Read Double tax trouble for US olim by Debbie Inker at Globes Online. (If you are having trouble getting to the article, try here instead). This article talks about how American olim could suffer some serious tax setbacks due to lack of a social security tax treaty between Israel and the USA. I had not heard of this before – looks like something I should definitely start thinking about (though I don’t know how much good it will do me since things are the way they are. I’ll just need to talk to a good accountant familiar with both the US and Israel. Anyone have any references?).

Update: a friend of mine emailed me the following:

I asked my dad about the tax article on your blog; he is a CPA in both countries and handles these issues on a regular basis.

He said the article is accurate, except “anyone smart” works around it: The double tax only effects the self employed in Israel. In some cases, there are benifits to paying US social security taxes. For people who don’t have a reason to pay US social security tax, they create an Israeli corporation for which they are the only employee. This sidesteps this issue entirely. This takes some paperwork, perhaps a lawyer, and changes they way they do payroll, but eliminates the need to pay US social security tax.

Moral of the story: get yourself a good accountant!