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Ever wonder why there’s so much “off the books” work in Israel? It’s estimated that around 20–25% of Israel’s economy operates in the shadows. That’s roughly double the European average (10–15%) and three times higher than in the U.S. (about 8%). But it’s not what many think. It’s rarely about living luxuriously or dodging responsibility. For many people, it’s simply a survival mechanism - a way to make ends meet when official earnings don’t stretch far enough, or when they l

Besides for Real Estate, what other options do Israelis find as tax advantaged income? When even at moderate income levels half of every additional shekel from your job may disappear to income tax, Bituach Leumi, and mandatory savings, it is natural to start looking for smarter and more efficient ways to grow money. Below are several alternatives that many Israeli investors explore. 1. Private Lending (Hard Money or Peer Loans) Many Israelis now lend money to small businesses

Ever wonder why Israelis are so obsessed with real estate investing, seemingly far more than people in the U.S.? There’s a simple reason: the tax system practically pushes them into it. Once your salary crosses about ₪40K–₪50K per month, your combined income tax, Bituach Leumi, and mandatory pension/Keren Hishtalmut withholdings can reach 50–60%. For every extra shekel earned, more than half disappears before it hits your account. So what do smart, frustrated professionals do

Israeli salaries quickly hit the 50% tax wall, here's how: Many professionals are surprised to learn that Israel’s top marginal tax rates kick in at income levels that would be considered only upper middle class in the U.S. By around ₪40,000–₪50,000 per month in salary (roughly ₪500,000–₪600,000 per year, or $130K–$160K USD), employees begin losing about half of every additional shekel to taxes and mandatory deductions. That 50% figure comes from: Income tax up to 47–50% Bitu

One of the biggest financial benefits of Aliyah is not paying $20–30K per year for U.S. health insurance, right? Wrong, most of the time. In the U.S., that $20K–$30K figure is the total annual cost of a family plan. But if you worked as a professional for a large company, you probably never paid most of it yourself. Your employer did. That employer-sponsored plan was worth about $20,000 a year and was one of the biggest hidden parts of your compensation package. When you move

One of the biggest mistakes people make while considering Aliyah from the US is this: Not hiring an Israeli accountant to put together a projection of what their gross income and take-home pay will truly be after switching to an Israeli job.  Here are some of the surprises that come up: First of all, depending on the industry, your paycheck may be cut by 25%--75%, mostly depending on the industry.  Next, while most people know generally that there is a much higher income tax

AI Creates experts who don't know what they're talking about. Listen to this story: A foreign investor recently sent me a link, convinced he had found a way to avoid U.S. tax on his real estate sale. The article was about a certain kind of interest and withholding, which applies only when a U.S. borrower pays interest to a foreign lender. It has absolutely nothing to do with selling property. Sounds smart until you realize it’s completely irrelevant. Before AI, people misunde

Many Jews are reclaiming Polish citizenship to reconnect with their roots, without realizing it could one day put them at legal risk for what they post online. Every year, more descendants of Polish Jews apply for citizenship by descent, often to gain EU mobility, work rights, or reconnect with ancestral roots.  For many, it feels like an act of historical restoration. But few realize that it also carries a quiet, serious legal risk. When you hold Polish citizenship, you are

Of all EU citizenship by descent options, Austria’s is likely the easiest for eligible Jewish families. If your parents, grandparents, or great-grandparents were Austrian citizens, or even just residents of Austria who fled before 1955 because of persecution, you and your descendants can usually restore Austrian citizenship directly. Even if the ancestor never held Austrian citizenship formally but lived in Austria temporarily, including in a postwar DP (Displaced Persons) ca

Believe it or not, it’s not unheard of for there to be a stateless Jewish child born in Israel. Some U.S. expats in Israel choose not to apply for Israeli citizenship for one reason or another. That generally works fine for long term living, with a few minor limitations, but day to day life goes on. Their children can also grow up with the same residency status. But when those children get married, things can suddenly get complicated. Imagine two U.S. citizens, both raised in

Imagine being an American, having a baby abroad, and learning your child has no citizenship anywhere on earth. Not Emirati. Not American. Just stateless. Everyone loves the story of the glamorous expat life: tax-free income, warm weather, luxury towers, and private schools. But almost no one talks about the legal void underneath it all. In the Gulf, even after 20 or 30 years, your entire life still rests on a temporary visa tied to a job. You can’t vote, can’t naturalize, and

“We’ll just use the Israeli passport - no need for U.S. citizenship.” I hear this a lot from U.S. expat parents. But here’s the thing, under U.S. law, citizenship isn’t optional. If a U.S. citizen parent lived in the U.S. for at least 5 years (including 2 after age 14), their child is automatically a U.S. citizen from birth. Even if you never applied for a Consular Report of Birth Abroad (CRBA). Even if the family lives permanently in Israel. So when that child travels to the

When people think a service sounds “expensive”… I sometimes hear comments like: “Wow, that’s a lot. If you divide it by the hours, you must be making a fortune!” What most people don’t realize is that when you run a business, a large percentage of what you earn goes straight to business expenses: software, licenses, insurance, compliance, staff, office rent, equipment, travel, and of course taxes on profit.  Factor in slow seasons as well as hours spent working on the busines

Just because your wife's late Uncle Fred the CPA decided on a certain tax strategy for you back in 1998, doesn't mean it's a good idea anymore. Someone came to me and asked me to look over his self prepared personal return and partnership return.  Turns out he had been following his Uncle Fred's strategy faithfully after he passed away. Each year, he simply filled out standard PDF tax forms to self-prepare and replicate the strategy each year.  The strategy was to file the wi

Here's a great hack to circumvent the long processing times the US embassy in Israel takes for issuing social security cards for children. You can add thousands to your child tax credit refund or pay thousands less in taxes by making the deadline. You can also avoid having to mail passports or other critical documents to the US.  Here's the best way to do it: 1) Apply for a passport card, both for you and your child.  While passport cards are only valid for limited land or se

Ever tried budgeting for your regular family expenses but it just didn't work? For many large families, especially those with simple lifestyles with strong religious values and large private schooling expenses, there isn't much leeway to cut expenses each month.  Their main focus should be increasing income, not painstaking nitpicking of spending categories each month. Most of these families who try detailed budgeting end up stopping within a few short months, either due to d

“Can I use my Kollel stipend to qualify for the Child Tax Credit refund?” Almost every week or two, I get that exact question from U.S. citizens in Israel. The answer in almost all cases is no, and the reason has nothing to do with religion. It’s about the IRS definition of earned income. To qualify for the refundable Additional Child Tax Credit, your income must be compensation for services performed.  That means: A clear role with specific, measurable duties. Supervision or

Using 529 Plans While Living Abroad: What Actually Qualifies? If you're a U.S. citizen living overseas with a 529 college savings plan, you may be surprised by what expenses are considered qualified, and where the lines are still unclear. Here is a quick breakdown: K–12 Tuition Abroad: Qualified since 2018, up to $10,000 per student per year (rising to $20,000 in 2026). This includes private, public, or religious schools outside the U.S., such as Chadarim, Bais Yaakovs and ye

Made Aliyah with a large 529 education plan? Here's what you need to know Many U.S. citizens who move to Israel have significant savings in 529 college plans for their children. But once you're living in Israel, a critical issue often arises: Israeli K-12 schools may or may not be eligible depending on the interpretation of the unclear laws. If you want to be conservative with legal unclarities, your options are limited.  For postsecondary education, while some of the larger

What would you do? Someone needed to have an ITIN application prepared for a joint filing with a non-US citizen, non-US resident spouse. The tax return which is filed along with it was prepared by another accountant. This happens all the time. Often, their US based accountant who isn't proficient in expat laws fails to claim the foreign income exclusion or foreign tax credit, and leaves out Schedule B for foreign accounts. They forget to ask about FBAR reporting as well. Wors