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The IRS requires you to report any transfer over $10,000, and failing to file can mean hefty penalties – and in some cases even jail time.
How Mexico regulates large remittances
Mexico doesn’t levy specific inheritance, estate or gift taxes on large amounts of money transferred into the country, but your recipient may have to report the transfer as income when they file their yearly tax return.
Gifts to spouses, children and parents are exempt, but gifts to siblings are not — and if the government finds out that the stated recipient gave the money to someone else, it won’t be exempt.
Compare providers for your next large transfer to Mexico
Our table lets you compare the services you can use to send money abroad. Compare services on transfer speeds and fees, then click Go to site when you're ready to send.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
What are the penalties in Mexico if my recipient fails to file?
If your recipient doesn’t list the transfer on their income taxes, they could be charged with tax evasion in Mexico. If they can prove that the failure to list the transfer was accidental, they’ll have to pay any taxes due, along with a penalty. If the failure to file was intentional, they can be criminally charged.
When do I have to report large transfers out of the US?
If you’re sending more than $15,000 as a gift, sending to a foreign account in your name that holds over $10,000 or sending over $10,000 as a business, you’ll need to let the IRS know.
By law, banks report cash transactions into and out of the country. Money transfer companies are sometimes held to reporting thresholds as low as $1,000. With so much attention paid to money entering and leaving the country, the government will likely discover if you fail to report large sums out of the US.
There is no legal limit on the amount of money you can send to Mexico. Different money transfer providers will impose their own limits when sending to Mexico from the US, for example:
Western Union’s sending limit to Mexico is $7,499
Xoom’s sending limit to Mexico is $10,000.
MoneyGram’s sending limit to Mexico is $10,000.
Wise’s sending limit to Mexico is $1,000,000
When sending large amounts of money you’ll want to go with providers that have extremely high limits or no limit at all. Wise’s $1,000,000 limit is useful, but compare Xe against Wise as it offers competitive fees and no sending limit.
How can my recipient in Mexico get the money?
How your friends and family receive your money transfer depends on the provider and method you’ve used to deliver it. Available options include direct bank transfers, cash pickup and mobile wallet deposits. If you’re sending cash, your recipient may need to show ID or a transaction number to pick up the funds.
As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.
When it comes to tax regulations, Mexico is an easy country to send money to. Your recipient won’t have to fill out any extra forms, and depending on how much you’re sending and who you’re sending it to, you might not have to, either.
Is dealing with the IRS a hassle when transferring large amounts?
If you follow the law and submit your legal documentation timely and accurately, you shouldn’t experience hassles with the IRS. If you choose not to follow the law, you may be on the hook for stiff penalties, including jail time.
How do I avoid IRS penalties if I fail to file?
Avoid penalties if you can show the IRS reasonable cause for a failure to file, such as a house fire, major illness or natural disaster.
