U.S. and Israeli taxes, prepared to agree
Americans living in Israel keep filing in the U.S., and many Israelis build lives and businesses in the U.S. — often holding accounts, pensions, and property in both countries. The treaty, the credits, and Israel’s new-immigrant rules all interact, and the order matters.
Who this is for
U.S. citizens living in Israel, including new immigrants
Israelis living and working in the U.S.
Owners of an Israeli company with U.S. ties, or a U.S. company owned from Israel
Families with Israeli pensions, savings plans, and property
Where these files go wrong
- 01
Israeli pension and savings accounts left off U.S. reporting because they’re “retirement”
- 02
Israel’s new-immigrant exemption treated as if it also exempts the U.S. return
- 03
Israeli tax paid but never credited on the U.S. side
- 04
An Israeli company owned by a U.S. person with no Form 5471
- 05
Years of unfiled U.S. returns from someone who moved and assumed the obligation ended
Working between the U.S. and Israel
On the U.S. side
- Annual returnAnnual U.S. return for citizens and green-card holders in Israel
- TreatyU.S.–Israel income tax treaty positions where they help
- CreditsForeign tax credit for Israeli income tax
- ReportingReporting of Israeli accounts, pensions, savings plans, and companies
On the Israeli side
- ResidencyWorldwide taxation for Israeli residents
- New immigrantsA multi-year exemption for new immigrants on certain foreign income
- Social securityNo totalization agreement with the U.S.
- Local filingLocal filing by an Israeli adviser, coordinated with ours
General orientation, not advice — confirmed for your facts in the engagement.
What we handle, start to finish
U.S. returns for expats and new residents
Forms 1040 and 1040-NR, dual-status years, foreign earned income exclusion (Form 2555), foreign tax credit (Form 1116)
Foreign account and asset reporting
FBAR (FinCEN 114) and Form 8938
Foreign company and partnership reporting
Forms 5471, 5472, 8858, and 8865
Treaty positions
Form 8833 and withholding coordination, where a treaty exists
Foreign trusts, pensions, and funds
Forms 3520 and 3520-A, PFIC analysis (Form 8621)
Catch-up filings
The Streamlined Filing Compliance Procedures for people who didn’t know they had to file
U.S. taxpayer numbers and real estate
Coordination with the foreign return
Whoever prepares the other country’s return, we make sure credits, dates, and positions match before either is filed
Three kinds of returns. One team that makes them agree.
We handle U.S. domestic returns, cross-border (U.S.–Canada) returns, and international tax returns. When a case calls for deeper expertise — in any country — we bring in hand-picked specialists who work under our lead. One team, one point of contact, one plan — and returns that agree.
- You know who is working on your file
- One plan and one price, quoted in writing
- Both returns reviewed together before anything is filed
How your file is staffed
- U.S. domestic returnsour U.S. Tax Desk
- Cross-border (U.S.–Canada)our U.S. and Canadian Tax Desks, together
- Internationalhand-picked country specialists, under our lead
- Your single point of contactFairlight
From first call to filed, on both sides
A free fit call
Fifteen minutes. Which countries, which years, what’s been filed. We tell you honestly what’s needed and whether we can coordinate the foreign side.
A written scope and price
The U.S. work and the coordination, quoted in writing before anything starts. No hourly meter.
Both sides prepared together
Each return is prepared with the same facts, and credits, dates, and positions are matched before either is filed.
Filed, and on a schedule
Both returns filed, deadlines tracked, and the next year planned — not just the one behind you.
U.S.–Israel tax, up front
Is there a tax treaty between the U.S. and Israel?
Yes. It supports credits and determines which country taxes certain income. Benefits are claimed on the return, not automatic.
I’m a new immigrant to Israel. Do I still file in the U.S.?
Yes. Israel’s new-immigrant exemption applies to Israeli tax; the U.S. return is still due every year, and Israeli income and accounts still need U.S. reporting.
How are Israeli pension and savings accounts treated in the U.S.?
As foreign accounts and, in some cases, as foreign trusts or funds with their own reporting. We review each account type before filing.
Will I pay social security in both countries?
There is no U.S.–Israel totalization agreement, so coverage follows each country’s rules. We map it on the call.
What does it cost?
It depends on the countries, the years, and the forms involved, so we quote it in writing after a short call — fixed, before any work begins. No hourly meter and no surprise add-ons.
How do we get started?
Book a free 15-minute fit call. Bring your last filed returns if you have them; if you don’t, book anyway.
An American living outside the U.S.? See U.S. expat returns for the filing rules that apply wherever you live, or all international tax.
Read our guide: U.S. Expat Taxes in Israel — What Americans Need to Know →
Ties to Israel? Start here.
A free 15-minute call, then a written scope and price. No payment until after.
The content on this page is for informational purposes only and does not constitute professional tax advice. International tax requirements depend on individual facts and circumstances and are subject to change. Foreign-country rules summarized here are general and change; your situation is confirmed in the engagement. See our full legal disclaimer.