web analytics
January 26, 2015 / 6 Shevat, 5775
 
At a Glance
Blogs
Sponsored Post


Three Mistakes that Can Get You in Big Trouble

When it comes to the IRS, out of sight is not out of mind.
Goldstein 485x300

Filing taxes is complicated. The forms aren’t particularly user friendly, and if you’re not quite sure what you’re doing you can end up making quite a few errors. The problem with errors on tax forms is that they can be very costly. For people who have multiple citizenships and residences (think olim or folks who spend a portion of the year living in Israel), the challenges of tax reporting are even more complicated.

I spoke with international tax lawyer Dave Wolf (and fellow contributor to a book on tax guidelines for American expatriates) and asked him, “What’s the worst mistake you’ve seen an expat make?”

He said: “The biggest mistake that I’ve seen expats make is believing that once they move out of America, they no longer have to report their worldwide income or report the existence of foreign bank accounts or companies.” Indeed, when it comes to the IRS, out of sight is not out of mind. It’s also important to note that if you have American citizenship through a parent or grandparent, even if you’ve never lived in America and English isn’t your mother tongue, you’re still obliged to report to the American tax authorities.

Mistake #2

Another common blunder that Dave mentioned was that people look for investment opportunities without taking into consideration the U.S. tax code. Specifically, complicated U.S. tax laws basically prevent American taxpayers from investing in overseas mutual funds. The IRS considers those investments “PFICs,” (passive foreign investment companies), and most Americans who understand how they work would not want to get involved with them or offshore mutual funds. When trying to invest smartly, lack of knowledge of international tax consequences can cost you a lot of money.

Final Mistake

The third blunder people make, Dave said, is “They either go to the wrong adviser, one who has no overseas experience, or they just don’t get any professional help at all.” I asked how you can avoid these mistakes. He said, “Make sure to consult with your tax lawyer, accountant, and/or investment manager before you leave the States to avoid any adverse tax consequences of investing or moving money overseas.” Sadly, many people overlook this seemingly small detail before making what could be one of the biggest financial decisions of their lives.

Find out more about what Dave has to say about avoiding making major tax mistakes by reading The Expatriate Guide to Managing Money and Taxes. For Jewish Press readers, get half off the regular price of the book by using the discount code JPRESS. Go to www.ExpatGuideToMoney.com and order now. The discount will expire on tax day, April 15th.

Knowledge is power, and reading this easy-to-follow guide for U.S. expats you can stay in full compliance with the law.

About the Author: Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd, a financial planning and investment services firm located in Jerusalem. He specializes in working with clients who live outside of the United States and want to maintain a U.S. brokerage account. Doug’s newest book, co-authored with Susan Polgar, about how using chess strategies to improve your finances, Rich As A King can be purchased at www.richasaking.com. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts held at Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. Neither Profile nor PRG gives tax or legal advice. Before immigrating to Israel, it is advisable to consult with a tax attorney who is knowledgeable about Israeli law. Contact at doug@profile-financial.com


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

One Response to “Three Mistakes that Can Get You in Big Trouble”

  1. Might I suggest active investment in global mining equities for very high yields. The trick is to identify small companies with world class assets upon which you don't have to recognise an income until they offer a return. You simply need to be assured of the right type of project and the timing. i.e. when those companies cease to have uncertain cash inputs, upon which you can project a cashflow, i.e. net present value with a lot of confidence.

Comments are closed.

SocialTwist Tell-a-Friend

Current Top Story
An Israeli soldier prays at an IDF staging area near the Israeli border with Gaza, on July 31, 2014.
Israeli Soldiers Who Fought in Gaza Dragged to Missionary Evening
Latest Blogs Stories
kiruv-shafran

Responsible Jewish outreach encourages BTs to retain and to enhance their relationship with parents

Caroline Glick

Israelis will vote for Likud because of Caroline Glick, but she’ll just be Right window dressing.

Doug Goldstein

What are the dynamics of running a family business and what are its impact on family relationships?

Paris anti-terror march

The Hareidi paper HaMevaser wanted to have their cake and eat it too: use the photo; lose the women

Producer Chuck Wang explains how you can learn from mistakes and move on towards success.

Chareidi women who want to run for political office don’t suit the full definition of “chareidi.”

France inviting Abbas to the “anti-terror rally” makes me doubt it takes Muslim terrorism seriously

How could a Jewish family hide on the 3rd floor of a hotel where the Germans were on the 1st floor?

No Charedi leader has suggested a change that would make a difference to a failing paradigm

What is the “rookie mindset” and what can new trainees offer to the workplace?

And now for MORE Muslim musings-Go Ask Ayman-

This terror won’t respond to reason or logic. It must be hunted down. Destroyed. No trial/No talking

Israel as the Jewish State insures freedom of worship and security of Jews here and around the world

The average Israeli may not fulfill all mitzvos but shops at the mitzvah “store” regularly

Obama-style diplomacy: “Kerry Brings Hugs and James Taylor to Repair Relations with France”

The Israeli phenomenon: The least known candidate gets a disproportionately high amount of votes

More Articles from Doug Goldstein, CFP®
Doug Goldstein

What are the dynamics of running a family business and what are its impact on family relationships?

Doug Goldstein

Producer Chuck Wang explains how you can learn from mistakes and move on towards success.

What is the “rookie mindset” and what can new trainees offer to the workplace?

What is the “latte factor” and why do women need to be in control of their finances?

In our first podcast for this week, 4 healthy money habits that you can adopt.

Can you trust your children to run your finances when you get older?

How does humor help you reach out to your clients and succeed in business?

How climbing mountains can help you run a successful business and scale other peaks in your life?

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/three-mistakes-that-can-get-you-in-big-trouble/2013/03/31/

Scan this QR code to visit this page online: