Is money transfer using online banking between spouses taxable

[AbSam2021]

Both me and my wife are residing in USA on work visa. we are salaried and file joint taxes every year. If my spouse transfers funds from her bank account to mine, is that considered income in any way and Is there any tax implication on her or on me due to this

[Opus 17]

No, there are no tax implications for spouses transferring money.

However, do be aware that US banks are required to report transactions over $10,000 to the IRS.  This is mainly a defense against money laundering, and it is very unlikely that anyone will look into transfers that you make for legitimate purposes.  But, if you structure your transfers so that you make many small transfers instead of one large transfer, for the purpose of avoiding the reporting limit, that can sometimes constitute a separate financial crime called "Structuring."  So just do your business normally and don't try to get clever. 

[Critter-3]

NO ... money being moved between spouses is not a taxable event.  

[AbSam2021]

Thankyou for your response. In a day, the online banking facility caps the amount of transfer at 10K. So If she had to transfer 40K, lets say, she would need to repeat the transaction of 10K daily for 4 days. She would for sure not want to do it in small chunks, like, 2K per day for 40 days.  I think what you mean is that she could use other methods like issuing instructions to bank for transferring the money in 1 go, or issue a check?

[Opus 17]

@AbSam2021 

If the banking facility caps transfers, that should be a defense against a claim of structuring.  However, federal authorities do not always have “common sense” in their vocabulary.   There are many cases where “civil forfeiture” has allegedly been abused by government authorities.  

I’m not an attorney and can’t give legal advice.  For large sums, a wire transfer might be safer for multiple reasons, depending on the financial institutions involved.  You may want professional help if you are concerned.  

[Helen123]

Hi, I assume you mean US bank needs to report the transcation over 10,000 to IRS. But in person, if I transfer money to my spouse more than 10,000, I do not need to report it, right?

If my spouse is non-citizen, do I need to report my transfer to IRS? I assume I only need to report it to IRS if the total money I tansfer to my spouse is more than 167,000, right?  

[Opus 17]

---

@Helen123 wrote:

Hi, I assume you mean US bank needs to report the transcation over 10,000 to IRS. But in person, if I transfer money to my spouse more than 10,000, I do not need to report it, right?

If my spouse is non-citizen, do I need to report my transfer to IRS? I assume I only need to report it to IRS if the total money I tansfer to my spouse is more than 167,000, right?  

---

Banks have their own rules for reporting transactions.  You can ignore those rules and let the banks do whatever they need to do. 

If you hand over cash, that by itself is not reportable.  However, if you withdraw that much cash, the bank may have reporting requirements.  And a person crossing the border (entering or leaving the US) with more than $10,000 (US or US equivalent) of cash must declare it to Customs and Border Patrol, but no tax is owed, you must make the declaration.  

The exclusion limit for gifts from a US person to a non-US citizen who is your spouse is $175,000 for 2023.  Gifts over that limit must be reported and gift tax may be owed.   If required, you would report the gift and pay the gift tax yourself, the bank or CBP don't do that for you.  

https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-tax...

(Personally, I would avoid traveling with large amounts of cash, if a bank transfer could be done instead.)

[Helen123]

Many thanks. Yeah, I will not deal it with cash. Definitely by bank transfer. Let us make it simple.

1. So, if I transfer my money by bank to my non-US citizen spouse less than 175,000 USD per year, I do not need to report anything to IRS or do anything to anyone. If I transfer more than 175,000 in 2023, I have to report it to IRS. 

2. BTW, if I transfer my money from my account to another account, such as from bank A to bank B, or from checking to CD account.  I assume there are no limit and I do not need to report anything. 

Can you please confirm it is correct or not?  

[Opus 17]

@Helen123 

1. Correct.  
2. There are no tax limits, banking limits, or reporting requirements for moving money from one account that you own into another account that you own. (Moving your own money around.)

[Helen123]

Nice. Many many thanks 🙂 Just one more thing in detail,

If I transfer 14,000 USD  in one single transction to my spouse, I do not need to report anything, right? Bank may do some report on their own rules, but we do not need to care because it is normal transaction. 

[Opus 17]

@Helen123 

correct again.  

[Helen123]

many thanks 🙂