Our offices specialize in preparing and filing US tax reports for US citizens residing in Israel.
We do so with professionalism, transparency and precision, maximizing our clients’ benefits and carefully planning for their future.
The US taxation system requires all of its citizens and residents to file their taxes and report their income, regardless of their place of residence. Even if the US citizen resides in Israel and has never set foot in the US, they are still required to report their international income to the IRS – Internal Revenue Services, the revenue branch of the US federal government and Ministry of Treasure.
Filing is done via form 1040, which includes all of the reporter’s income from all sources. In addition to information on income, addendums require the disclosure of information concerning financial processes. Thus, for instance, the filer must report any foreign accounts, crypto currency, offshore company, etc.
Who is required to file?
3
tests that determine whether you are required to file taxes
Age
Income test
Family status
The following table details filing obligations according to the three criteria
Family status | Age | File if income is greater than: |
Single | Under 65 | 12,200 $ |
| Over 65 | 13,850 $ |
Married US citizens | Under 65 | 24,400 $ |
| One over 65 | 25,700 $ |
| Both over 65 | 27,000 $ |
US citizen married to a non-US citizen | Any age | 5 $ |
Head of household (married to a non-US citizen but having American dependents) | Under 65 | 18,350 $ |
| Over 65 | 20,000 $ |
Widow up to 2 years post-mortem | Under 65 | 24,400 $ |
| Over 65 | 25,700 $ |
It is important to note that this table covers most filing requirements, but there are exceptions, for instance: self-employed, whether an exempt or a licensed dealer or partnership require filing for income greater than $400, except limited partners.
Filing date
The first official due date is April 15 of the following year
Citizens residing outside the US receive an automatic extension, until June 15.
You can apply for an extension of up to 6 months, until October 15.
You can request (in writing) a special extension until December 15, pending approval of the IRS
A resident who left the US can request another extension until the time they establish their residency in the new country. This requires filing form 2350.
Tax brackets for 2020
Tax rate | Single | Married filing together | Head of household | Married to a non-US citizen |
10% | Up to $9,700 | Up to $19,400 | Up to $13,850 | Up to $9,700 |
12% | $9,701—$39,475 | $19,401—$78,950 | $13,851—$52,850 | $9,701—$39,475 |
22% | $39,476—$84,200 | $78,951—$168,400 | $52,851—$84,200 | $39,476—$84,200 |
24% | $84,201—$160,725 | $168,401—$321,450 | $84,201—$160,700 | $84,201—$160,725 |
32% | $160,726—$204,100 | $321,451—$408,200 | $160,701—$204,100 | $160,726—$204,100 |
35% | $204,101—$510,300 | $408,201—$612,350 | $204,101—$510,300 | $204,101—$306,175 |
37% | Over $510,300 | Over $612,350 | Over $510,300 | Over $306,175 |
As there are many differences between Israeli and US policy, we recommend using a certified tax advisor with the knowledge and understanding of the system, to bridge this complexity.
Contact us today for a quote.
