{"id":2758,"date":"2020-08-31T09:19:04","date_gmt":"2020-08-31T09:19:04","guid":{"rendered":"https:\/\/www.boaztaxes.com\/?p=2758\/"},"modified":"2020-08-31T09:19:04","modified_gmt":"2020-08-31T09:19:04","slug":"annual-american-tax-reports","status":"publish","type":"post","link":"https:\/\/www.boaztaxes.com\/en\/annual-american-tax-reports\/","title":{"rendered":"Annual American Tax Reports"},"content":{"rendered":"

In contrast to many countries, it\u2019s in fact the great USA that has a very complex tax system, based on a personal and citizenship-based<\/strong> taxation model (rather than the residency model applied in Israel and most Western countries). In practice this means that Israelis who are also US citizens are required to submit annual American tax reports, even if their income and capital is in Israel and they have already paid local taxes.<\/p>\n

This unique reporting system that ALL Americans must adhere to involves mainly completing and submitting tax forms, with a lot of personal and financial data, to the IRS. The forms and the information provided must be complete and accurate if the process is to be effective and, hopefully, free you of the need to pay taxes both here in Israel and the US.<\/p>\n

Because of the complexity of the tax return process, together with, in some cases, a lack of knowledge, some American citizens living in Israel don\u2019t know they need to submit an annual tax return or simply avoid doing it all together. However, submitting a tax return is a legal requirement and relevant for many people and cases<\/p>\n

It\u2019s important to say upfront, that when the process of submitting annual American tax returns is done correctly and effectively, that chances of paying double tax (to the IRS and the Israel tax authorities) is actually very low and most Israeli Americans never pay US tax for income and capital originating in Israel. Tax rates in Israel are generally higher than in the US, so in many cases, nothing is owed to the IRS. Of course, if someone invests financially in the USA, then they do need to pay American tax on revenue and profits generated in the US.<\/p>\n

The Boaz Reuven Law Firm specializes in Israeli and international taxation. Over the years we have developed expertise in the complexities of the annual American tax return process and the various issues regarding American taxation for private and business clients.<\/strong><\/p>\n

Which American tax reports are required?<\/strong><\/h2>\n

The most basic requirement of the US Internal Revenue Service (IRS) for ALL USA citizens is to submit 2 annual tax reports. The first is the longest and more complicated one and the second is a bit simpler. Normally, these IRS tax reports need to be submitted by April 15th<\/sup> of the following year, but it is possible to ask for an extension until the middle of October.<\/p>\n