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.
I want to purchase a house overseas. I will send money to my wife, to her account. I do not have an account and the title will not be in my name. What is required for reporting and filing in USA and Philippines?
Hi Bob,
Thank you for getting in touch with Finder.
Since you want to send a large sum of money to your wife in the Philippines, I would recommend you to check the tax guidelines and regulations for large money transfers into the Philippines.
Please note, if you send more than $14,000 to the Philippines, encourage your recipient to claim your remittance on their annual income tax filing.
I hope this helps.
Have a great day!
Cheers,
Jeni