I live in South America and I'm working for a company in the USA. I'm planning on opening a US Bank Account from abroad (with the help of my local bank). In this case, I would receive my payment in my US Bank Account and then use Xoom services to transfer it to myself in my country.

My question about this is regarding the Income Taxes. In this scenario, I'm receiving money from a US company in a US bank account. Am I eligible for declaring my earnings to the IRS? What should I be searching in order to educate myself in this matter?

Thank you.


Am I eligible for declaring my earnings to the IRS?

You're always eligible. You're probably asking whether you're required.

In the US it doesn't matter where you deposit the money, it matters where you earn it. Money is earned where the services are provided. This is called "sourcing". So if you are working in a foreign country - you're only subject to the US laws to the extent you're a US citizen/permanent resident or qualify for the substantial presence test.

| improve this answer | |
  • So even if my money gets transferred to a US Bank Account and then wired to another country, do I fit into sourcing rule and I'm not required to declare my earnings to the US? – Marco Aurélio Deleu May 28 '16 at 11:24
  • @MarcoAurélioDeleu the taxes are applied to the person who earned the money, not the money itself. You can get the money deposited anywhere in the world, it would change nothing with regards to taxes. This is also probably true in your home country (in case you're considering depositing the earnings in the US bank account to avoid paying taxes at home). Some countries have special rules for citizens repatriating money earned while not at the home country, but that's not the case for you. – littleadv May 29 '16 at 5:02
  • That does make sense. Even with money deposited in US bank account, I'll have to pay taxes in my home country. My goal is just to lower the cost of wiring the money from a US Bank account owned by myself to a bank account also owned by myself in my home country. Although taxes will be the same, if I get my own US bank account, I'll be able to get about 3.5% more on the dollar. – Marco Aurélio Deleu May 30 '16 at 13:15

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.