Avoid a minefield by understanding the tax implications of large transfers and knowing when you need to file.
Possibly: but it depends on how large the transfer is and whether you’re the giver or the receiver.
Also, if you are the one sending the gift, there are also forms you may need to fill out.
By law, banks report all cash transactions that exceed $10,000 — and any transaction of any amount that alerts their suspicions. Money transfer businesses, which often solely send money between countries, sometimes have reporting thresholds as low as $1,000.
The Bank Secrecy Act allows the IRS and Department of Justice to investigate large transfers of money to identify illegal activity more easily. There are also numbering systems that are used to process money transfers that make it easy for the government to track funds — even if they’ve been sent to an overseas account.
Depending on how much you’re sending and why, the IRS may require you to fill out any number of tax forms:
| Form Number | Form Name |
|---|---|
| Form 114 | Foreign Bank and Financial Accounts (FBAR) File if, in the past year, you’ve had a foreign account valued at more than $10,000. |
| Form 709 | Gift (and Generation-Skipping Transfer) Tax Return File if you’ve given away more than $17,000 in the past year |
| Form 3520 | Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts File if you received a gift of more than $100,000 from a person in another country or if you received a gift of more than $17,339 from a foreign corporation or partnership. |
| Form 8938 | Statement of Specified Foreign Financial Assets File if the total value of all your foreign accounts and combined assets was worth $50,000 or more on the last day of the year or $75,000 or more at any point in the last year. ($100,000/$150,000 for married couples filing joint returns.) |
| Form 8300 | Report of Cash Payments Over $10,000 Received in a Trade or Business If you own a business that sent $10,000 or more in cash payments, bank drafts, money orders, checks or traveler’s checks in the past year. |
Laws and legal documents when transferring large sums of money into the US
Those who fail to report can expect fines of up to 5% of the asset value involved or $10,000 a year for up to six years. For those who wait until an investigation is launched, the penalty increases to up to 50% or $100,000 — whichever is greater. That amount can be applied to every year you failed to report for up to six years. You could also face criminal charges and up to 10 years in prison.
To ensure you’re in compliance with all laws, work with a reputable transfer company and go over your tax forms with a professional if you’ve sent or received more than $10,000 in the past year.
How do I file my taxes online?
The gift tax requires you to pay taxes on any large monetary gifts over a certain threshold. You can gift up to $12.92 million in your lifetime without owing this tax, but you’ll have to file a form if you’ve gifted more than $17,000 in the past year. If you’re married, both you and your spouse can give $17,000.
Still, you can legally avoid filing for the gift tax in a number of ways. One is to reduce the amount of money sent to any one person. For instance, if you’re sending money to support a family, divide your total gift among the various members of the family to stay below the $17,000 individual limit. This is helpful when divvying up something like an inheritance, where the money will in fact be shared among family members.
Given the complexities of tax laws, it’s wise to seek the help of someone who knows the laws to ensure you’re in compliance.
If you give someone money and don’t expect any goods or services in return, it’s a gift. Tuition, medical expenses, gifts to political organizations and gifts to a spouse are exempt.
If you’re helping your children with tuition or medical expenses, pay the school, hospital or insurance companies directly. The IRS will notice — and expect to be notified — of any checks or transfers you send directly to your dependents.
Yes. If you’re considering setting up an overseas account, you’ll need to report it to the IRS. Even if the account is to hold money temporarily before a bigger transaction or to share access with a child or family member as a joint account. Besides traditional income tax statements, US citizens with bank accounts offshore must file a Foreign Bank Account Report (FBAR) by mid-April of each year that an overseas account holds $10,000 or more. Whether the money is there for a day or a year, it must be reported.
Be aware that some countries have limits on bank wire transfers — potentially on incoming and outgoing — so research the rules that apply to any country the money will travel through.
If you’re receiving foreign income, sending large gifts or operating an overseas business, you’ll likely have to pay taxes on your transfers. Recoup some of that money by choosing a transfer provider that offers competitive exchange rates.
You’ll likely need to file with the IRS, and your recipient may have to pay a gift tax.
Your recipient may need to pay taxes on a large remittance, and you’ll likely need to report it.
Transferring large sums into Colombia can come with more paperwork and potential taxes than other countries.
Your recipient won’t be on the hook for any taxes, but there may be limits on how much you can send.
Need to send $10,000 or more to Italy? Protect yourself from penalties and save time with our tax and documentation guide.
Transferring large amounts of money to France? Learn how to protect yourself from tax issues and potential penalties.
Looking to transfer a lot of money to the Philippines? Protect yourself from penalties and save time with this guide.
Need to send a lot of money to China? Protect yourself from penalties and save time with this tax and documentation guide.
Are you due to receive a large sum of money from another country? Familiarize yourself with laws and required documentation.
Hello, I’d like to know the tax implications of depositing in a US Bank Account of up to 20,000USD from the Philippines. Do I need to file some forms in BIR before making any move?
Hi Hope,
Thank you for reaching out to Finder.
If you are planning on making a bank to bank transfer from the Philippines, the bank would provide you the regulations on sending large amounts. They will also provide the necessary documents that you need to fill up to ensure that we are within the legalities of the transfer. Hope this helps!
Cheers,
Reggie
I just applied for the green card after I married to a US citizen and now I would like to take $50,000 to the country. I already have US bank account.
Is there any implication with the tax office? Last thing I want to pay tax on money saved up and already taxed at overseas.
Hi Joseph,
Thanks for getting in touch with finder. I hope all is well with you. :)
I could not give you a straightforward answer to your question, Joseph. This is because there are just different factors that determine whether a particular amount of money is taxable or not.
First, you would need to determine the source of the funds. If it is an income you earn, then tax would likely incur. You also need to check the tax law of the US and the country where the money will be coming from. Next, since you are sending a large amount of money, you would need to report it to the IRS using the right form.
Tax law can be very complicated. It would be helpful if you directly speak to a tax specialist.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
What do I need to know if I am buying an apartment in South America?
Hi Juan,
Thanks for getting in touch with finder. I hope all is well with you. :)
There are a few things you need to know before you buy an apartment in South America. First is to check the local real estate laws of the country where you are going to buy an apartment. Meet their legal requirements. From there, you can start looking for an apartment. Assess your needs, budget, and preference to simplify the whole buying process. Finally, seek professional help to obtain personalized expert advice.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
If I receive money on monthly basis at western union, less than $900 every time, so I have to claim that on taxes? Btw, I take that cash and never deposited In my bank account.
Hi M Abouz,
Thanks for getting in touch with finder. I hope all is well with you. :)
If you are receiving an income from overseas, you might need to declare that to the IRS. However, there is a maximum amount of money that you can receive without getting taxed. Speak to a tax professional to get more details about the tax implication of your money transfer.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
Through a mess up of the company I work for, NJ child support was overplayed. That overpayment was ‘returned’ to me and now I must return it back to the company. It is a large enough transfer above 20,000. Will I get zapped by taxes, like the gift tax or something?
Hi Skip,
Thanks for getting in touch with finder. I hope all is well with you. :)
Generally, taxes are charged when you made an income from a transaction. In your case, you will be returning money to the company. For this reason, it might not be considered as an income. However, since you are going to send money that exceeds $15,000, you might be charged with gift tax and you will need to file a gift tax return. I highly recommend you check the FAQ Gift Taxes section of the IRS to learn more.
Of course, there are other factors I’m not aware of that might affect the status of the money. It would be a good idea to check with the tax office or speak to a tax specialist to learn more.
I hope this helps. Should you have further questions, please don’t hesitate to reach out again.
Have a wonderful day!
Cheers,
Joshua