What can I get a tax refund on?

The two most valuable tips you will ever receive in your life!!! - at the end of the post

What can I get a tax refund on?

The Tax Authority in Israel has billions of shekels that have never been claimed by individuals. You can receive a tax refund for up to six years, including 4% interest and linkage differences. If you are self-employed, you can claim refunds for up to four years.

Here are some things for which you can claim a tax refund:

1. Premium payments for life insurance (including mortgage life insurance) and disability insurance.

2. Offsetting losses in the capital market.

3. Donations.

4. Work breaks - periods without income or a decrease in income.

5. Incorrect calculation of credit points for an academic degree, children, alimony payments, single-parent families, or financial support for a parent.

6. Deductions for oil exploration expenses.

7. Tax benefits for peripheral areas such as Eilat.

8. Tax benefits for soldiers or returning residents.

9. Withdrawal of pension funds with payment of tax

Do you know of any other items for which you can claim a tax refund? I would love to learn more 😊

Valuable Tip #1:

Are you eager to start investing in real estate but lack the necessary equity? Withdrawals from a provident fund or pension plan are subject to a 35% tax. It's time to familiarize yourself with Rule 34(b)(4) and Rule 38 of the Income Tax Regulations, which outline the rules for approval and management of a provident fund.

Employees or self-employed individuals (or their relatives as stipulated by law) who have been determined to be permanently medically disabled at a rate of 75% or higher due to an illness or injury that occurred after opening the provident fund account may be eligible to withdraw funds from the fund before the repayment date without paying tax.

Who is eligible?

Employees or self-employed individuals who meet the aforementioned criteria of permanently medically disabled at a rate of 75% or higher due to an illness or injury that occurred after opening the provident fund account.

Valuable Tip #2:

You can request that the appreciation tax be calculated for up to four years prior to the year of sale, rather than just for the year of sale. This allows the accumulated appreciation over the years to be added to the seller's taxable income for each respective year.

Spreading the appreciation tax over several years can reduce the tax percentage on the appreciation and decrease the seller's overall tax liability, depending on their personal income tax situation.

The appreciation tax can be spread over a maximum period of four years prior to the date of sale or for the period of ownership of the property being sold, whichever is shorter.

Please note that the ownership period for real estate begins in the tax year following the year in which the seller acquired the property and ends in the tax year in which the seller is no longer the owner.

Please be aware that the information provided here, in part or in whole, should not be considered investment advice, pension advice, or any specific recommendation. This does not constitute advice or marketing for investments, pensions, or taxation, nor should it be considered a substitute for personalized advice tailored to individual circumstances.

It is advisable to consult appropriate professionals such as tax consultants, accountants, lawyers specializing in taxation or real estate taxation, and obtain the necessary approvals from an assessor based on the advice received.