Meital took one simple, legal step to save about $30,000 in taxes every year.
She used to be an international photographer based in NYC, making about $100,000. But despite that income, she was still living paycheck-to-paycheck.
As a self-employed person, she often forked over some $30,000-$50,000 in taxes to Uncle Sam every year. (Self-employed, sole proprietors in the US pay some of the highest tax rates out there.) Add in NYC living costs and there was nothing left for savings.
Lonely and broke, she asked her cousin, a rabbi (the family is Jewish), for advice. He suggested she move to Israel, which offers easily attainable citizenship to Jews around the world.
Meital calls the move “the best decision [she’s] ever made.”
But there’s another huge benefit: It turns out that gaining Israeli citizenship and living in Israel also renders tremendous tax benefits to new citizen/residents.
The ability to increase your income — and keep more of it — is one benefit of holding a second passport and moving abroad.
But a second citizenship also greatly expands your freedom. It gives you unfettered access to another home base. If things go south in your home country, you and your family have more options for where you can live, work and invest.
If you’re Jewish, gaining an Israeli passport is generally a fast, relatively straightforward process. You just apply, fill out the forms and wait about a year.
And new citizens who move to Israel get an enormous tax break… for a decade.
In 2008, the Knesset (Israeli parliament) passed an amendment exempting new immigrants from tax on income from abroad. Someone who starts a restaurant in Israel isn’t exempt, but a new immigrant who makes money elsewhere, like Meital does with her photography, generally doesn’t have to pay Israeli taxes on that income.
And again, new citizens are exempt from Israeli taxes for the first ten years they live in Israel.
Additionally, because Israel and the US have what’s called a double taxation treaty, dual US-Israeli citizens like Meital are only required to pay taxes in one place — in this case, Israel.