Understanding student residency and tax questions

Taxes and residency can be confusing when you move abroad. This is a general guide, not tax advice. Talk to a professional for your situation. ISRAELI TAX RESIDENCY • Residency is based on your center of life, including where you live, your family, and your economic ties. • There are day-count tests too. Staying a long time in a year can create a presumption of residency. • A student on a temporary visa often does not become a tax resident right away, but it depends on your facts. US TAX OBLIGATIONS • US citizens must file US taxes no matter where they live. • If you earn income, there may be exclusions or credits. • If your total foreign bank balances exceed $10,000 at any time during the year, you may need to file an FBAR. • Other foreign account reporting, such as FATCA forms, may apply at higher amounts. TIPS • Keep records of your days in Israel, your income, and your accounts. • Ask your tax preparer about expat rules before you leave. • Let your Israeli bank know you are a US person. You will be asked to sign forms anyway. • Scholarships, stipends, and gifts have different tax treatment. WATCH OUT FOR Ignoring foreign reporting rules can lead to penalties. When in doubt, ask a tax professional who understands both countries.