What happened when you opened your first Israeli bank account after making aliya?
A new oleh recently told me: “I just tried your online tool to find out what I need to know about having a U.S. brokerage account now that I’ve made aliya. But I think I made a mistake when I opened my new Israeli bank account.”
He had gone to a local bank and told them that he wanted to bring some money over to Israel. The clerk there answered that as there is now an information exchange agreement between Israel and the United States (true), he needs to sign an IRS form called a W8 (false). The mistake was the form number, not the fact that the details of the Israeli bank account would be available to the IRS.
What forms do I sign?
If you open an Israeli bank account, you need to sign a W9 form (not W8), which tells the bank that you are a U.S. citizen. It provides the bank with your Social Security number to allow for easy reporting to the IRS. The W8 form is used for non-U.S. citizens.
You might be familiar with the W9 form from opening accounts in the States. In fact, when we help American olim with their IRA (Individual Retirement Account), brokerage, or other investment accounts, we have them sign a W9.
Are there restrictions on my investments from Israel?
Now that you live overseas, you may find that some companies, banks, and mutual funds won’t want to work with you. But don’t worry. Even if your old firm has a problem with overseas clients, it’s easy to set up a U.S. brokerage account while you live in Israel. You can find answers to many common questions on this subject here. If you’d like to discuss your situation, call 02-624-2788.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published December 13, 2016.