Living in Israel and Working for a US-Based Employer

Commuters & Telecommuters

Making Aliyah and Working for Employers Based in the US

Advantages

• Salary

• Continuity of employment

• Flexibility during the day

Challenges

• Working US hours

• Self-discipline

• Isolation from colleagues, in Israel and abroad

• Not integrating into the Israeli workforce and society

Tips for Making It Work

• Having the family’s support • Using “cutting edge” technology• Creating a home office environment • Maintaining balance • If you are the boss… • Volunteering

Negotiating With Your Boss

• Write a proposal to your employer, emphasizing the advantages

• Point out that working remotely is becoming increasingly popular

• Be flexible • Don’t be afraid to ask!

Taxation Issues

• The tax reform gives you a 10 year exemption on foreign-earned income

• Carefully structure your telecommuting arrangement

Scenario 1: Working in the US

• Taxpayer is physically working in the US

• Taxpayer does no work while in Israel

• Domiciled (center of life) in Israel• Aliyah after January 1, 2007

Taxes: Working in the US

• Taxes in the US– No foreign-earned income exemption– Pay State taxes, though a non-resident

• Taxes in Israel– 10 year tax exemption– No need to report income in Israel

Scenario 2: Working in Israel

• Taxpayer physically working in Israel

• Taxpayer does no work in the US

• Domiciled (center of life) in Israel

• Made Aliyah after January 1, 2007

Taxes: Working in Israel

• Taxes in the US– Claim either foreign-earned income

exemption or foreign tax credit– Do not need to pay State taxes

• Taxes in Israel– Pay Israeli taxes (revenue generated in

Israel)

Scenario 3: US and Israel

• Taxpayer physically working both in Israel and the US

• Domiciled (center of life) in Israel

• Made Aliyah after January 1, 2007

Taxes: Working in the US & Israel

• In the US– Claim foreign-earned income exemption or

foreign tax credit on a pro-rated basis– Pay State taxes on a pro-rated basis

• In Israel– Pay Israeli taxes on portion of income

generated in Israel– Do not need to report US generated income– Taxpayer can plan to take advantage of status

to apportion income– Work does not need to be apportioned based

on physical presence

Thank You…

• Thank you to Aron Epstein of KR Marsh CPAs for his assistance!

• Email: [email protected]

• Phone: (02)643-9258

• VoIP: (646) 201-9286

Questions? Ask NBN!

• Email: [email protected]

• Facebook: NBN Employment Dept. Group

• LinkedIn: NBN Employment Group

• Twitter: @RachelBerger

• Personal consultations in Israel and overseas