How Do I Send Money Internationally as a U.S. Citizen Abroad?
You can send money internationally through a bank wire transfer, an online money transfer service, or a peer-to-peer app. The best method depends on how much you are sending, how fast it needs to arrive, and how much you are willing to pay in fees. As of January 1, 2026, a new 1% federal excise tax also applies to certain international transfers funded with cash, money orders, or cashier’s checks under the One Big Beautiful Bill Act (OBBB), though electronically funded transfers are exempt.
The most common methods for sending money abroad are:
- Online money transfer services (Wise, Remitly, OFX, Xoom) for the best exchange rates and lowest fees
- Bank wire transfers for large amounts, when you need a traditional, traceable method
- Peer-to-peer apps (PayPal/Xoom, Western Union app) for convenience and speed
- Cryptocurrency transfers for tech-savvy senders seeking low fees and fast settlement
Here is how each method works, what it costs, and what you need to know about taxes, reporting, and the new remittance fee.
Sending Money Across Borders?
What Are the Best Ways to Send Money Internationally?
Online Money Transfer Services
Online transfer services like Wise, Remitly, OFX, and Xoom specialize in international money movement. They typically offer better exchange rates, lower fees, and faster delivery than traditional banks.
- How they work: You create an account, link your U.S. bank account or debit card, enter the recipient’s details, and the service handles the currency conversion and delivery. Most transfers arrive within minutes to two business days, depending on the destination and delivery method.
- Best for: Regular transfers to family abroad, paying foreign contractors or service providers, moving money between your own accounts in different countries, and expats who need to transfer income or savings between the U.S. and their host country.
Bank Wire Transfers
A bank wire transfer moves money directly from one bank account to another using the SWIFT network. This is the most traditional method and is widely used for large transfers, real estate transactions, and business payments.
- How they work: You visit your bank (in person or online), provide the recipient’s bank name, account number, SWIFT/BIC code, and the recipient’s name and address. The bank initiates the transfer, which typically passes through one or more intermediary banks before reaching the destination.
- Best for: Large transfers ($10,000+), real estate purchases, business-to-business payments, and situations where both parties prefer a bank-to-bank transaction for documentation or legal purposes.
Peer-to-Peer and Mobile Apps
Apps like PayPal (via Xoom), Western Union, and MoneyGram allow you to send money internationally from your phone. These services offer cash pickup, mobile wallet delivery, and bank deposit options in many countries.
Best for: Smaller amounts, cash pickup in countries where recipients do not have bank accounts, and quick transfers when convenience matters more than cost.
Cryptocurrency
Some expats use cryptocurrencies (such as Bitcoin and stablecoins like USDC) to move money across borders. Blockchain-based transfers can settle in minutes with low transaction fees, but involve exchange rate volatility (unless using stablecoins) and require both sender and recipient to use crypto wallets or exchanges.
Best for: Tech-savvy senders, transfers to countries with limited banking infrastructure, and situations where traditional transfer methods are slow or expensive. Note that crypto transactions have their own U.S. tax reporting requirements.
How Much Does It Cost to Send Money Internationally?
Every international transfer involves two costs: the service fee and the exchange rate markup. Some providers advertise “no fee” transfers but build their profit into a less favorable exchange rate, so it is important to compare the total cost, not just the headline fee.
| Method | Typical Fee | Exchange Rate Markup | Delivery Speed | Transfer Limits |
|---|---|---|---|---|
| Online services (Wise, OFX) | $0 to $10 | 0.3% to 1.5% | Minutes to 2 business days | Up to $50,000+ per transfer |
| Online services (Remitly, Xoom) | $0 to $5 | 1% to 3% | Minutes to 3-5 business days | Up to $50,000 per transfer |
| Bank wire transfer | $25 to $50 outgoing | 1% to 6% | 1 to 5 business days | Varies by bank (often $25,000+ per day) |
| Western Union / MoneyGram (online) | $0 to $10 | 1% to 4% | Minutes to 3 business days | Up to $50,000 (with documentation) |
| Western Union / MoneyGram (cash in person) | $5 to $15+ | 2% to 5% | Minutes to the same day | Varies by location |
| Cryptocurrency | Network fee ($1 to $10) | Varies (stablecoins: minimal) | Minutes | No inherent limit |
For recurring transfers (such as sending money to family monthly or moving your own salary between countries), the exchange rate markup matters more than the flat fee. A 2% markup on a $5,000 transfer costs you $100, while a flat $5 fee with a 0.5% markup costs only $30 total. Compare the total delivered amount, not just the fee.
What Is the New 1% Remittance Fee?
Starting January 1, 2026, the One Big Beautiful Bill Act (OBBB) introduced a 1% federal excise tax on certain international money transfers sent from the United States to recipients abroad. This is codified under new IRC Section 4475.
Who Pays It?
The 1% fee is collected from the sender by the remittance transfer provider (companies like Western Union, MoneyGram, and other licensed money transmitters) at the time of the transaction. The recipient abroad does not pay this fee, and the amount they receive is not reduced.
When Does the 1% Fee Apply?
The fee applies only to transfers funded with physical instruments:
- Cash is handed to an agent at a retail location
- Money orders
- Cashier’s checks
- Similar physical payment methods
When Is the Fee Exempt?
The fee does not apply to transfers funded electronically:
- Bank account withdrawals (ACH, direct debit from a checking or savings account at a BSA-regulated financial institution)
- U.S.-issued debit cards
- U.S.-issued credit cards
- Wire transfers initiated directly from a U.S. bank account
- U.S.-issued prepaid cards
What This Means in Practice
If you send money internationally using Wise, Remitly, OFX, Xoom, or any service where you fund the transfer from your bank account or with a debit/credit card, you will not pay the 1% remittance fee. The fee only applies if you physically bring cash, a money order, or a cashier’s check to a transfer agent.
Example: You send $2,000 to your family in Mexico. If you fund the transfer from your U.S. bank account in the Remitly app, you pay no remittance tax. If you bring $2,000 in cash to a Western Union retail location, you pay a $20 excise tax on top of the normal transfer fee.
The 1% remittance fee is not deductible on your U.S. income tax return. It is a separate excise tax with no credit or refund mechanism against your federal income tax.
Does the Fee Apply to Inbound Transfers?
No. The fee only applies to outbound transfers from a sender in the United States to a recipient in a foreign country. If you live abroad and receive money from the U.S., or if you send money from a foreign bank to a U.S. account, the fee does not apply.
Do International Money Transfers Have Tax Implications?
For Americans living abroad, international money transfers can trigger several tax-related obligations. Moving money across borders is not, in itself, a taxable event, but the IRS closely tracks foreign financial activity.
FBAR Reporting
If the total value of your foreign financial accounts exceeds $10,000 at any point during the year, you must file a Report of Foreign Bank and Financial Accounts (FBAR) with FinCEN by April 15 (automatically extended to October 15). This applies to all foreign bank accounts, investment accounts, and certain financial interests, regardless of whether any transfers were made. FBAR is a reporting requirement, not a tax.
FATCA Reporting (Form 8938)
If your foreign financial assets exceed $200,000 on the last day of the year or $300,000 at any point during the year (for single filers living abroad), you must also report them on Form 8938, which is filed with your tax return. The thresholds are higher for married couples filing jointly.
Gift Tax Rules for Transfers
If you are sending money as a gift, different reporting thresholds apply:
- Gifts to U.S. persons: You can give up to $19,000 per recipient per year (2026) without filing a gift tax return. Amounts above that require filing Form 709, though you likely will not owe gift tax until you exceed the lifetime exemption.
- Gifts received from foreign persons: If you receive a gift or inheritance from a non-U.S. person exceeding $100,000 in a year, you must report it on Form 3520. This is a reporting requirement, not a tax, but the penalty for not filing is significant (up to 25% of the gift amount).
Currency Conversion and Income
Transferring your own money between accounts is not taxable. However, if you hold foreign currency and it appreciates before you convert it back to dollars, the gain may be taxable as ordinary income. For most expats making routine transfers, this is not a practical concern unless you are holding large amounts of foreign currency as an investment.
Does the IRS Track International Transfers?
Yes. Banks and transfer providers report certain transactions to the IRS and FinCEN:
- Transfers of $10,000 or more trigger a Currency Transaction Report (CTR)
- Suspicious patterns of transfers just below $10,000 (“structuring”) can trigger a Suspicious Activity Report (SAR)
- Foreign banks share information with the IRS under FATCA intergovernmental agreements
None of this means you owe taxes on the transfer itself. It means the IRS has visibility into your foreign financial activity, which makes accurate reporting on your tax return and FBAR essential.
How Do I Choose the Best Transfer Method?
| Your Situation | Recommended Method | Why |
|---|---|---|
| Monthly transfers to family ($500 to $2,000) | Online service (Wise, Remitly) | Low fees, good rates, fast delivery, and exempt from 1% fee |
| Moving salary to U.S. account ($5,000+/month) | Online service (Wise, OFX) or bank wire | Best rates for larger amounts; bank wire for documentation |
| One-time large transfer ($25,000+) | Bank wire or OFX | Higher limits, traceable, suitable for real estate or investments |
| Recipient needs cash pickup | Western Union or MoneyGram (funded via debit card online) | Wide agent network; fund digitally to avoid 1% remittance fee |
| Transfers between your own accounts | Bank wire or Wise | Your own accounts in two countries; no gift reporting needed |
| Tech-savvy, low-fee priority | Cryptocurrency (stablecoins) | Minimal fees, fast settlement; watch for tax reporting on gains |
Step-by-Step: How to Send Money Internationally
- Step 1: Choose your transfer method. Compare the total cost (fee + exchange rate markup) using comparison tools or checking provider websites directly for your specific corridor (e.g., USD to GBP, USD to PHP).
- Step 2: Gather recipient information. You will typically need the recipient’s full legal name, the bank name, the account number or IBAN, the SWIFT/BIC code (for bank wire transfers), and the recipient’s address. For cash pickup services, you may only need their name and location.
- Step 3: Fund the transfer electronically. Use your U.S. bank account, debit card, or credit card. This avoids the 1% remittance fee and provides a traceable record for tax documentation.
- Step 4: Confirm the exchange rate and fees before sending. Most services show you the total cost and the amount your recipient will receive before you confirm. Lock in the rate if the option is available.
- Step 5: Save your confirmation and receipt. Keep records of every international transfer for your tax files, especially if amounts could trigger FBAR, FATCA, or gift reporting thresholds.
- Step 6: Coordinate with your tax strategy. If you are an American living abroad, your international transfers are part of a larger financial picture that includes FBAR, FATCA, the Foreign Earned Income Exclusion, and the Foreign Tax Credit. An expat tax professional can help ensure your transfers are properly documented and your reporting is complete.
Common Mistakes to Avoid
- Structuring transfers to stay under $10,000: Breaking up a large transfer into smaller amounts to avoid reporting thresholds is illegal. Banks and transfer providers are trained to detect this pattern, and failure to do so can result in criminal penalties.
- Forgetting to file FBAR: If your foreign accounts exceeded $10,000 at any point during the year, you must file FBAR, even if you did not make any transfers that year. Penalties for non-filing start at $16,536 per report for non-willful violations.
- Using cash to fund international transfers: As of 2026, cash-funded transfers incur a 1% remittance fee. Switching to a bank account or debit card avoids this cost entirely.
- Ignoring gift reporting: If you receive large gifts or inheritances from foreign persons, Form 3520 is required. Missing this form triggers penalties of up to 25% of the unreported amount.
- Not comparing total costs: A “free” transfer with a 3% exchange rate markup on a $5,000 transfer costs $150. A $5 transfer fee with a 0.5% markup costs $30. Always compare the total delivered amount.
Frequently Asked Questions
There is no federal legal limit on how much you can transfer. However, individual banks and transfer services set their own transaction limits. Transfers of $10,000 or more are reported to the IRS and FinCEN. You may need to provide additional documentation (such as proof of income source) for very large transfers.
No. Sending your own money to another country is not a taxable event. However, you may need to report the transfer (FBAR, FATCA, or gift tax return) depending on the amount and circumstances. The 1% remittance fee is a separate excise tax that applies only to cash-funded transfers.
Fund your transfer electronically. Use your U.S. bank account, debit card, credit card, or a U.S.-issued prepaid card. Only transfers funded with physical instruments (cash, money orders, cashier’s checks) are subject to the fee.
For most people, online transfer services like Wise and OFX offer the lowest total cost because they use real or near-real exchange rates and charge minimal fees. Bank wire transfers are the most expensive option, with fees averaging $45 outgoing plus a 1% to 6% exchange rate markup.
Yes. The 1% remittance fee does not apply to inbound transfers. Your foreign bank will charge its own wire transfer fee, and the receiving U.S. bank may charge an incoming wire fee (typically $15). Online services like Wise also support transfers from foreign currencies to U.S. accounts.
The transfer itself does not trigger FBAR. FBAR is based on account balances, not transactions. However, if the transfer causes your foreign account balance to exceed $10,000 at any point during the year, you will need to file a report. If you already have foreign accounts that exceed the threshold, you should file an FBAR regardless of any transfers.
Your Transfers and Your Tax Return Work Together
International money transfers are a routine part of life for Americans abroad. But the tax reporting that surrounds them, including FBAR, FATCA, gift reporting, and now the 1% remittance fee, requires attention. Getting these details right keeps you compliant and avoids penalties that can cost far more than the transfer itself.
If you are ready to be matched with a Greenback accountant, get started here. For general questions about expat taxes or working with Greenback, contact our Customer Champions.
Move Money Internationally Without Tax Surprises
This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws and remittance regulations are complex and subject to change. Always consult with a qualified professional regarding your specific situation.
Related Resources
- FBAR Filing Requirements
- FBAR vs. FATCA: Which Do You Need to File?
- U.S. Expat Taxes: The Complete Guide
- Foreign Earned Income Exclusion
- Foreign Tax Credit Guide
- Digital Nomad Taxes
- U.S. Expat Tax Deductions and Credits
- Tax Deadlines for U.S. Expats
- How to File U.S. Taxes While Abroad
- Form 1040 for U.S. Expats
