Top 10 Tax Topics For Israelis Moving To The U.S. This Summer

Many Israelis moving to the U.S. do so without thorough planning, often falling victim to double taxation issues. They aren’t at fault, though. Many don’t even know what to ask about or plan for before the move.

These are the top 10 topics we make sure our clients clarify before they move, helping them avoid a failed relocation to the U.S.

UNDERSTANDING YOUR TAKE-HOME SALARY

When moving from Israel to the U.S., one of the most critical aspects to understand is your take-home salary. Many individuals receive attractive salary offers without fully grasping how much will end up in their bank account. How can you possibly budget your expenses without knowing how much net income you will actually be making? Federal, state, and sometimes local taxes will significantly reduce your take-home pay.

In addition to your base salary, you might be offered bonuses, living arrangements covered by your employer, or other fringe benefits. While these perks are excellent and should not be turned down, they are typically considered taxable income in the United States. This means that the value of these benefits will be added to your gross income, reducing your net take-home pay.

Lastly, the first and second years of relocating to the U.S. may be treated differently regarding taxation, resulting in two very different take-home figures. Understanding these distinctions and planning accordingly is critical to avoiding surprises and managing your finances effectively during your transition.

STATE TAXES

Understanding state taxes is the next important topic to consider when moving from Israel to the U.S. Many focus on other factors when choosing where to live, such as the quality of schools, housing costs, and community amenities. They often don’t understand the different state tax implications that come into play.

Different states have varying tax rates and regulations, so it’s essential to consider your destination’s specific taxes. The state you move to will significantly impact your net income, as state taxes can vary widely from one location to another.

Another important consideration is that you don’t necessarily need to live in the state where you work. For example, many people working in New York choose to live in neighboring New Jersey. The Israeli community in Tenafly is excellent for our N.J. crowd, but don’t worry; you can also move to Hoboken or Fair Lawn without feeling bad about it