Is money brought into the US taxed?

[Miss M 54]

My husband and I were living in South Africa and before we moved here, we sold all our belongings, including vehicles. We consulted with both our bank in SA and our bank here in the US, and they both walked us through the paper work we needed to fill out to transfer the funds. It was a fairly simple procedure, and both banks just needed assurance and evidence as to the source of the funds since it was such a large amount of money. We were not taxed on it and on the whole, it was a quick, painless procedure.

I had American friends who had been living in South Africa who had done it just before we did, and they didn't face any problems either.

I think dxreed is spot on in terms of the legality of it all.

[christeen 966]

What other people have DONE and GOTTEN AWAY WITH does not mean it's okay. You do what you want. 10k is a magic number but then again the IRS also monitors amounts close to that, or multiple transfers from one account to another below the 10k threshold.

Good by and good luck

Aloha Ke Akua

What exactly are the "getting away with"? Transferring their own money to their new place of residence? Moving assets for the place the "used" to live to their new home country? Using assets they legally possess to establish their new residence here? There is absolutely NOTHING illegal or,shady about this... Do you not think the USA would WANT immigrants to bring money (that they will spend and invest) here in the USA, where they can tax any interest they earn on it?

[Darnell 8,478]

What other people have DONE and GOTTEN AWAY WITH does not mean it's okay. You do what you want. 10k is a magic number but then again the IRS also monitors amounts close to that, or multiple transfers from one account to another below the 10k threshold.

Good by and good luck

Aloha Ke Akua

Actually, it's the FBI that monitors the amounts, not the IRS.

The 10K limit flips a signal from both banks to the FBI. They are required to report it to the FBI.

AND ...

none of it is taxable during the transfer.

If it's foreign income that was never declared by a US Citizen, OTOH, that's different, but still the IRS not involved during the transfer for reporting stuff.

You are extremely alarmist and your level of alarm is not based on facts.

[CaizLurol 36]

How do you recommend that someone who is moving to the United states bring their money with them then? In cash in their pocket on the plane?

And I would hardly call an amount less than 10,000 dollars "money laundering"

No it's not money laundering and it isn't dangerous, either. I think that the person who said this is over reacting.

You can bring in as much money as you want on you but if it is over $10K, it needs to be declared at Customs.

An accountant told me that a relative can "gift" you up to $13K being tax exempt.

Can the person open up a bank account in their home country at a multinational bank that exists in the US? For instance, I know Citibank exists in South America. Banco Santander also has branches in the US. That way it would be easy to access.

Of course, ask a tax attorney or accountant just to be sure. Many of them give free advice.

Edited September 10, 2013 by CaizLurol

[CaizLurol 36]

By the way, Western Union has better rates than PayPal to transfer money internationally.

[DrakeSG 2]

Bank to bank transfers are very safe and NOT considered money laundering. They are NOT dangerous whatsoever. It's the way money is tranferred, business is done, etc.

If you are married, you can generally give as much as you want, though there are exceptions: see here: http://www.ehow.com/info_12006372_giving-money-spouse-gift-exception.html

I've done this myself upwards of half a million at a time with zero problems - banks expect this kind of thing to happen! It's part of what they do.

The absolute WORST thing that can happen is that the IRS will audit you and it will very clearly state whey they *think* the issue is and give you a chance to resolve it. It's actually very helpful because you get to see all of the income sources that reported in to the IRS. I've been audited before and it's actually helped me do my taxes better. You don't get penalized or thrown in jail lol. BTW, my audit was simply because of a misunderstanding and the IRS actually ended up owing me money.

Don't let others get you scared - transfering money via banks is done every day millions of times with zero problems.

[littlej 23]

Just to add to the discussion, the only thing i would maybe be concerned about with your fiance wiring you money is it looking like he is paying you to marry him. I'm sure that is not the case for you but i've seen this discussed at other times when people have mentioned sending money to the USC

[dxreed 4]

Actually, it's the FBI that monitors the amounts, not the IRS.

The 10K limit flips a signal from both banks to the FBI. They are required to report it to the FBI.

Actually, financial institutions electronically report to FinCEN which is a bureau within the US Department of the Treasury. But your main point remains valid... the OP has nothing to worry about under the circumstances presented.

[tehans 52]

use paypal, wire transfers are expensive.

[h13rma 35]

I did it all the time, no problem. As long as it is properly reported on your tax return its no issue. Over $10k is reported but so what if you aren't doing anything illegal then who cares if its reported. Ignorance of the law is indeed no exception, but paranoia is not much use either.

[Harpa Timsah 13,258]

The money is not reported on a tax return. The banks report it for you. It's not income - it's moving money.

[Sukie 1,463]

Actually, financial institutions electronically report to FinCEN which is a bureau within the US Department of the Treasury. But your main point remains valid... the OP has nothing to worry about under the circumstances presented.

I'm retired-Big 4, too, dxreed, so I appreciate your cogent answers.

Just remember, AFTER you send your money to the United States, if you earn any interest on it (hopefully it's in some interest-bearing account in the US), you will have to declare that interest in the appropriate tax year. Interest rates are so low right now that it should not be a big issue, but do remember to add it to your income.

Sukie

[Harsh_77 718]

It's risky to travel with cash, we don't want to risk him getting robbed in the airport..

You can use the credit / debit card or travellers cheque.

I dont think you would be robbed in the airport, not in the airport in US.

As Harpa said if you are bring on yourself than anything under 10k you do not need to declare, if more than 10K than you need to declare it to customs, in this case be ready to show the proof where the money came from, all theu do is investigate to make sure it is not drug related money.

You do not have to pay tax on it as the tax was already paid on it when you earned that money in your home country.

Once you have account you setup you can wire money to your account as well, same applies anything under 10k is normally not a problem if you wiring over a 10k than bank might ask you to provide more details.

Going next year if you still continue to own a foreign bank account go thru FBAR requirement fill that in with your tax return as appropriate to your situation at that time.

Edited September 10, 2013 by Harsh_77

[Operator 1,927]

Is money that is wired from a foreign country to the US taxable income? My fiance wants to wire me money (a small amount, less than 10,000) before he travels to my bank account. After he is here and has set up his own account he will wire the rest of his savings. Do we have to pay taxes on this money or declare it in any way if its being wired? Does it make a difference that the first transaction would be going from his bank account to mine, vs the second where it would be going from one of his own accounts to another?

Thanks!

As several other members have said there are no tax implication on the transfer, my wife transferred funds on several occasions after she was here and our bank did inform us that it would be reported. It's nothing to be afraid of.

FWIW compare the interest rates and the accessibility of the funds. If it's just cash sitting in a savings account in Peru is it earning more than it will here sitting in a savings account? He might just want to leave it there.

[Kitten24 5]

Here's a helpful site: https://help.cbp.gov/app/answers/detail/a_id/195/~/currency-%2F-monetary-instruments---amount-that-can-be-brought-into-or-leave-the

"There is no limit on the amount of money that can be taken out of or brought into the United States".