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What's the max amount of money I can send to my wife overseas, without being taxed? Also what's the max amount of money I can currency exchange without being flagged?

Forum|Forum|3 years ago
October 19, 2022
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I send money to my wife in japan to support her and my kids. Sometimes I also exchange currency when I'm in japan

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Best answer by pk12_2

@v4r3l4 , assuming that you are a US person ( i.e. a Resident for Tax purposes ), there is absolutely no limitation on monies that you can send abroad or that you can exchange ( US$ to Yen or what ever). And no taxation on monies that have already been taxed by the US. However, any monies wired and more than US$10,000, would automatically be internally flagged by the bank and a SAR raised. But nothing happens to these. If I remember right , if you send a US$ 1 Million or more you need treasury approval. For us normal folks , there is no issue anywhere with transferring and/or exchanging currency ( unless you are currency trading, then you have to recognize the gains/losses).

Is there more I can do for you ?

k

Employee

pk12_2Answer

Employee

@v4r3l4 , assuming that you are a US person ( i.e. a Resident for Tax purposes ), there is absolutely no limitation on monies that you can send abroad or that you can exchange ( US$ to Yen or what ever). And no taxation on monies that have already been taxed by the US. However, any monies wired and more than US$10,000, would automatically be internally flagged by the bank and a SAR raised. But nothing happens to these. If I remember right , if you send a US$ 1 Million or more you need treasury approval. For us normal folks , there is no issue anywhere with transferring and/or exchanging currency ( unless you are currency trading, then you have to recognize the gains/losses).

Is there more I can do for you ?

k

V

v4r3l4Author

Hi @pk12_2

Okay, so as long as i send my US earned income or even if its a personal loan by a US institution. I wouldn't need to pay taxes on the money im wire transferring to my wife overseas?

Also could you be kind enough to provide me with a reference where you are getting your information from?

Thank you,

O

Opus 17

Employee

@v4r3l4 wrote:

Hi @pk12_2

Okay, so as long as i send my US earned income or even if its a personal loan by a US institution. I wouldn't need to pay taxes on the money im wire transferring to my wife overseas?

Also could you be kind enough to provide me with a reference where you are getting your information from?

Thank you,

US taxpayers only pay tax on personal gifts if their lifetime total gifts is more than $11,700,000, and even then, gifts to spouses are exempt.

However, gifts to spouses are not exempt if your spouse is not a US citizen. In that case, you must file a gift tax return form 709 if you give more than US $159,000 in any year. You won't owe tax unless your lifetime total of gifts is more than $11,700,000, but the return must be filed so the IRS can keep track of your large gifts against your lifetime limit. Form 709 is not included in Turbotax, you must prepare it yourself or have an accountant help you. The filing deadline is the same as the income tax deadline of April 15.

See the form and instructions here.

https://www.irs.gov/forms-pubs/about-form-709

For purposes of the gift tax, it doesn't matter how you acquired the money. If you borrowed the money, and then gifted it to someone, then you still owe the bank, it's not from the bank to your spouse, it's a loan from the bank to you and still a gift from you to your spouse.

Generally, if you take more than $10,000 cash overseas, you must declare it at the border and they will give you a form to fill out at customs. There's no limit on how much money you can carry, but it is illegal to fail to declare if you are carrying more than $10,000. Just declare it and fill out the form.

Likewise, if you transfer more than $10,000 via banking services (wire transfer, cash app, etc.) the bank must make a report. There's no limit and no tax involved, but the report must be made. Be careful, that making several small transfers to avoid the reporting requirement can constitute a separate crime call structuring even if the transactions would be illegal otherwise. In other words, if you transfer $25,000 in one transaction, that's perfectly fine, but if you transfer $5,000 on 5 different days, that could be considered structuring to avoid the automatic reports.

As a practical matter, you will be better off making bank transfers than carrying large amounts of cash, if at all possible.