Mazal tov! Submitted hatzharat hon and doch shnati

After my first visit to the Tax Authorities for initial guidance session a few weeks ago, I realized that my thirty day extension was coming to an end, and i should go back for a hopefully final guidance and assistance session and submission.

I could not get through to verify what the hours were, I assumed it would certainly be open at least til noon. When I arrived, the guard said guidance hours were from 4-6pm , no day hours. Well, I decided to try my luck.

Of course, it wasn’t luck, just preparing. Since I made friends with Meni the last time, I went straight to him and asked him if he could help me a bit even though it’s not helping hours. He squirmed a bit, but said ok, while he’s doing other stuff. I thanked him profusely, and proceeded to have what seemed to me to be a regular helping session:-)

First we finished the doch shnati annual tax return.

My situation is relatively easy. I had all of my income through my receipt book, less than the taxable minimum, so the grand total went into one field for that.

My wife has a salaried position, so I had her tofes 106, annual income summary.

On this tofes 106, there are descriptions of payments or deductions, the amount for each, and the Code of each.

Meni told me to look for each Code on the tax return form, and copy the amount into the field of that code.

Simple as that!

I signed it (the employee spouse did not need to sign it), showed it to Meni, he said it’s good to go.

By then, Meni had to go into a meeting with his Boss, so he handed me over to an equally nice colleague of his, Ilan, who would help me with my hatzharat hon, net worth declaration.

(To remind you, the hatzharat hon is taken every five years from atzmaim to see in general terms if you have a lot more stuff than you should based on your declared income since your last hatzharat hon. For me, this was my baseline.)

Ilan took my folder (actually, I prefer plastic A4 sized sleeves) of anything dealing with insurance and savings, looked at each page, said “submit this” and put an X next to what I need to submit (usually a sefach tear-off) or “this is not relevant.”

Then he said to add up all the amounts he X’ed, andd list them as a summary under Insurance.

Luckily, I had brought my latest mortgage mashkanta statement, which he said to submit and list under Debt.

I also sumitted the Report of Dec 31 Bank Balance which I got for free from Bank Hadoar, and had to pay 55 NIS to Bank Discount for ($%$*!!!)

Then I wnt to photocopy everything I was about to submit the original of (30 agurot a copy, machine returns change, no line), and then helped someone who thought I worked there with her Tax Return. I told her, here is a case of the second grader teaching the first grader:-)

Then I took my two forms and attached documentation to the Inforation and Submission clerk, he nicely took and stamped it (even though I was about 3 minutes after his break was to start) and That’s It!

Sorry for not scanning or otherwise finding the Hatzharat Hon form and Tax Return form and annotating them, but hopefully this rambling post will help you.

Mas Hachnasa advice hours

Sorry for not posting in such a long time, I hope this post will make up for that a bit.

Around February of this year, I got a form in the mail, a Hatzharat Hon (declaration of wealth/assets). I was at the Tax Authority (Rashut Hamissim) for something else, so I found a pakid who I could talk to about that. He basically said I have until May to fill it out and return it, so I immediately filed it in the “don’t think about until April” part of my brain.

About a week or two ago, I got about five forms in the mail, which looked like a tax return with a few appendixes. Since I had hit Snooze on my Hatzharat Hon alarm in my brain a few times, I figured I’d better get cracking.

So I  opened both forms, put a little “X” next to the lines that I was certain were NA (not applicable) for me (like “Profits from Owning Real Estate Abroad”); completing the lines I could easily (like “First Name”) and circling the line numbers of things I wasn’t sure of, whether requiring searching on my part (like “Balance Of Personal Bank Account On 31 December 2008”) or clarification by a Tax Authority advisor.

Then a flyer fell out of my folder, one that I picked up the last time at Mas hachnassa that I never really looked at. It said some thing to the effect of: “Free Advice Hours For Filling out Your Tax Return.” Just what the doctor ordered. However, I saw that it said “Every day from March 1 through April 30, 4-7 PM. Pessach Closed.”  Well, yesterday was April 27, today is Yom Hazikaron and tomorrow is Yom Haatzmaut, not days to expect service at government offices. So I made quick plans to go there (needless to say, calling any number I had or could find was useless). Then I saw that the flyer I had said “Mar 1 thru Apr 30 2008“! So I realized that my trip might be in vain, but I felt I had no choice.

I made not-so-good time, and arrived at Tax HQ at about 6:20 (and I still had to daven mincha:-). The guard said “you only have a few minutes left, hurry to the sixth floor.” One person was speaking with the pakid, so I was next on line. Another citizen or two arrived after me.

I spoke with Meni.

Bottom line: If you are a male atzmai, and you made less than 45,000 NIS last year, you are under the Taxman’s radar. As I thought, they won’t require you to bring all sorts of receipts etc. your declaration is enough. (A female atzmai [atzmait, actually] would ostensibly have a higher ceiling.)

Since I only had issued receipts during 2008 totaling about 12K  NIS (ok, I was busy with personal stuff, ok?), I was clearly under this radar.

BTW, Meni said, my wife, who is an employee, has a much higher ceiling – closer to 100K(!). She actually comes somewhat close to that (which is how we actually get to eat most of the year, thank God), but still low enough to keep Meni uninterested.

So all I have to do to complete the tax return (doch shnati – tofes 1301) is fill out a few lines on her side of the pages according to her tofes 106 (summary of financial statement for employees, provider by employer), and add some other income that Meni and I agreed that I should declare (via Paypal – see other post). I will come back to advisors’ hours after doing that, go over it with Meni (or whoever’s on duty, everyone I’ve met is great), finish anything else I need to on the spot, and come home and post to this blog:-)

Having such a small income, being under the Taxman’s radar, means that I don’t have to pay any income tax this year. The down side is, that I don’t get any tax rebates (they can’t refund me if I didn’t give them any).  This includes donations to tax exempt charities.

Important BTW – the deadline this year has been extended to May 30 2009. Whew!

Bottom line: Being an Osek Patur can still be costless, accountant-wise.

PS I made Mincha at the Tachana Merkazit:-)

Questions and comments are welcome!

A little update

Well, we had a small road accident, a Pesach vacation, a police headquarters relocation, a lot of other business, and good ol’ laziness keeping me from making progress here.

What I’ve done:

1. Concluded that the official Osek Zair receipt book comes in size 400 receipts only. (Isn’t that STUPID?? Anyone who is an osek zair is not going to have so many transactions by definition!) I am hoping that I’ll either find a smaller receipt book (25 receipts is a suitable number), get advice from someone that a Word or PDF receipt is acceptable, or bite the bullet and buy the 400 receipt book.

2. I’ve filled out form 2216 A (see https://atzmai.wordpress.com/2008/04/06/a-little-update-about-mas-hachnassa-specifically-getting-a-ptor-from-mikdamot/)
and scanned it and prepared the cover letter and even found the name of the Chief Tax Collector at my tx office. Now I’m waiting to find out his email address..

3. I got a comment on my first post by the well known Anglo Israeli CPA Yitzhak Treister. Hopefully he will share many knowledgeable tidbits with us!

4. I formatted a standard Sefer Takbulim Vetashlumim into an Excel spreadsheet. More on that later.

A little update about Mas Hachnassa (specifically, getting a ptor from Mikdamot)

As you might remember, i was told during my consultation at Mas hachnasa that I probably will be awarded a ptor (release) from paying mikdamot (monthly prepayments) because I expect to make less than 50,000 NIS this year.

As I wrote:

1. If you project to make less than the minimum to require tax payment, you can disregard the Pinkas Mikdamot (pre-pay tax stub booklet) and request to be relieved of prepaying at the Gvia department. (I’ll blog about my doing this, of course).

Anyway, if I remember correctly, I sent an email or filled out a contact form at the Mas Hachnasa website, and got an email back to fill out form 2216/א at http://www.mof.gov.il/taxes/tfasim_mas.htm and give to the Goveh Rashi  (chief tax collector) at the relevant office. So I downloaded it, filled it out, and started trying to figure out which is the relevant office, and who is the goveh rashi there, and how can I get this form to him in the easiest acceptable way (=fax or scan and email).

I called up the number Ms. Ciwi mentioned (quoted in my last post here) and found out that they only answer the phone between 8 and 1. Or, perhaps more logically, they will not answer the phone at any time besides then (talmudists will realize that they might not answer between 8 and 1…)

I hope to report here success in getting my ptor. Meanwhile, I continue to not pay my mikdamot, hoping that inaction now will not cause me more required action later…

A lovely time at Mas Hachnasa

After getting a tip from a member of CIWI (Connecting Independent Writers in Israel that:

The Income Tax department (mas hachnasa) is currently offering free guidance on filling out your 2007 tax return (for salaried employees) or annual report (for atzmaiim). It just started on Sunday and will go until the end of April every afternoon between 4pm and 7pm at their office on Kanfei Nesharim.

I went yesterday at 4pm and there were only two other people waiting! The clerks warned that in a few weeks it will be bedlam. (I went later last year and I remember that there were about 50 people waiting and most were not in a good mood). Therefore my advice is to go ASAP!

The clerks were relaxed and patient, and my report was completed and submitted in 15 minutes, without me paying a penny to a tax advisor.

As always before visiting a government office, you should call ahead to make sure that you know which documents you need to bring with you.

The no. for Mas Hachnasa is 654 5111.

Behatzlacha rabba and happy Purim!

I figured I have nothing to lose, free is nice. Luckily my son’s dentist appointment was pushed up to 3:10 yesterday instead of 5, so I could put him on a bus back to Maale Adumim in time for Krav Maga, and walked from Machaneh Yehuda to the Central Bus Station/Center One.

You might remember that Mas Hachnasa has a main Jerusalem branch on Kanfei Nesharim, and in fact the CIWIer quoted above pointed me to that location. But since the Center 1 office was walking distance, and I’d been told that the Center 1 spot services Judea and Samaria residents, I figure I’d give it a shot.

Sure enough, I got there at about 5:10, and the place looked abandoned. Even the wall signs announced closing times no later than 5. But someone walking out told me that I could get service on the 6th floor, room 615, and I made a beeline for there.

There was no one in that room, but the lights and the computers were on and I had a feeling they were on a coffee break. The resident of room 614 said he might be around, and was nice enough to go find him.

Well, as Ms. Ciwi predicted, no one was on line before me, and no one after me.

To make a long story short (after you’ve suffered through all this fluff:-), I learned the following things:

1. If you make less than about 50K NIS a year, and in some cases, less than 70K or more, Mas Hachnasa isn’t going to take any money from you.
2. You are strongly urged to keep good records of your business, first and foremost for your own good. If you document all business related income and expenses, you are OK.
3. If you project to make less than the minimum to require tax payment, you can disregard the Pinkas Mikdamot (pre-pay tax stub booklet) and request to be relieved of prepaying at the Gvia department. (I’ll blog about my doing this, of course).
4. If you request to be relieved of prepaying, you might be asked to provide a report/declaration of your income and expenses / profit and loss. (if you follow rule #2 above, you are covered)
5. You should keep a pinkas kabaklot (receipt book) to document your income, and a sefer tashlumim vetakbulim (payments and receivables book), and whatever other diary you keep will be good too. Again, mostly for you, and if necessary, for the taxman too.

My first official steps

After consulting with my friend Rodan Gordon and others, and spending frustrating hours on relevant websites, I made plans to open up my file in Maam and Mas Hachnasa and Bituach Leumi.

I was all set to go the the Maam ofices at Kanfei Nesharim street 66 and then to the Mas Hachnasa office at Center 1, in spite of there being a Mas Hachnasa office in Kanfei Nesharim 66, because I was led to believe that as a Maale Adumim resident, the Kanfei Nesharim Tax clerks would not give me the time of day, and I would only get service at Center 1. However, I was happily informed that in spite of the [hand written] sign in the first Mas Hachnassa office I was directed to asserting that Maale Adumim residents are persona non grata, that is only for gvia or tium mas or some other officialness that I will have to deal with in the future. Today, assured me the guard at Kanfei (who doubles as Modiin – information), I could OPEN a tik atzmaim in Mas Hachnassa here, floor three or minus one.

Then I sat down to write this entry (free electrical outlet in the entry hall at Kanfei; false Wifi though) and had a delicious Pinati choumous and ful in a pita (12 NIS to go, in spite of the sign that says 13 NIS. No, my mistake, the humus is 12, its the shakshuka that’s 13. The humus was great, but next time Shakshuka:-)