you need to include only those who own/control more than 10% of the company.
How do I determine if my Israeli company is subject to Subpart F income rules?
How do I determine if my Israeli company is subject to Subpart F income rules?
There are multiple types of Subpart F income, but the main two we see here in Israel are if your Israeli CFC (see above about what a CFC is) has lots of passive income or if you, as a U.S. person, are taking loans from your company.
What is Global Intangible Low-Taxed Income (GILTI), and how does it affect my Israeli company?
What is Global Intangible Low-Taxed Income (GILTI), and how does it affect my Israeli company?
GILTI is applicable if a CFC (see above question) has income in their foreign company and does not have enough tangible property or foreign taxes to exempt it. In these cases, the owners of the CFC will have to pick up income on their personal tax returns and potentially pay tax on the CFC income.
What is the "high-tax exception" under GILTI, and can my Israeli company qualify?
What is the "high-tax exception" under GILTI, and can my Israeli company qualify?
If your Israeli company pays over 18.9% tax on its annual net income, it may not be subject to the GILTI tax. Please note that your net income should not include the prior year's net operating losses.
Do I need to file Form 5471 for my Israeli company, and what information is required?
Do I need to file Form 5471 for my Israeli company, and what information is required?
It is possible. Suppose your company is a CFC (see above question), or it is the company's first year, or you became a U.S. person while owning over 10% of a foreign company. In that case, you likely have a Form 5471 filing requirement.
How do distributions from my Israeli company affect my U.S. tax obligations?
How do distributions from my Israeli company affect my U.S. tax obligations?
Distributions or dividends from your Israeli company are taxable for U.S. tax purposes. You may be able to offset the U.S. tax with Israeli taxes being paid.
What does it mean to renounce U.S. citizenship?
What does it mean to renounce U.S. citizenship?
Renouncing U.S. citizenship is a legal process by which an individual voluntarily gives up their rights and responsibilities as a U.S. citizen. It includes giving up the right to live and work in the U.S. without a visa and relinquishing the obligation to file U.S. taxes on worldwide income.
Why might someone choose to renounce their U.S. citizenship?
Why might someone choose to renounce their U.S. citizenship?
Individuals may choose to renounce U.S. citizenship for various reasons, such as reducing the complexity of managing tax filings on global income, avoiding potential double taxation, or simplifying estate planning. Some may also renounce due to personal, political, or lifestyle choices, including a desire to commit to citizenship in another country fully. See our article for 10 reasons to renounce your US citizenship as soon as possible.
What is the process for renouncing U.S. citizenship?
What is the process for renouncing U.S. citizenship?
We can walk you through the whole process from start to finish. First, we will assist you with filling out all the necessary forms and help you schedule an appointment at a U.S. embassy. Next, we have a drill session to ensure you are properly prepared for the interview. Lastly, we assist with any structure planning and filing necessary to make sure you are successful.
Where do I go to renounce my U.S. citizenship if I live in Israel?
Where do I go to renounce my U.S. citizenship if I live in Israel?
There are several options available. The most common is the U.S. Embassy in Jerusalem or the U.S. Embassy Branch Office in Tel Aviv.
How long does the renunciation process typically take?
How long does the renunciation process typically take?
The process can take several months from the time you submit the documents to the issuance of your Certificate of Loss of Nationality. We have ways of speeding up the time to get a meeting if you are trying to move things along. When you're ready to start the process, contact us for more information.
What are the tax consequences of renouncing U.S. citizenship?
What are the tax consequences of renouncing U.S. citizenship?
Renouncing U.S. citizenship does not automatically relieve you of tax obligations. You will need to file a final tax return covering the part of the year when you were a citizen, including Form 8854, to certify compliance with U.S. tax laws for the five years before renunciation. You may also be subject to the exit tax, depending on your net worth and income. Lastly, if you consider having income from U.S. sources, you may continue to have an annual filing requirement.
What is the exit tax, and who is subject to it?
What is the exit tax, and who is subject to it?
The exit tax applies to individuals who meet the "covered expatriate" criteria, such as having a net worth of $2 million or more or failing to certify five years of tax compliance before renunciation. The exit tax is on the unrealized gain in your worldwide assets as if they had been sold at fair market value on the day before renouncing citizenship. You can plan your renunciation with us to ensure the exit tax doesn't apply unnecessarily.
How does renouncing U.S. citizenship affect my Social Security benefits?
How does renouncing U.S. citizenship affect my Social Security benefits?
Renouncing U.S. citizenship does not necessarily stop your eligibility for Social Security benefits. You can still receive benefits if you are eligible based on your work history.
Can I travel to the U.S. after renouncing my citizenship?
Can I travel to the U.S. after renouncing my citizenship?
You can still travel to the U.S. after renouncing your citizenship, but you will need a visa. There is no bias against you for renouncing your citizenship when applying for a visa.
How does renunciation affect my estate planning and inheritance?
How does renunciation affect my estate planning and inheritance?
Renouncing U.S. citizenship may impact your estate planning, especially regarding U.S. estate tax. As a non-citizen, non-resident, only your U.S.-situs assets (such as real estate in the U.S.) may be subject to U.S. estate tax, but you will lose access to the higher exemption levels available to citizens. Check out our estate planning page to learn more.
When is the regular IRS tax filing deadline for U.S. citizens living in Israel?
When is the regular IRS tax filing deadline for U.S. citizens living in Israel?
U.S. citizens living abroad generally have an automatic extension to file their individual tax returns until June 15th. However, interest will start to accrue on any tax due from April 15th.
Can I request a further extension beyond June 15th?
Can I request a further extension beyond June 15th?
Yes, we can generally extend individual tax returns until October 15th and further to December 15th for those living in Israel.
What form should I submit to request an extension beyond June 15th?
What form should I submit to request an extension beyond June 15th?
Form 4868 for Individual filers. Form 7004 for business filers.
Why is it beneficial to extend my tax return?
Why is it beneficial to extend my tax return?
There are several reasons why extending your tax return can be beneficial. Some of them include gathering more accurate information and having more time to make prior year contributions or receive refunds for kids who don't yet have a social security number. We go in-depth in our article: Why Filing an Extension is a Smart Move.
Do I need to pay my taxes by the original April 15th deadline even if I get an extension?
Do I need to pay my taxes by the original April 15th deadline even if I get an extension?
It is not a bad idea to pay an estimate of what you expect your taxes to be. We can help project this if you don't have all your tax documents ready. The reason is that interest starts to accrue from April 15th, regardless of whether you have an extension.
Can I e-file my U.S. tax return from Israel?
Can I e-file my U.S. tax return from Israel?
Yes. We electronically file most of the tax returns we prepare. Your location is not a factor in whether you can e-file a return.

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While we have made every effort to offer current and accurate information, errors can occur. Changes in laws and regulations over time may affect this material. This information is not given with any guarantee of completeness or with any warranty of any kind. Philip Stein and Associates does not endorse any methods, activities, software, or services mentioned in this site.Information contained herein should in no circumstance be considered legal accounting advice. You should consult with Philip Stein and Associates or other professional U.S. CPA’s familiar with your particular situation for advice, before making any decisions regarding your finances.Philip Stein and Associates has no control over individuals or organizations linked to this site.Any information on this website is the legal property of Philip Stein and Associates, Ltd. Any reproduction of materials contained here must state their source.

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