Why everyone should file an ITA report

The Income Tax Ordinance Each person must submit an annual report, however, the regulations establish multiple exemptions from this charge, including an exemption for an employee up to a certain ceiling and an exemption for a passive income holder, up to a certain ceiling.

Despite these exemptions, everyone in Israel is advised to check the subject of submitting an annual report.

Here I will talk about the issue of capital gains and capital losses and the impact of the statute of limitations of retroactive filing.

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Currently, almost every person has a securities portfolio in a bank or other banking institution.

As much as bank investment, capital gains, i.e., securities spreads decrease tax automatically. This action is called withholding tax and is the same as the process that occurs for each employee on their salary.

It is important to remember that the bank does not offset capital losses.

Offsetting capital losses reduces capital gains, so in retrospect the bank lowers a tax surplus from what you actually had to pay.

In 2003, the offsetting clause changed capital losses and can currently be offset indefinitely.

Until 2003, only about 7 years ahead could be offset.

However, despite the change in the law, most people still find themselves stuck at the 6-7 year limit.

Currently, the only legal way to offset capital losses and in general record losses in order to meet the needs of the coming years is by submitting an annual report.

Why do most people who don't file a report every year find themselves stuck at the 6-7-year limit anyway

Because if you haven't submitted before, you are only allowed to submit back 6-7 years.

It is important to remember that there may be years in which a person in the portfolio accumulates large capital losses that cannot be offset in the year in question.

For example, the 2008 crisis gave people huge losses.

By 2014, a person must report these losses.

If he has not reported them, they will not be able to offset them in the future.

An example of this

Nir is an employee with a securities portfolio at the bank.

Didn't file an annual report for any year.

2019 sold a house at a profit and was forced to pay a commendation tax. In 2020, contact our office for a checkup. Our examination of his securities portfolio recorded losses of half a million, which, as mentioned above, he did not report. It found that about 200,000 of them belonged to 2015-2019, years outside the statute of limitations. Our firm quickly submitted a report in which it reported back on the remaining losses and offset the commendation tax, so it is extremely important to file a report not only for a refund - but for the future.

It is important to remember that the tax laws are constantly updated and changed, due to the effect of monetary policy. It is worth checking your need for a serving. With all the sorrow in the world and with all the good connections of your professional, even a squad manager or mole clerk himself cannot enter a mole that the computer blocks from receiving.