US tax advisors for dual US-Israeli citizens

Along with FATCA and FBAR reporting, these are the specific Israeli IRS tax issues our team of tax attorneys, CPAs, and tax preparers assist our clients with.

Common tax issues of US-Israeli dual citizens

• Bank Leumi is often a “blacklisted” bank of note Foreign facilitators list. Accounts can be frozen, and sometimes taxpayers can be frightened into doing something they shouldn’t do.
• Our clients tend to have a lot of US-based income, along with Israeli, and European investments.
• Inheritance of bank accounts throughout Europe from Holocaust survivors that have not been reported to the US.
• Rental income in the US and Europe that might be missing important depreciation deductions.

Are you a US person living in Israel?

In Israel, resident taxpayers are taxed on their worldwide income. However, non-resident taxpayers are taxed only on income received in Israel or on income arising in Israel.

The US taxes its persons on a worldwide basis. So what you earn in Israel, even if it is taxed by the Israeli taxing authority, is subject to additional taxes by the IRS. This is true even if you have a “tax-free” account in Israel. However, you are entitled to a credit for taxes paid. In the alternative, there is a foreign income exclusion which will exempt a portion of your income from income taxes.

Are you an Israeli person living in the United States? (Visa/Substantial Presence Test)

If you are a Green Card holder you are subject to universal taxing jurisdiction on all your income, anywhere in the world. If you are a visa holder the rules are a bit more complicated about when universal taxing jurisdiction is triggered.

The Foreign Earned Income Exclusion

Citizens and residents living and working outside the U.S. may be entitled to a foreign earned income exclusion that reduces taxable income. In addition, you may exclude housing expenses, but with limits. There are limits and special rules about who qualifies for the exclusion, and we can help you understand if you qualify.

Foreign Tax Credits

This is a non-refundable tax credit for income taxes paid to a foreign government as a result of foreign income tax withholdings. The foreign tax credit is available to anyone who either worked in a foreign country or has investment income from a foreign source. There are qualifying factors, and we can help you understand if you are eligible to tax advantage of this credit.