Taxes and Bituach Leumi Questions

amother

Tue, Oct 21 2014, 7:43 am

Okay, here's the deal- I officially made aliya a bit over a year ago. I have been working as an independent contractor through the US for the past couple of years while living here in Israel. My work in the US is all completely legal, but here they haven't asked anything about my work or taxes, so I haven't dealt with anything. I would love to get it all on the books here as well, but I'm not sure how. I have an accountant in the US doing everything there, so I guess I need someone here, too, if I can't do it myself- anyone have any opinion on that or recommendation? I was told since I pay tons of taxes to the US, I will have to pay very little if anything here- anyone experienced with that kind of thing?

Also, what's the deal with bituach leumi? I think for the first year after aliya I didn't actually have to pay, but now I think I do- anyone know if that's the case? I haven't heard anything from them ever though. I also just had my first baby. I'm not sure how maternity leave works though since I work in the US and get a different amount every month. Should I just go into the office with my tax information from last year and ask them what to do about it? Or with my payment receipts from the past few months? Will they actually give me anything based on any of that? I have really no clue how any of this works, but I figured better off trying to get it all figured out before it gets even more complicated... Thanks!

e1234

Tue, Oct 21 2014, 8:05 am

I think you need to first be atzmai here

then you pay taxes here and not in the US

I am atzmai

so I pay mas hacnasah and bituach leumi here
I pay social security to the US (no tax as mas hachnasah is paid here)

I also pay mam as I an self employed and issue receipts

Becuase I pay bituach Leumi I got 14 weeks maternity leave (based on that years income)

Dev80

Tue, Oct 21 2014, 8:09 am

I don't know the tax things but you are correct that bituach leumi is free for the first year, now you will start having to pay. Payments are generally every 3-4 months for the previous months, so you may not get anything in the mail regarding payments for a few months. They generally send out a little booklet with what you owe for the year but we haven't gotten ours lately so I don't know if you want to rely on that. If you will anyway be going down there you can sort that you.

hila

Tue, Oct 21 2014, 8:16 am

If you are earning in the US then you need to pay BL and tax here. Both are according to how much you earn.
There is a reciprocal agreement between mas hachnasa and the IRS .
How there is no such thing as this between SS and BL.
You have to pay both according to ISraeli law. So yes - get a good accountant to work out how much.

(we just got hit by a very large bill because my dh's Israeli accountant "forgot" about BL for 2.5 years.)

amother

Tue, Oct 21 2014, 9:02 am

OP here- does BL get their info from mas hachnasa, or directly from me? Can I deal with just BL for now, and deal with taxes at a later date? Or can I deal with BL later, and both pay and get paid the same way I would have if I were up to date?

For taxes, can anyone recommend a good accountant, preferably one that is familiar with and able to deal with both US and Israeli taxes simultaneously? Does that even exist? Any clue how much it would cost?

amother

Tue, Oct 21 2014, 9:08 am

I would advise you to speak to an accountant who is well versed in both Israeli and US tax accounting.

According to current regulations if you are a resident here, Israel gets first bite. There is currently a tax amnesty program which may (or may not) be applicable to your situation. Your US tax returns for the last 3 years can be amended if necessary.

If you are paid with a 1099 than you will probably have to open a tik as an atzmai and this will be your Bituach Leumi status.

Mazel Tov on your new baby - once you are registered with BL you should start receiving kitzvat yeladim - I think it's 140 for one kid.

amother

Tue, Oct 21 2014, 9:18 am

We have just started to work with Rivka Bitton. She made a good impression on us and speaks perfect English. Not cheap.

Rivka Bitton CPA(US,Israel)
Tax Manager
ABOULAFIA AVITAL SHRENSKY&CO.
Incorporating Feldman Brody & Co.
Certified Public Accountants

Email: _rivkab@aboulafia.co.il

15 Kanfei Nesharim St., Beit Hateomim Bldg., Floor 1
Jerusalem 9546427, ISRAEL
Tel: 972 2 651-5155/629-4272
Direct: 972 2 _646-9872
Fax: 02-651-5185

amother

Tue, Oct 21 2014, 9:31 am

Quote:

We have just started to work with Rivka Bitton. She made a good impression on us and speaks perfect English. Not cheap.

Can you possibly be a bit more specific about how "not cheap" we're talking? 500 NIS? 1000 NIS? 10000 NIS? I really have no clue what to expect.

amother

Tue, Oct 21 2014, 10:12 am

OP again- I just realized I have worked like 2 hours/week to keep one of my jobs active- does that mean BL won't give me anything in terms of maternity leave anyway? The other jobs, I have no proof of when I did the work- just when I send in the invoices, so how does that work in terms of maternity leave?

amother

Tue, Oct 21 2014, 11:57 am

amother wrote:

Quote:

We have just started to work with Rivka Bitton. She made a good impression on us and speaks perfect English. Not cheap.

Can you possibly be a bit more specific about how "not cheap" we're talking? 500 NIS? 1000 NIS? 10000 NIS? I really have no clue what to expect.

Sorry I can't be more specific - we are doing many years of returns with her and she gave us only an estimate as she hasn't seen all our papers yet.

Some accountants will quote you a price per hour and some will give you a price per project and they need to at least estimate how much time it will take them.

All I can say is the sooner you do it all the less it will cost you in the long return; too bad I didn't take my own good advice.