S/O Taxes... Advice needed! (American in Israel)

amother

Pewter

Wed, Mar 08 2017, 11:38 pm

I'm looking into options for filing US taxes as an American living in Israel. I paid an accountant to do it for me last year, but would love to avoid the fee! I figured I could just look at what he wrote and replace numbers with new ones. I'm self-employed if that makes a difference. Thing is, I got tons from Bituach Leumi (Israeli Social Security) this year that I didn't get last year, so I'm not so sure how to deal vwith that. I was told you could contact the IRS directly with questions. Anyone done that? Any of the free/cheap sites/programs good for those living (and paying taxes and getting benefits) abroad? Am I better off just paying to have it done again this year? What think all of you?

grace413

Thu, Mar 09 2017, 5:54 am

I'd suggest you get an accountant. Rules change from year to year so it's not a matter of just copying different numbers.

Returns involving American citizens living in Israel (or other countries) are more complicated than those of US citizens living in the US. There are several ways of doing things and only an accountant can figure it out for you.

The IRS is not concerned with you paying the least legal amount of tax possible. I wouldn't depend on them to get you the best deal.

Your best bet is an accountant familiar with both Israeli and US taxes.

theoneandonly

Thu, Mar 09 2017, 7:39 am

As an accountant in Israel...
It depends. Do you file and pay taxes in Israel? There are accountants who can do Israeli and American taxes for you which would be cheaper than paying for each separately.
Bituach Leumi may or may not be taxable, depends what it was for.
I remember hearing you can't get Turbotax for free if you live overseas because the free version doesn't have the forms you need.

I was actually starting to write a response about how it's not necessarily so complicated and here's what to look out for, but when thinking about foreign earned income exclusion vs. foreign tax credit vs. child tax credit I realized that it's not so simple...

BabsB

Thu, Mar 09 2017, 9:42 am

The fee may feel high now, but it will feel much better than paying for a mistake.

I agree with the above posters that you should hire someone again. Is there a reason why you don't want to return to the same preparer?

amother

Pewter

Thu, Mar 09 2017, 1:41 pm

Thanks, everyone. Some good points. The only reason not to go with the same preparer is I don't feel like paying someone to do something I think I should be able to do myself. I pay taxes in Israel, but still owe Social Security to the US. So it seemed like he just wrote I paid to Israel _, so I need to pay the US _, but my kid gets me $1,000 less, so I end up getting back _ of what I paid. Which seemed not so difficult. But the Bituach Leumi threw me. My husband wanted to do the Israeli taxes himself, since that looked pretty self-explanatory to him. (He's more fluent in Hebrew and I'm more fluent in English.)

amother

Rose

Thu, Mar 09 2017, 3:29 pm

amother wrote:

Unless you have experience with preparing a 1040 for someone who earns income in another country - its not something that you "should be able to do" yourself.

~signed someone who works at a very large accounting firm and knows how complicated it can be.