Thursday, March 02, 2006

Death & Taxes

'Tis the season and the tax man ringeth incessantly at the front door. If you're a u.s.a.-ite I'm not enlightening you. In fact, you lugged that shoebox out of the closet last month. Yes I know it's on the dining room table and you'll get to it today. I believe you.

For all the ex-pats don't feel left out! Surprise surprise go find your shoe box too. Now that you're multi-national all sides want a little sumpin' sumpin'.

I'm oversimplifying but technically abroad-dwellers are supposed to file or risk being chased down at the local falafel stand by a bureaucrat waving a red, white and blue flag.


I don't eat falafel but being a model citizen and all I attended a lecture on Israel and U.S. taxation vis a vis North American citizens last night. Okay I'm lying. I had to be there to bring cookies and juice for the people who signed up. Another of my side jobs: bringing people cookies and juice. Okay still lying. But who cares? Of course I'll share highlights and tips - all by the way from the lecturer, an investment specialist, not me.
  1. Apparently it's okay to talk about hiding assets in Israel. When in San Fran my accountant wouldn't even whisper tax reducing tips for fear of being nailed by the IRS. Our American cum Israeli lecturer, on the other hand, blatantly talked about hiding funds, offshore accounts, money laundering (he wasn't advocating the latter but mentioned that it goes on in abundance). I was stunned
  2. If you have lived abroad for about 10-15 years or longer and have opted out of filing your American taxes you might reconsider. Apparently a designated IRS person is sitting in Washington pinpointing the 15+ year outdwellers who aren't paying up. The steadfast pencil pusher picks off 1000 Israel based evaders per month (not sure if I buy that one)
  3. Double filing can be a good thing particularly in lieu of the child tax credit. Upper income bracket earners receive the maximum $1000 per dependent
  4. According to treaties in place between Israel and the U.S. the two countries can disclose your account and holding info to each other without notifying you
  5. Once again, according to our lecturer the worst thing you can do is to go independent in Israel. Once a freelance file is open at the income tax bureau you're on the radar screen and doomed to blip-dome forever. They will hassle, nickel and dime and make life hell. Also, as an independent in Israel you pay more tax to the U.S. Better to work as a contracted hiree through an agency that takes a cut. Mental note: Arrange urgent meeting with accountant
  6. New immigrants should get into their respective professional fields and begin working as soon possible. Leave ulpan (language school) to later. This is because in the first three years income tax breaks are HUGE but once that time passes it's gone. You'll learn Hebrew at work and network at the same time (again, the lecturer speaking here)
  7. File taxes on either side of the fence with a knowledgeable and experienced accountant relevant to the taxes being addressed. It behooves you

There's much much more I could go into but won't for the sake of not entering a realm I know next to nothing about. The bottom line: Attend a lecture or informational session, call up an accountant and get advice and don't forget to file an extension if you won't make it by the 15th!


Yael K said...

Uhh wait, wait. I know I need to file U.S. taxes this year because I worked in the U.S. last year. Why should I have to pay taxes to a country I don't live in? Hmmm maybe time to give up the old american citizenship cos I ain't paying double taxes --I can't even afford single taxes!

Tamar said...

Yeah, I am with Yael here. This post scared me a little bit...

(Although, I scrolled down and read a few posts, and am not laughing out loud. Your blog is great!)

Stephanie said...

You don't pay double but regardless, my investment banker friend tells me you only get taxed by the U.S. side if you make over 70 grand...Check w/the embassy or someone in the know but don't give up the American citizenship!..AAAHHHH!!! You never know when it might come in handy...slf

Tamar said...

shit-70 grand. i have nothing to worry about :)