Israel – Documents Needed

Jan 1, 2014

The Israeli tax year ends December 31st and individual tax returns are due by April 30th. Most Israel residents should receive the documents they need for U.S. tax filing by March or April. These include:

  • Form (tofes) 106 for salaried employees
  • Mas Hachnasa issued “shuma” (Form 1301), if filed.
  • Self employment (osek patur or atzmah’ee); submit your shuma, income and expense report (doch revach v’hefsed), depreciation schedule, and record of estimated payments to the IRS.
  • Form (tofes) 867 (“nikuyi mas bemakor”) from Israel bank to include any interest, dividends, capital gains, etc
  • Israeli mutual funds (keren ne’manut etc) – statement of transactions bought and sold.  For any sales, we need the report(s) of when the funds were purchased.
  • Israeli residents often have other sources of income that also needs to be reported, including:
    • Rental income; submit summaries of income and expenses(maintenance, insurance, mortgage interest, renovations, etc), rental contracts, and purchase contracts, Israeli income tax paid
    • Fund withdrawals: statements of withdrawal from any tax deferred savings such as kupat gemel or keren hishtalmut
    • Other income: maternity leave, unemployment compensation, etc
  • Corporation (Israeli) – annual financial reports (doch kaspiot), incorporation statement, schedule of ownership (moniot), annual Israeli tax filing
  • Inheritance – report the following details: name of, relationship to, citizenship status (US) of the deceased; date(s) of transfer, amounts and currencies; (provide documents)
  • Gifts – full details of the transaction including a letter of explanation from the giver of the gift.
  • US based income – forms 1099, W-2, K-1, 1042-S
  • Other income – you are required to report 100% of world-wide income.  If you have any additional sources of income then please submit the relevant documents, details, and explanations.
  • Additional documents that could lower tax due or help generate a refund include:
    • Tuition payments to eligible University (eligible universities in Israel include Hebrew University, Tel Aviv University, IDC, Ben Gurion University, Haifa University, Technion and Bar Ilan University); submit 1098 if available
    • Child care expense (Provider name, address, ID number, amount paid)
  • Changes in family or life situation – marriage, divorce, change of address.  For new children born, submit copies of the SSN card, citizenship document, and Israeli birth certificate (with English).
    • Note – in the case of divorce or separation, then the right to claim children as tax dependents will need to be discussed and established.

 

FBAR and FATCA form 8938

All non-US accounts must be included on FBAR and form 8938. These include:

  • Bank accounts – checking, savings, other; submit statements of the maximum annual balance (generally the ishur yitrot)
    • Note – include details of ownership or signature authority
  • Pension accounts – such as kupat gemel, keren pensia, etc; submit the annual statement (doch sh’nati)
  • Provident accounts – such as keren hishtalmut; submit the annual statement (doch sh’nati)
  • Life insurance – such as bituach chayim; submit the annual statement (doch sh’nati)

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