Glossary

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A

Adjusted Gross Income

Adjusted Gross Income (AGI) is a key U.S. tax figure that affects deductions, credits, and tax liability. Here’s what AGI means and why it matters for Americans in Israel.

B

Bituach Leumi

Bituach Leumi is Israel’s National Insurance Institute. It collects mandatory contributions and pays benefits such as healthcare, pensions, and unemployment support.

Bonus Depreciation

Bonus depreciation allows businesses to deduct part or all of the cost of new or used assets in the year they’re placed in service, accelerating tax savings. Here is how it works.

C

Capital Gains Tax

Capital gains tax applies when you sell an asset for more than you paid for it. The tax treatment depends on holding period, asset type, and residency.

CFC

Understand what qualifies as a Controlled Foreign Corporation (CFC), how U.S. tax rules apply to foreign income, and which IRS forms expats must file to stay fully compliant.

D

Depreciation

Depreciation spreads the cost of business assets across their useful life. It affects taxable income, financial reporting, and long-term tax planning.

Dual Citizenship

Can you be a citizen of two countries? Learn how dual citizenship works in the U.S. and Israel, from rights and restrictions to taxes, travel, and military service.

E

Effective Tax Rate

The effective tax rate reflects the actual percentage of income paid in taxes.

Equity Compensation

Equity compensation provides stock, options, or other ownership rights as part of pay. Its structure determines when and how it is taxed.

83(b) Election

An 83(b) election allows early taxation of restricted stock or equity compensation. Filing it can affect future tax liability and reporting obligations.

Estate Tax

Estate tax applies to the value of assets transferred after death. Understanding exemptions, timing, and planning options helps reduce potential tax exposure.

1031 Exchange

A 1031 exchange allows real estate investors to sell one property, buy another of like kind, and defer paying U.S. capital gains taxes. However, many nuances complicate the process.

F

Foreign Tax Credit

A foreign tax credit helps prevent double taxation by allowing taxpayers to offset U.S. taxes with eligible foreign taxes already paid abroad.

Foreign Earned Income Exclusion

The Foreign Earned Income Exclusion (FEIE) lets many U.S. citizens working abroad exclude thousands of dollars of foreign wages from U.S. tax, but only if they meet strict requirements.

FICA

Through FICA, U.S. workers and employers fund retirement and healthcare programs. Philip Stein & Associates explains how these payroll taxes affect you abroad

G

Gift Tax

Gift tax is a U.S. federal tax on transferring property without payment. Learn how it works, how it differs from inheritance tax, and strategies for Americans abroad.

GILTI

If you’re a U.S. shareholder in a foreign business, GILTI rules may apply. Learn how this tax works, who it affects, and what steps you can take to stay compliant with IRS requirements.

I

Israeli Tax Authority

The Israeli Tax Authority manages Israel’s tax system, from income tax and VAT to customs and enforcement. Here’s what it does and how it affects American taxpayers.

Indirect Tax

An indirect tax is built into the price of goods and services. Unlike income tax, it’s collected by sellers and passed to the government. Examples are VAT, sales tax, and customs duties.

ITIN

An ITIN allows people without a Social Security Number (SSN) to file U.S. taxes. Philip Stein & Associates guides U.S. citizens in Israel and Israelis with U.S. tax ties through the process

IRS

From tax collection to audits and refunds, learn how the IRS operates, its role in the U.S. tax system, and why it matters to every American taxpayer, at home or abroad.

K

Keren Hishtalmut

Keren Hishtalmut is a tax-advantaged Israeli savings fund funded by employers, employees, or the self-employed. Here’s what it is and why it matters.

L

LLC

An LLC is a U.S. business structure that combines liability protection with flexible taxation. Discover its pros, cons, and key tax rules for American citizens abroad.

M

Marginal Tax Rate

A marginal tax rate is the rate applied to the last portion of income earned. It affects additional earnings, deductions, and long-term tax planning.

P

Property Tax Exemption

A property tax exemption lowers or eliminates real estate taxes for certain people or properties, such as seniors or government agencies. Here’s what it means and who qualifies.

Passive Income

From rental income to dividends, passive income brings tax obligations. Philip Stein & Associates guides U.S. citizens in Israel through compliant reporting.

R

Roth IRA

A Roth IRA is an individual retirement account where contributions are made after tax, and qualified withdrawals are generally tax-free. Here’s what it means and who qualifies.

Resident Alien

A resident alien is a non-U.S. citizen who meets IRS tests for U.S. tax residency. Philip Stein & Associates helps Israelis with U.S. tax ties stay compliant.

S

Section 102 (Israeli Tax Ordinance)

Section 102 regulates how employee stock options and shares are taxed in Israel. The chosen track affects timing, rates, and reporting obligations.

SSN

An SSN is a nine-digit U.S. identification number for citizens and residents. Learn who is eligible, who must have one, and its relevance for Americans in Israel.

Shnat Histaglut

Shnat Histaglut, or the “acclimatization year,” is a valuable tax benefit available to olim chadashim. U.S. citizens making Aliyah can use this grace period to adjust financially to their new life in Israel.

T

Trump Account

Trump Accounts are child-focused savings accounts established under the Working Families Tax Cuts, offering early contributions and long-term savings potential.

10 Year Tax Holiday

Israel offers a 10-year tax exemption on foreign income for new immigrants and returning residents. In January 2026, reporting rules changed. Learn more.

Tax Brackets

Tax brackets determine how much tax you pay based on your income level. Both the U.S. and Israel use a tiered system, but each applies it differently. Here are the details.

Tax Residency

Tax residency decides where you pay taxes and what income is taxable. U.S. and Israeli laws use different tests to determine tax residency. Knowing both helps avoid double taxation.

Tax Year

A tax year defines the 12-month period used for reporting income. Understand the difference between calendar and fiscal tax years, plus key U.S. and Israeli deadlines.

Tax Advisor

A tax advisor provides expert guidance on tax laws and strategies to help you reduce liabilities while staying compliant. Learn what they do and when you should hire one.

Tax Planning

Tax planning helps you reduce taxes, manage income timing, and use credits and deductions wisely. Proactive planning creates long-term financial efficiency.