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!


My First Foray to Bituach Leumi

March 23, 2008

After doing Step One, opening up a Tik Osek Patur at VAT, then pretending that I don’t have to go to Mas hachnasa because they automatically sent me some papers, then not printing a receipt book as they told me to because I didn’t find the best solution yet, I finally got around to going to Bituach Leumi.

Here in Maale Adumim, we have a few government satellite offices that are a best kept secret. For example, the Misrad Hapnim branch gives [95% of] the same services you get at the Jerusalem Helene Hamalka main branch, with 1% of the line/queue and 500% of the niceness. I have been in Bituach Leumi offices in JM and in the one here in MA, and would guess the numbers are about the same if not better. Except that the MA BL branch is only open 8-12:30 Wednesday morning.

Anyway, I had some previous business (you could say run-ins) with Bituach Leumi, but I figured that with a little expectations clarification (tiyum tzipiyot – one of my favorite things), we could get onto the same page, with me getting what I want and them getting what they want.

So what did I want?

  1. To clarify my status as a low-income “oved atzma’i,” a “lo-sachir” ( or perhaps “atzma’i ve-eino-sachir”).
  2. To clarify the points at which the premium rates change.
  3. To figure out how I can assign myself to the lowest possible bracket.

What did they want?

  1. For me to fill out Form 6101 (Din Vecheshbon Rav Shnati = Multi-Annual Report), based on my self-definition as an “oved atzma’i,” fulfilling one of the following three conditions:
    a. Works at least 20 hours a week on average.
    b. Monthly average income is at least 50% of the national average income.
    c. Works at least 12 hours a weekand have an average monthly income of at least 15% of the national average income.

We spent about an hour each asking for the above from the other, and not getting it:-(

What I did get was a print out of my statement from Feb 1 2000 through Mar 19 2008.
On my way out, I called a friend of mine who has worked in bookkeeping/accounting for the past decade or so, to see if he could help me get the info that I was after, seeing that it didn’t seem to be a national security secret issue. He chided me for not dealing with an experienced accountant (as the BL clerk encouraged/urged/required me to). I was frustrated as: A. No-one would give me a list of such accountants and B. Why should I pay an accountant $100 for an hour’s consultation when I’m going to end up an osek patur??

Anyway, I am going to stop now, and hopefully complete this story before Wednesday, when I’ll go back to Bituch Leumi (I didn’t say which Wednesday…)