Divorce is never simple. But divorcing in Israel as a U.S. citizen adds a layer many people overlook: U.S. tax obligations. If you or your spouse are American citizens, your tax filings with the IRS can impact custody, support, and division of property. Missing key tax details now could cost you later.
If you’re thinking about separation or divorce, now is the time to get informed and protected.
1. Are You or Your Spouse a U.S. Citizen?
U.S. citizens must file annual tax returns with the IRS—even if they’ve lived in Israel for decades. If you’ve filed jointly in the past, consider switching to separate filing. This can shield you from tax liability caused by your spouse’s actions or mistakes.
2. Who Has Been Handling the Finances?
If your spouse has always managed the taxes, you may not know your true financial position. This is common—but risky. Before you move forward, get a clear picture of your income, assets, and tax history, both in Israel and the U.S. A divorce lawyer or accountant familiar with both systems can help.
3. Do You Have U.S. Citizen Children?
If your children are U.S. citizens with Social Security numbers, you could qualify for refundable tax credits:
- $1,700 per child per year (under age 17)
- $1,000 per child per year (university students)
If you’ve never claimed these, you may be eligible for years of back payments.
4. Have You Ever Received a U.S. Tax Refund?
Many American-Israeli families don’t know they qualify for U.S. tax refunds. If you’ve never filed or haven’t claimed credits, you may be missing thousands of dollars. An experienced accountant can help you file retroactively and recover refunds.
5. Have You Been Filing U.S. Taxes Consistently?
Don’t panic if you’ve fallen behind. The IRS offers amnesty programs for expats to catch up without harsh penalties. The key is to act before the IRS contacts you.
6. Do You Earn More Than $14,000 Annually?
If your income—from salary, investments, or pensions—exceeds $14,000 per year, you’re probably required to file U.S. taxes. If your income is below that, you may be exempt. Either way, clarity is power—especially before a divorce.
Why Taxes Matter When Divorcing in Israel as a U.S. Citizen
While you’re still married, your spouse can legally file joint U.S. returns and possibly claim refunds tied to your identity—without your knowledge. That can lead to unauthorized tax filings, hidden refunds, or disputes down the line.
To protect yourself:
- Hire a separate U.S. accountant (not shared with your spouse)
- Check your filing history
- Ask about tax credits and missed refunds
Thinking About Divorce? Start with the Right Advice
Divorce is emotional and complex. But surprise tax bills or missed refunds make it worse. If you’re divorcing in Israel as a U.S. citizen—or married to one—don’t skip this step.
At Hait Family Law, we help Anglo clients in Israel navigate divorce wisely—addressing both legal and financial issues, including connecting you with trusted professionals to handle U.S. tax matters. Schedule a consultation today to understand how these issues could affect your divorce and how to safeguard yourself and your children.
