Updates and Enddates

June 18, 2013

Shalom loyal fans!
I haven’t posted here in over two years! I apologize, but I think there evidently is enough information already on the blog to help 90% of the people and issues that they have.

But I have quite a few things to say, not necessarily in this order:

1. Doch Shnati Annual Tax Return deadline has been fluidly postponed again this year. It is the end of June, so you have some time yet.

2. I just called Mas Hachnassa, and they said I do not have to appear in person at their office to submit my printout of my doch. I can put both copies in the mail (my office is Jaffa Road 236, Jerusalem) and they will stamp my copy and mail it back to me. Kewel!

3. That printout is from the online doch shnati that everyone has to do nowadays. I never posted about it (tsk tsk). It really is quite easy. Some tips:
a. use Microsoft Internet Explorer (probably impossible otherwise).
b. Prepare the doch on paper first, so all you have to do is copy. Otherwise, you will spend too much time on line and perhaps lose your work.
c. Save frequently.
d. Other suggestions all apply as before, when completing the doch by hand old fashioned.

4. (Hidden sneakingly) I closed my tik! Because when doing my USA taxes for that $1000 a kid kickback, my accountant told me that an atzmai has to pay a $1000 fee to the IRS! So when you factor this in, the luxury of having an Israeli tik without having enough clients that require it can be very expensive.

I also got a j-o-b, so I am making money without needing a tik, so that pretty much clinched it.

If I will ever want to open a tik again, I can simply google “opening a tik” and find a dozen videos about the Simpsons (?) I mean, “opening a tik at mas hachnassa”, and find a whole bunch of information that some kinds soul wrote since February 2008…

5. Closing a tik, btw, is also easy and not scary.
a. Go to VAT offices on Kanfei Nesharim 66 (not 236 Jaffa). This is even if you are an osek patur, that is, had nothing to do with VAT de facto.
b. Tell them you want to close your tik. You will fill out a form and undergo a short meetign with a nice clerk. In fact, iirc, I filled out the form with the clerk’s help.
c. When you get your copy of what they give you, go downstairs to the modi’in, tell them you closed your tik in Ma’am and need to close it in Mas Hachnasa, they give you a form to fill out, you do that, submit it, and voila! You’re done. NOTE: I did this in Kanfei Nesharim even though I am really affiliated with Jaffa 236. I just wrote in big letters (as someone told me to) “Chuliyah 46″ or whatever the number was, and they said it would get there in internal mail.

There you go, kind and faithful readers!
I hope this blog will continue to help people, and please continue to write if you have any questions. Even though I am no longer in the game, I still remember the rules, and as they say, “those who know, do, those who don’t so, teach.” Or something like that.


a message about tium mas – your comments appreciated

May 14, 2011
Shalom Gidon!
Thank you for your blog – it’s quite a nice support! 
Thank you aww shucks
I am an olah from Toronto,  
welcome!
 and while I have a job at a bar, I am also getting into the business of doing English voice-overs for videos.  
good luck
 The company I now work for requested a Teum Mas. Two questions: 1) Where in Jerusalem do I go to arrange one of these?;  
a long time ago, i got one, pretty easily. i went to Kanfei Nesharim (66 i think) but I live in Maale Adumim, you might need to go to Center One
 and 2) Do I need any information from my other employer when I go to arrange this for my second employer? 
I think how much you expect to make from all your employers total 2011. If you are follwoing the adventures of an Osek Zair, than you probably have nothing to worry about:-)
But I think nowadays you can get a teum mas via the Internet! In fact, it might even be the better or even only way…
Please keep me posted. I will post this on my blog for others to chime in. Gotta love Web 2.0…
Thanks, shavuah tov.
Best,
Liana

Doch Shnati Deadline Extended !(what a surprise)

May 4, 2011

Hi loyal fans!

I apologize for not updating this blog as frequently as I should. Please submit your request for your money back in triplicate:-)

Anyway, great news!

As I had a feeling would happen, Mas Hachnasa has extended the deadline for submitting the doch shnati tax return. It was scheduled to be April 30, 2011. This was three days after the end of Pesach, and Shabbat, by the way.

Anyway, nu nu nu I was a naughty boy and didn’t submit my form till then.

But as I said, I had a feeling it would be extended.

So today I succeeded in finding a phone number where someone answered. 02-6559559 ext 6 then 2. That brought be to Galia in the Mateh, and lo and behold, she answered the phone!

So I asked her if there has been an extension. She said I think so, wait a sec. She asked a colleague and he said yes (get this) till June 30! That’s right, not one month, but TWO MONTHS extension!

You can all go back to sleep now.

BTW, you have to submit it by Internet online starting this year. Bli neder, I will report how (easy it is) to do this.


Comprehensive guide to opening a business in Israel

June 30, 2010

I am so glad that I did not write this post such a bombastic title, I am not deserving!

As many of you know, Rachel Berger is a senior executive (to use Old Countryspeak) at Nefesh Benefesh, and if I haven’t plugged that organization until now on my blog, my bad, here it is.

Anyway, somehow I came across this guide, and then found it was barely findable, so I am assuming Rachel won’t mind my posting it here. As a non-professional, I do not attest to the correctness of her writing, nor of mine, blah blah blah. YMMV.

********************************************

Date: Aug 21 2009 – 5:46pm

Establishing a Business

Step 1: Opening a File for VAT
To open a Tik (file) for Ma’am (VAT), you will need to go to the local tax office. To find the local tax office, check online or in a phone directory under “Mas Hachnasa” (income tax). You will need to bring your Teudat Zehut (ID card) with you and fill out forms with the required information. The type of Tik that you open depends on how much you plan to make a year, i.e., the scope of your business.

If you expect to make under 70,000 NIS: Open a Tik for an Osek Patur, which means that you are exempt from Ma’am and – basically – do not need to interface with the income tax offices, which is very convenient. You will need to buy a Pinkas Kabalot (receipt book) so that you can issue receipts for your clients. A Pinkas Kabalot can be found in any office store. can will use the receipts from this Pinkas for bookkeeping purposes.

If you expect to earn over 70,000 NIS: Open a Tik for an Osek Morshe. You will receive an official Ma’am book. Clients will be charged Ma’am and you will basically be required to forward the Ma’am that they pay to the Ma’am office. When you sign up, make sure to ask the exact details of where and how you make the payment.

Step 2: Mas Hachnasa (Income Tax Authorities)
To open a file as an Oved Atzmai (freelancer) , you need to take the Osek Patur or Osek Morshe certificate to the Mas Hachnasa (income tax) office. Find the department in Mas Hachnasa that handles freelancer, and fill out the necessary paperwork. Once you’ve completed the registration, you will be required to submit a tax form once a year, which you will be receiving in the mail from the tax office.

Buy an accountant book – Sefer Tikbulim V’Tashlumim – at any office store, and use it to keep track of your payments and expenses. If you are careful about recording your transactions, it will make it easier to fill out the annual tax form.

Save all of your receipts and relevant paperwork, for a period of seven years. While noone wants to be audited, it does happen, and the only way to protect oneself is by saving all of the necessary documents.

An Atzmai who works from home can deduct some expenses from home bills such as electricity, internet, phone costs, Arnona (property tax), etc. The percentage of the deduction is based on the area used for the business. For example, if a house has four room and one of the rooms is used for business, the deduction that is recognized would be a quarter of the total cost. For more information about what can be deducted, speak to a qualified accountant.

Step 3: Bituach Leumi
When you open a file at Mas Hachnasa, a file is automatically opened for you at Bituach Leumi (National Insurance Institute).

The Bituach Leumi office will send you a form requesting your employment details, including any pay stubs that you have, and an Ishur (statement) from the bank providing that you are the owner of your bank account.

Once you submit this form, Bituach Leumi deducts 9% to 16% of your income as either Bituach Leumi or Mas Briut, depending on how much money you earn. The exact amount that will be deducted is listed on the Bituach Leumi website (HYPERLINK “http://www.btl.gov.il/”www.btl.gov. il).

Step 4: Declaration of Capital
Approximately every four years, you will be asked to submit a declaration which indicates your net worth, including your earnings and any properties that you own. It is recommended that an accountant with expertise in Hats’harat Hon prepare this form on your behalf.

Rachel Berger
Senior Career and Business Developer
NefeshB’Nefesh


Second time it gets easier…

May 20, 2010

Well, it seems I’ve been an atzmai for about two years two months!

I apologize to you, my faithful readers, for not updating this blog more frequently, not to mention for not providing more significant and relevant and helpful (and authoritative) information. You can dock my salary:-)

Seriously, I would appreciate feedback, which would motivate me to write more…

Now that we’ve gotten that off of my chest, here are my comments on completing a Doch Shnati Annual Tax Return:

1. So far, far the second year running, the deadline has been extended from April 30 till May 31. This might be the third year running, or perhaps this happen every year, but I’ve only been watching this year and last. A little odd, as it is hard to imagine a reason to extend that they couldn’t have foreseen, but Welcome To Israel, I guess..

2. Unfortunately, I did not photocopy my Doch Return form from last year, or at least I cannot find it:-), as having it with the questions I had might have made things easier for me this year. The good news is that it ended up being not that hard at all anyway.

3. Here are the questions that I wrote down and got answered by Zehava when I went for the guidance hours:

Line 3: What is the sum that my wife reports (her Tofes 106 has a whole bunch of numbers)

Sections Daled through Yod: Need I cross out the fields that I do not have to fill out?

Line 43: Is this relevant for my wife?

Line 45: Is this relevant for me?

Line 62: Is this relevant for my wife and me?

Line 67: Donations – need I bother submitting?

Line 69: I live in Maale Adumim – is this relevant?

Line 70: Is this relevant for my wife and me or just for me?

Line 71: What do I report for my wife, and is this relevant for me (I did some work during the national elections for a party, they said the 25% tax [ouch!] is definitely non-refundable)?

No line: Need I complete form 1320?

4. The answers:

Sections that I do not need to fill out do not need to be crossed out – don’t bother.

The lion’s share of my questions dealt with my wife’s tofes 106. (Lines 3, 43, 44, 49, 50, 64, 71). Here is the solution, which would have saved me a lot of time with Zehava, and will save you time:

Every line on the Doch Shnati form has a field, often two (for the filer and for his/her spouse). Each field has a code number clearly associated with it. For example, line question 43 has field code 218 for the filer and 219 for the spouse.

NOW, look at the Tofes 106 – every relevant line has a Mem Heh code associated with it. Guess what – that Mem Heh stands for Mas Hachnasa! And guess what – those code numbers match the code numbers on the Doch Shnati form that I discussed in the last paragraph! So all you have to do is connect the dots. Every line in your spouse’s Tofes 106 that has a Code Mem Heh in it, find the identical code on the Doch Shnati, and copy the sum on the Tofes 106 belonging to that code number into the associated field on the Doch Shnati. Simple and fun as that!

I hope this is as clear as it is to me.

The only other questions I had:

Line 45: my Bituach Leumi payments: well, since I know I am below the minimum, I know my payments are about 100 NIS a month. Zehava wasn’t too worried about my reporting the exact total of my payments to Bituach Leumi, so I just wrote down 1300 (one month for good luck). YMMV – you should look this up in preparation for filling out the Doch Shnati and get it exact.

Line 62: Bituach Hayyim Life Insurance: I will find the annual reports I get from the companies that send me for my wife’s and my policies, I expect that there will be a Mem Heh code on those pages too, at least it shouldn’t be too difficult to figure out what numbers go in these fields. As with the philanthropic donations below, this information should result in a tax refund!

Line 67: Charity donations: find all the receipts of donations to Malkarim (NPOs) that say “mukar letzarkei mas hachnasa” and submit them in the original, you evidently get a third back if you have donated more than 400 NIS this year. (if you donated less than about 10% of your income, you should consider upping your donations. Thus spake your conscience:-)

Line 69: Maale Adumim is not a special area, probably just Sderot and Kiryat Shmoneh, but YMMV. Couldn’t hurt to fill out if you think it might be helpful.

Line 70: I just copied from Line 1 – my reported income (sum total of all receipts issued as reported in my receipt book). Form 1320 is a worksheet that helps you clarify your deductions (like transportation, office supplies, etc. – expenses needed to generate income). Since I knew my gross income before deductions was low enough to report as is without calculating deductions, I just did that. Hopefully next year I will happily fill out form 1320:-).

Line 71: In fact, the 25% tax paid on work for political parties is unrefundable. Ouch indeed.

SO… My action items are:

1. find those Life Insurance annual receipts and enter the relevant number in fields 036 and 081, Line 62.

2. Find all my charity receipts and enter the relevant number in fields 037 and 237, Line 67.

3. Complete my personal details in the Yesh Lershom Pratim Adkaniim box (the third section on Page 1). Zehava had kindly pasted my sticker in the section above this.

4. Complete the Bank Details on Line 76, so they can deposit my refund (yay).

5. Submit the Doch with spouse’s Tofes 106, Life Insurance original receipts, charitable donations original receipts, and tofes 1320, to the Information Window at mas Hachnasa, 216 Rehov Yaffo, sixth floor. Get it stamped and get a Meushar certified copy.

6. Do all this before June 1.

PS I see that last year’s entry might be helpful too:

http://atzmai.wordpress.com/2009/04/28/mas-hachnasa-advice-hours/

http://atzmai.wordpress.com/2009/05/22/mazal-tov-submitted-hatzharat-hon-and-doch-shnati/

Here’s a site/page that looks good too:

http://www.plusfinances.com/Income-tax.html

PS from this page: http://atzmai.wordpress.com/2008/06/26/bituach-leumi-take-two/ I learned that I am actually probably paying 148 NIS a month to Bituach Leumi. I should review this blog more often!


“Many Happy Returns!”

May 13, 2010
Helping You to Keep the feeling of “Many Happy Returns!”
Guidance Bureaus open at your service
The assistance bureaus for guidance in filling out form 1301 (Annual Tax Return) are open for use by those required to complete an annual return (form 1301) in the offices of Mas Hachnassa around the country, from 2:30 to 6:30 PM Sun through Thu (except erev chag and chag).
The bureaus will be open until June 10, 2010, the Tel Aviv (Shefa Tal street #12) and Gush Dan offices will be open until July 29 2010.
Eilat offices open only Mondays and Wednesdays, Ramle offices open only Sundays, Tuesdays and Thursdays.
Translated by Mr Atzmai.Wordpress from

More about the big decision – zair, murshe, or what?

February 23, 2010

Some one else posed this question and I am posting it here, with my answers interspersed. Hope it hopes him and you!

Dear Gidon:

I have been reading your blog about succeeding as an “Atzma’i” for advice about my situation. I am a 24 year old recent oleh from Boca Raton, FL now living in Jerusalem.

>>Welcome! my sister is from Boca, we should compare notes..

I am in the midst of my enlistment process for the IDF, having already hope to be drafted in the summer.

>>Behatzlacha rabba on that too!

In the meantime, I’ve been hired as an outside contracted translator for a consulting firm based in Tel Aviv, on a part-time basis. My employer says that her company can only pay me if I open an “Osek Za’ir” file, because I am not a company employee and they do not want me to be entitled for full employee benefits.

>>They are thinking inside the box that they know.  The know that they do not want to hire you, for the reason you mention and maybe others. They know that they have to work within the framework of the law, so they cannot pay you “under the table.” They realize that they will not be paying you so much that it would make it worth your while to open up a tik as osek mursheh, and they are familiar with the less known possibility of Osek Zair, which seems to fit your situation, so that is what they are  recommending/requiring of you.

Researching your site and speaking to other people, it seems she meant an “Osek Patur”.

>>Same thing

I intend to work at this position until my army draft, no more than 4 or 5 months. Moreover, the total salary I earn won’t amount to more than 20,000 shekels.

>>If this (or even as much as about 60K NIS) is all that you will make during calendar year 2010 in receiptable work (not as an employee, or as a soldier I would venture to guess – any position with a tlush maskoret) then they are right – you can be an osek zair, and probably should be.

I’ve spoken to some employment specialists from Nefesh B’Nefesh, and a few Jerusalem-based accountants about my status and which option of registering as an independent seeks me best. The consensus among them seems to be that I should open an Osek Patur of the “third category”- as an atzma’i- with a Koach Adam company.

>>I am not sure what you mean here. When you go to open as an Osek Patur (in the VAT office), you actually first open as an Atzmai in the Mas Hachnasa office. There, at Mas Hachnasa, they ask you what you want to do as your business, but I don’t remember categories, you just tell them Translation Services or Translating and Business related services or whatever, they don’t really care too much about small businesses that barely bring them tax income at all  .. I for SURE don’t understand this Koach Adam part..

(One account told me to look up a Jerusalem-based company called Oleh Sapir in the white pages, which I couldn’t find) According to them, I open a file with this company, and my employer sends my paychecks to this firm, who takes a small commission to handle my case.

>>Ahh. “Oleh Sapir” is probably Yeul Sachir, a company that I am quite familiar with, and owe my loyal readers a deeper post about.  I can see how someone might call this a Koach Adam company, but it works quite differently from standard koach adam companies, like Manpower.

With Manpower, they collect potential workers for positions that they specialize in, then companies who want to hire someone to do that job but want to save themselves some headaches (interviewing, training, benefits, etc etc) and frequently for a short term contract, go to Manpower and get someone.

With Yeul Sachir, the service professionals do the services they specialize in, but they also do the marketing of their services, and have a personal relationship with the companies/people they do business with. Yeul Sachir does the finance work, bills your client and collects (with help from you) and pays you with a tlush, as you are legally their employee. They take a cut of 7% up to 400 NIS a month for their services.
They maintain that the advantages of this option include: easy opening and closing my file as an Osek Patur,

>>Actually, establishing a repationship with Yeul Sachir obviates the need to open or close an Osek Patur file at all.

no taxation on American assets,

>>I am not sure of this one

and no hassle opening my own Osek Patur at varius bureaucratic agencies while I am being interviewed by the army agencies to secure my placement.

as above, no need to interface at all with Mas Hachnasa or VAT

I am still confused about how to proceed, as I am in the dark with the Israeli tax system and bureaucratic institutions. I would greatly appreciate any advice you can give me about how to go about this.

>>Notwithstanding the extensive descriton I gave above of Yeul Sachir, since it looks like you are only going to bill about 20K NIS this calendar year, and since I assume your client will be a business, which means they do not care whether they “pay” their service providers VAT or not (because the deduct it), Rodan Gordon (principal at Yeul Sachir) would probably encourage you to open a tik as an Osek Zair.

Try calling him at 02-6510666, tell him Gidon sent you.

Good luck!

PurIm Same’ah!


How much money should you try to make?

October 15, 2009
Obviously, the answer is as much as you can.
But I have recently noticed that there are a few bureaucratic bodies who care how much I make, and charge me. And some of them charge me more if I make more than a certain amount (in some cases, they charge me nothing if I stay clear of that minimum), and some charge me more (relatively) if I make less than a certain amount.
To clarify:
VAT only “charges” me if I make more than about 60,000 NIS a year. (Yes, I realize it’s more complex than that, they don’t really charge me etc, but for the sake of my own radar, let’s keep it at that.)
Bituach Leumi charges me a minimum of about 80 or 110 NIS a month (I can’t remember and can’t be bothered to go find the paper that hinted at this number). This is even if I make 80 NIS a month, or less – even someone who is unemployed is required to pay National Insurance premiums monthly. And once you make more than 17,443 NIS a year, your premiums go up (not sure how much, but it starts at about 6% I think (that’s about 1000 [the premium you pay annually for up to the minimum income rate) divided by 17443 (the minimum income you start paying more than the minimum premium on).
Here are the other offices that care about my income as an atzmai (and even as an employee, for the most part):
The IRS: Evidently, if you are a US citizen, you are required to complete an annual tax return. In principle, you will owe no income tax if you make less than some amount (depending on number of dependents etc.) For me, this number seems to be a walloping $70,000 or $90,000, whatever, they are both pie in the sky right now. BUT, you are entitled to up to $1000 per child rebate (I use the good help of Jeff Melamed for this http://groups.yahoo.com/group/ustaxreturnREFUNDS/). That “Up To” depends on your income. When you start making less than a certain amount, then your rebate per child is less. This depends on the number of kids you have etc. etc., my “aim for” amount to get the the maximum is about $46,000 a year household income.
FBAR: This requirement is not a tax, it is simply a reporting requirement. If you have a cumulative balance of more than $10,000 in all of your overseas (i.e., not USA) accounts, including banks, keren hishtalmut, and dunno what else, you have to report all of these accounts. You get to the cumulative balance by finding the highest recorded balance of each account for the year (say, Feb 15 for one bank, Dec 31 for the just-put-in account) and adding them up. This thingie got a lot of press this year, because it is the first time they are clamping down on enforcement, with draconian penalties threatened. (If you are interested, I checked my balances for every year since 2003, the year they are checking on since nowadays, and I was only on their radar for 2 of those years). (This link is a good start if you haven’t heard about this until now: http://muqata.blogspot.com/2009/06/us-citizens-in-israel-have-you-filed.html)
Doch Shnati: As I have blogged here before (most of this blog is about this), if you keep pretty good records of your income and your spouse’s income, then go ask for help towards the deadline during Mas hachnasa’s free advice hours, you should be OK. BTW, for me, I think I would have had to staert paying Israeli Income Tax at household income of no less that 200,000 NIS a year.
So, if you have the same factors as me, then here are the annual numbers that raise a flag:
17,443 NIS – what to aim for if you want to pay the lowest amount percentage and cash-wise for Bituach Leumi.
60,000 NIS – when an Atzmai moves from being an Osek Patur to an Osek Mursheh.
$10,000 – FBAR reporting requirement
$46,000 – household minimum to get the maximum Child Tax Credit refunds
200,000 NIS – start paying Israel Income Tax (Mas Hachnasa)
$70,000 – start paying US Income Tax
DISCLAIMER: I wrote most of the above from my own limited knowledge, with barely even using Google. I hope I haven’t made any glaring mistakes, and I will appreciate any corrections and additions.
Comment away!

Obviously, the answer is as much as you can.

But I have recently noticed that there are a few bureaucratic bodies who care how much I make, and charge me. And some of them charge me more if I make more than a certain amount (in some cases, they charge me nothing if I stay clear of that minimum), and some charge me more (relatively) if I make less than a certain amount.

To clarify:

VAT only “charges” me if I make more than about 60,000 NIS a year. (Yes, I realize it’s more complex than that, they don’t really charge me etc, but for the sake of my own radar, let’s keep it at that.)

Bituach Leumi charges me a minimum of about 80 or 110 NIS a month (I can’t remember and can’t be bothered to go find the paper that hinted at this number). This is even if I make 80 NIS a month, or less – even someone who is unemployed is required to pay National Insurance premiums monthly. And once you make more than 17,443 NIS a year, your premiums go up (not sure how much, but it starts at about 6% I think (that’s about 1000 [the premium you pay annually for up to the minimum income rate) divided by 17443 (the minimum income you start paying more than the minimum premium on).

Here are the other offices that care about my income as an atzmai (and even as an employee, for the most part):

The IRS: Evidently, if you are a US citizen, you are required to complete an annual tax return. In principle, you will owe no income tax if you make less than some amount (depending on number of dependents etc.) For me, this number seems to be a walloping $70,000 or $90,000, whatever, they are both pie in the sky right now. BUT, you are entitled to up to $1000 per child rebate (I use the good help of Jeff Melamed for this http://groups.yahoo.com/group/ustaxreturnREFUNDS/). That “Up To” depends on your income. When you start making less than a certain amount, then your rebate per child is less. This depends on the number of kids you have etc. etc., my “aim for” amount to get the the maximum is about $46,000 a year household income.

FBAR: This requirement is not a tax, it is simply a reporting requirement. If you have a cumulative balance of more than $10,000 in all of your overseas (i.e., not USA) accounts, including banks, keren hishtalmut, and dunno what else, you have to report all of these accounts. You get to the cumulative balance by finding the highest recorded balance of each account for the year (say, Feb 15 for one bank, Dec 31 for the just-put-in account) and adding them up. This thingie got a lot of press this year, because it is the first time they are clamping down on enforcement, with draconian penalties threatened. (If you are interested, I checked my balances for every year since 2003, the year they are checking on since nowadays, and I was only on their radar for 2 of those years). (This link is a good start if you haven’t heard about this until now: http://muqata.blogspot.com/2009/06/us-citizens-in-israel-have-you-filed.html)

Doch Shnati: As I have blogged here before (most of this blog is about this), if you keep pretty good records of your income and your spouse’s income, then go ask for help towards the deadline during Mas hachnasa’s free advice hours, you should be OK. BTW, for me, I think I would have had to staert paying Israeli Income Tax at household income of no less that 200,000 NIS a year.

So, if you have the same factors as me, then here are the annual numbers that raise a flag:

17,443 NIS – what to aim for if you want to pay the lowest amount percentage and cash-wise for Bituach Leumi.

60,000 NIS – when an Atzmai moves from being an Osek Patur to an Osek Mursheh.

$10,000 – FBAR reporting requirement

$46,000 – household minimum to get the maximum Child Tax Credit refunds

200,000 NIS – start paying Israel Income Tax (Mas Hachnasa)

$70,000 – start paying US Income Tax

DISCLAIMER: I wrote most of the above from my own limited knowledge, with barely even using Google. I hope I haven’t made any glaring mistakes, and I will appreciate any corrections and additions.

Comment away!


A Little IRS/Mas Hachnasa Dovetail

July 1, 2009

Yesterday was the last day to submit the FBAR (see http://muqata.blogspot.com/2009/06/us-citizens-in-israel-have-you-filed.html). I had heard a tiny bit about it over the past few weeks, maybe even got an email or two from a few friends, but there was certainly not enough buzz about it here in Israel (think 2008 US Presidential Elections) for me to actually look into it. But then I read the blog post I referred to earlier int his post, spoke to a neighbor, and decided I better file.

Now, first of all, I have a little experience filling out US tax type forms, as I’ve done some administrative work for a lawyer, so I’m familiar. And of course, as you know, I recently submitted an Israeli Hatzharat Hon assets declaration. I expected this FBAR to pretty much take the same info about my bank accounts and other accounts (like kupot pensia and hishtalmut) that my Hatzharat Hon did. And – I think I was right!

The form did not take 20 minutes as the “time burden” notice on it claimed, closer to an hour or two, but had I not submitted a Hatzharat Hon a month or so before, I would either have given up, or given that I was afraid of a $10K fine(!), I would have gone crazy.

An observation: if you really have your life in order, knowing your budget and sticking to it, documenting what needs to be documented, etc., then you don’t get surprised too much. In fact, you get happily surprised sometimes.
What do you think? Leave me a comment.


New Ptor from Mikdamot

June 21, 2009

I got a notice in the mail saying:

Re: Postponement (Hash-hayah) of Increase of Prepayments for Tax year 2009

Your 2008 tax return was received in your file.

We see that it justifies increasing your pre-payments to 16%

according to clause 180 B 1 in the Income Tax Code.

Please check the correctness of these details, because if you do not do so by 3 July 2009, that increase will be activated.

Now, this surprises me, because, as my loyal blog readers know, I made much less than the 50,000 NIS ceiling requiring pre-payments (in fact, requiring payments at all!), and I was told that I would NOT need to make prepayments.

I assume this is just the system justifying itself.

Anyway, I found a great blog that explains what to do in plain English:-), so I found the post that talks about submitting a request for an exemption (ptor) from prepayments. Unfortunately, I had not written the name, phone number, or fax number of the person I needed to be in touch with, so hoping that she won’t retire by next year, here is the info:

For Jerusalem area small businesses (NOT Jerusalem itself!) you have to use Pkid Shuma Yerushalayim Shtayim (#2) which is near the Tachana Merkazit (actually, next to Center One)

Hebrew info page:  http://ozar.mof.gov.il/taxes/cities/jeru.asp

So I filled out the form 2216/א at http://www.mof.gov.il/taxes/tfasim_mas.htm, called 02-5019203, spoke to Gilad (probably Tekoa, the Deputy Tax Assessor) who told me to send a fax to “Attention: Dafna” at 02-5019250.

My guess is that that will do the trick.

I will bli neder report back here when I get the official letter saying that in fact I am exempt from prepayments, or if they decide that I must prepay.

If anyone wants me to spend time translating Form 2216A, please ask.


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