Kelly Suzan Waggoner is a Personal Finance Editor at AOL and the former US editor-in-chief at Finder, where she worked with a talented team of expert writers and editors focused on helping readers to save money, earn money and grow their wealth. She joined Finder in 2016 as an editor, germinating the site from money transfers to include the wide scope of personal finance. Kelly has worked with publishers, magazines and nonprofits throughout New York City to develop best practices around editorial, SEO, plain language and accessibility, including Black Dog & Leventhal Publishers, HauteLife Press and Queerty. She is quoted on such sites as Lifehacker and CertifiKid, and ghostwrote Copyediting and Proofreading for Dummies, published by Wiley. Kelly earned a BA in English from Russell Sage College and a Poynter ACES Certificate in Editing from Poynter News University. She is trained in digital and website accessibility and plain language, and is a member of ACES: The Society for Editing and the Center for Plain Language. Between projects, she toys with words, flips through style guides and fantasizes about the serial comma’s world domination. See full bio
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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. |
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.
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