Many U.S. citizens living in Israel are required to file U.S. income tax returns (US TAX). Failure to comply with this obligation is considered a violation of the law.
If you are among those required to report taxes in the United States, doing so without the assistance of an American CPA who is well-versed and up to date with all applicable regulations can be extremely challenging.
At Shtainmetz Aminoach & Co. CPA, we have established a dedicated department that provides professional tax services and ongoing support by top-tier American CPAs in Israel, each with extensive experience and in-depth knowledge of U.S. tax law.
Who Is Required to File U.S. Income Tax Returns?
If you meet any of the following criteria, the U.S. Internal Revenue Service (IRS) expects to receive your annual tax return:
- U.S. citizens or Green Card holders, even if they do not reside in the United States or are not required to pay U.S. taxes.
This includes anyone who holds American citizenship—even if they have never set foot in the U.S. - Anyone conducting business activities in the United States, even if they are not a U.S. citizen and do not hold a Green Card. This includes Israeli citizens working in the U.S. (even if employed by an Israeli company), Israeli investors in U.S. real estate (read more about U.S. real estate taxation), or anyone engaged in any form of business activity such as establishing a company in the U.S.
Important Note:
Anyone who held an aggregate amount exceeding $10,000 in financial accounts outside the U.S. at any point during the year is also required to file an FBAR (Report of Foreign Bank and Financial Accounts).
This U.S. tax report must be submitted electronically and separately from the annual tax return by April 15 of the following year.
An automatic extension is available until October 15.
Failure to file the FBAR may result in heavy penalties and unnecessary exposure to U.S. tax authorities.
When Are Income and Taxes Reported in the U.S.?
In most cases, U.S. citizens report their taxes by filing an annual income tax return with the federal tax authorities (IRS). However, it is important to examine each case individually, as in certain situations you may also be required to file a separate return with the relevant state tax authority.
Reporting Deadlines Vary According to the Filing Entity:
- Individuals residing in the U.S. must file their income tax returns by April 15 of the following year. An extension may be granted until October 15.
Individuals residing outside the U.S. are required to file by June 15. An extension may be requested until October 15, and in certain cases, an additional extension may be granted until December 15 of the same year.
- U.S. Corporations must report their income by March 15 of the following year. If an extension is needed, it can be requested, and in most cases, the deadline is extended to October 15.
How Strict Is U.S. Tax Enforcement?
Let’s start with the bottom line: Do not take chances with U.S. tax authorities.
Taxation in the United States is a very serious matter. The enforcement of reporting obligations is strict and rigorous, supported by laws that require Israeli banks to report on customers who are identified—based on certain criteria—as U.S. citizens or as individuals conducting any form of business activity in the United States.
For example, an Israeli citizen holding a U.S. passport is obligated to file tax returns with the U.S. authorities and report their non-U.S. bank accounts, even if they have never visited the United States and owe no taxes there.
Due to this aggressive and precise enforcement, it is strongly recommended to use the services of an American CPA, to ensure full compliance and avoid any missteps.
What Penalties Might You Face If You Fail to Report U.S. Taxes?
Under U.S. law, failure to report is considered a criminal offense, and violators may face severe penalties. These penalties can include:
- High tax payments
- Substantial fines
- Administrative sanctions
- In some cases, even criminal prosecution.
Our advice: don’t take the risk.
Check whether you are obligated to report, make sure to file your U.S. tax return on time, and comply with the law.
U.S. Income Tax Reporting for Benefits and Refunds
Many individuals choose to report to the U.S. tax authorities in order to receive tax refunds, which may be available for various purposes such as child tax credits, higher education expenses, and more.
If you hold U.S. citizenship, it is worth checking what benefits and refunds you may be eligible for by filing your U.S. tax returns.
Easily Report to the U.S. IRS
The U.S. tax reporting process (US TAX) can be extremely complex and difficult to navigate without the help of a qualified American CPA.
Need assistance? Not sure if you're required to report? Required to file a U.S. income tax return but don’t know how?
Fill in your details for a callback or call us directly 077-7700000
We’ll be happy to assist you.
