General Information
New American tax law is not that confusing! Our Israeli clients who are corporate owners, and also happen to be American citizens (or travel to the United States frequently) already know we have American tax responsibilities. Now, we have an increased likelihood of American corporate taxes, but do not worry!

Not to worry, the 2017 American new Transition Tax is lenient: There is an offset (deduction) for this new tax that may reduce or eliminate this tax for you! Good news to follow: This 2017 deduction is in addition to the Foreign Tax Credit you already receive, but the Foreign Tax Credit will still be larger.

In Detail

When we accumulate earnings in an Israeli corporation this creates deferred income on the American tax return. This is because these earnings are not taxed year-to-year on the American tax returns when they are kept here in Eretz Yisrael. Now, this deferred corporate income may have to be taxed one time in the Transition Tax on your 2017 tax return. Nevertheless, your accumulated earnings are only part of the story. The Tax is also paired with a new Tax Deduction. The larger your Israeli corporation’s cash position, the larger your Tax Deduction will be. If you had more cash only a few years ago, the IRS will permit you to use the larger cash balance from before to receive a larger deduction now!

Call us at Weinstein & Co., Certified Public Accountants, to find out if your Israeli corporation
must report the Transition Tax!

We will check your 2017 American Tax Returns for free and let you know whether you are
protected or not.

If you did not report on the Transition Tax last year (and you hold an Israeli corporation), we can amend your 2017 American Income Tax Return to report the Transition Tax for your Israeli corporation as long as you are a U.S. citizen (or you live part-time in the United States).

Although this amendment may cause you to pay extra tax and a small fee payable to our firm, it is much better to report properly than to avoid your American tax responsibilities! To help you, we can make one of five Tax Elections on the amended tax return for you. This will
assist you by making it easier (and less expensive!) to be compliant with American laws!

Let us look at your 2017 American Income Tax Return now.

If you are an Israeli corporate owner and also an American citizen (or travel to the United States), please send us your 2017 American Income Tax Return as soon as possible: We will tell you if you need this additional American Tax Reporting.

Remember,

Even if you do have this new additional Transition Tax, America has enacted an offsetting Tax
Deduction and Tax Credit that may eliminate the tax. It is absolutely essential to report properly.