Israel Self-Employed — Form 1301 & Doch Ma'am Annual Return

Establish the client's business registration status, VAT track, and filing obligations for the year. Confirm whether they are an Osek Murshe (registered VAT dealer, turnover above ~NIS 120,000) or Osek Patur (exempt dealer), their industry code (Tachum Isuk), and whether they hold a current Ishur Nikui Mas BeMakor (withholding certificate). Identify any additional income sources — salary, rental, capital gains — that will feed into Form 1301.

Reconcile and confirm that all bimonthly (or monthly) Doch Ma'am returns have been filed and paid on time throughout the year. For Osek Murshe: verify output Ma'am on all Heshboniyot Mas (tax invoices) issued, and input Ma'am credit on qualifying purchases. Apply the 2026 rule — deductions are disallowed where withholding was missed or where cash payments exceeded NIS 6,000 B2B. Produce the annual Ma'am summary that feeds into the income-tax profit calculation.

Calculate the self-employed National Insurance (NI) and health-insurance contributions due for the year. Self-employed NI is assessed on net business income: 2.87% + 3.1% health on the low tier (up to NIS 7,703/month) and 12.83% + 5.0% on the upper tier (up to NIS 51,910/month). Confirm that advance NI payments (Maavanot Bituach Leumi) made during the year are reconciled against the final liability, and that 52% of the NI paid is flagged as a deductible expense on Form 1301.

Prepare or review the profit-and-loss account for the tax year. Verify that all deductible expenses have proper Heshboniyot Mas, that mixed-use expenses (home office, vehicle, mobile phone) are apportioned correctly under ITA guidelines, and that pension and Keren Hishtalmut contributions are within deductible ceilings. Confirm depreciation schedules for capital assets. The output is the net business income figure that enters Form 1301 Schedule B (Osek/Murshe income).

Compile all income sources — business income (Schedule B), salary (if any), rental income (Schedule C), capital gains from securities or crypto (Forms 1322/1325), and any other passive income — onto Form 1301, the Israeli individual annual return. Apply tax credit points (Nekudot Zikui — 2,904 NIS per point per year, frozen 2025–2027), deductions for pension, Keren Hishtalmut, and 52% of Bituach Leumi paid. Apply surtax (Mas Yesafim) at 3% + 2% = 5% on income above NIS 721,560. Calculate the balance owed or refund due after crediting advance-tax payments (Maavanot).

Submit the completed Form 1301 through the ITA Shaam online portal (misim.gov.il) by the deadline — June 30 for online filers (tax year 2025), May 31 for paper. Pay any balance due or claim the refund. Immediately following filing, update the Maavanot (advance income-tax instalments) for the new tax year based on the current-year liability, and renew the Ishur Nikui Mas BeMakor if it expires December 31. File Form 856 (annual withholding reconciliation for payments to suppliers) by April 30 if the business made payments subject to withholding.