Avoid a minefield by understanding the tax implications of large transfers and knowing when you need to file.
Key takeaways
Taxes on money transfers depend on the amount and whether you’re the giver or receiver.
Banks report cash transactions over $10,000 and some money transfers over $1,000 to the IRS.
Penalties for not filing can include hefty fines, criminal charges and up to 10 years in prison.
Gifts over $12.92 million lifetime or $18,000 annually may require you to pay taxes.
Do I have to pay taxes on money transfers?
Possibly: but it depends on how large the transfer is and whether you’re the giver or the receiver.
You must pay taxes on gifts you send if you’ve given more than $12.92 million in your lifetime.
You might have to pay taxes on transfers you receive if they were income, including capital gains.
You typically won’t pay taxes on gifts received through international money transfers, but you’ll need to report it using Form 3520.
Also, if you are the one sending the gift, there are also forms you may need to fill out.
How can the IRS know what I’m transferring?
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.
What kind of IRS forms will I need?
Depending on how much you’re sending and why, the IRS may require you to fill out any number of tax forms:
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 $19,570 in 2024 from a foreign corporation or partnership.
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.)
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.
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.
What is the gift tax?
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 $18,000 in the past year. If you’re married, both you and your spouse can give $18,000.
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 $18,000 individual annual 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.
What counts as a gift?
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.
Compare money transfer services for your next large transfer
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Do I need to tell the IRS about foreign bank accounts?
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.
Frequently asked questions
Yes, but you’ll have to fill out a form for that, too — specifically FinCEN form 105.
Yes. While the amount of taxes you owe won’t change, you can save money by choosing a transfer provider with competitive exchange rates.
Possibly. It depends on how much your pension is worth. However, if your pension is also being taxed in another country, you may be eligible for a tax credit to offset the cost.
Kelly Suzan Waggoner is a Personal Finance Editor at AOL and the former US editor-in-chief at Finder, where she worked with a talented team of expert writers and editors focused on helping readers to save money, earn money and grow their wealth. She joined Finder in 2016 as an editor, germinating the site from money transfers to include the wide scope of personal finance.
Kelly has worked with publishers, magazines and nonprofits throughout New York City to develop best practices around editorial, SEO, plain language and accessibility, including Black Dog & Leventhal Publishers, HauteLife Press and Queerty. She is quoted on such sites as Lifehacker and CertifiKid, and ghostwrote Copyediting and Proofreading for Dummies, published by Wiley.
Kelly earned a BA in English from Russell Sage College and a Poynter ACES Certificate in Editing from Poynter News University. She is trained in digital and website accessibility and plain language, and is a member of ACES: The Society for Editing and the Center for Plain Language. Between projects, she toys with words, flips through style guides and fantasizes about the serial comma’s world domination. See full bio
Kelly Suzan's expertise
Kelly Suzan has written 47 Finder guides across topics including:
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?
Finder
johnbasanesMarch 14, 2019Finder
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
josephOctober 10, 2018
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.
Finder
JoshuaOctober 14, 2018Finder
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
JuanOctober 8, 2018
What do I need to know if I am buying an apartment in South America?
Finder
JoshuaOctober 13, 2018Finder
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
MSeptember 21, 2018
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.
Finder
JoshuaSeptember 24, 2018Finder
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
SkipAugust 27, 2018
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?
Finder
JoshuaSeptember 2, 2018Finder
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
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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