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 $18,000 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 $19,570 in 2024 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.
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.
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.
Do you need to send a large amount of money to Mexico? Learn about related laws and required documentation.
Are you due to receive a large sum of money from another country? Familiarize yourself with laws and required documentation.
Hello, I like to help my sister to buy a her a house in Turkey and send him 40k.
What kind of forms do I need to fill?
Do I have to pay taxes to IRS?
Can I also send 14k to my dad? And 14k to my mom in a one tax year?
Thank you so much.
Hi Aristo,
Thanks for getting in touch with finder. I hope all is well with you. :)
Since you are sending money to your sister, you will most likely need to fill the IRS form 709. It is the form used to report gifts subject to the gift tax. Please note, as our guide mentioned, filing a gift tax return doesn’t necessarily mean that you’ll pay the gift tax. Technically, you can gift up to $5.25 million in your lifetime without owing this tax.
Regarding your second question, it depends on different factors whether you need to pay taxes to the IRS or not.
For your third question, yes, you can send 14K to your mom and dad provided that you met all the government requirements.
Since tax laws are highly complicated, it would be wise to seek the expert help of someone who is familiar with the laws to ensure you’re in compliance.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
Does a permanent resident exempt also from the gift tax below $14,000? Also when it said in a year, does that mean the limit reset at the end of the year?
Can a Permanent Resident ( Cdn. Citizen) choose to transfer funds from a US bank to a Cdn. Bank without penalty?
Hi Dave,
Thanks for getting in touch with finder. I hope all is well with you. :)
Penalties do happen when you don’t abide by the law. If you are going to transfer a huge amount of money from the US, you still need to report the transfer to the IRS. You probably need to fill out the necessary IRS forms mentioned above.
To learn more about the legal implications of sending a large amount of money, you may directly get in touch with the IRS or talk 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
Hello Ruru,
Thank you for your comment.
The donor is generally responsible for paying the gift tax which can be for permanent resident and has an annual exclusion if below $14000. A tax year is counted from January 1 to December 31, and you are required to file federal income tax returns by April 15. I hope this helps.
Regards,
Jhezelyn
I am not sure if this is the right place to ask but maybe someone can point me in the right direction. I live in a border town with Mexico and discovered that western union allows you to send currency to Mexico at a significantly favorable rate. Usually 5 to 10 percent more than what the local exchange booths will sell you dollars for.
For example, today i wired myself $7500 USD and received $154,275 MXN (exchange rate $20.57 MXN for $1 USD). Once i returned to the US I exchanged the currency at $19.15 MXN for $1 USD. So, i received $8,056.13 USD.
The issue was that at the exchange booth on the US side I was told that these kind of transactions are legal and that they wont be able to exchange currency for me again and that I should research the law on the IRS website.
My questions to you guys are:
Is this really illegal ?
Are there any websites I should research or laws I should be familiar with if I plan to continue this endeavor?
Any information is appreciated guys. Thanks!
Hi George,
Thanks for getting in touch with finder. I hope all is well for you. :)
I understand your concern. It is important to ask the exchange booth what makes your transaction illegal and if they can point you to the specific place to confirm their claim. Since we are not tax or legal experts, you might want to ask a local tax office where you can get a more personalized answer.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
I’m selling my UK property for £350,000, I live in Florida and want to transfer the money to my US account.
Do I need to file any paperwork before I transfer the money or do I just declare it on next years tax form in US?
I should have paid the capital gains in the UK and I can offset this on my US tax’s.
Hi Spencer,
Thanks for getting in touch with finder. I hope all is well for you. :)
If you’re receiving more than $10,000, you’ll need to abide by US laws put in place to both protect your money and protect the interests of the government. In most cases, you would probably need to report the money you received using the Form 3520 — Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts.
As the recipient of the transfer, you are solely responsible for reporting the amount you received during the current tax year with your annual tax filing.
Please note that we are not tax experts and so you still need to seek professional 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 a $23,000 money transfer from Portugal to my US bank account, how much do I pay the IRS?
Hi Lou,
Thank you for getting in touch with Finder.
Since 2013, US citizens have been allowed to transfer up to $14,000 in US currency overseas as a gift without having to file a gift tax return. If you are married, both you and your spouse can give $14,000 to the same person. Further, if your giftee is married, both you and your spouse can each give $14,000 to each person in the married couple.
The means that the maximum amount a married couple can gift another couple without filing for the gift tax is actually $56,000. Once you go over the $14,000 threshold (or couple limits, considering your circumstances) you are responsible for filing a gift tax return. Filing a gift tax return doesn’t necessarily mean that you’ll pay the gift tax. Technically, you can gift up to $5.25 million in your life time without owing this tax.
As a friendly reminder, while we do not represent any company we feature on our pages, we can offer you general advice. You can check IRS FAQs on gift taxes for more details.
I hope this helps.
Have a great day!
Cheers,
Jeni