My husband is an American citizen while I'm an Australian. We intend to move to Australia in few years. We reside in the USA at the moment. If I transfer my husband's saving to my Australian bank now, will I get taxed on that money? Or does he need to report somewhere in his next tax return?
You don't pay taxes on savings you pay taxes on earned Iincome, i.e. any interest.– VictorApr 19, 2017 at 0:26
My understanding is that the only tax implication is that any interest income earned on foreign accounts is still taxable in the US if held by a US citizen.
If the total across foreign accounts totals more than $10,000 you'll have to report those accounts to the Treasury via FinCEN Form 114, this doesn't create any additional tax obligations, it's just a regulatory measure to stop people from hiding money overseas and not paying tax on those earnings.
If the US account is only in your husband's name, and the Australian account is only in your name, there may not be any reporting requirement to the Treasury. Money transferred between spouses is not subjected to gift-tax.
is it only reporting that my husband needs to do or do we have to pay taxes on the savings that we transfer to australia. The bank account is under my name. Apr 18, 2017 at 17:14
In the US, you only pay taxes on the interest the foreign account earns. So if he was named on the accounts it's just seen as him moving his money from one account to another, no tax implication. The Treasury wants to know about foreign accounts, so they require the reporting, but still no extra tax implication. If he is not named on the account in Australia, then there may be no reporting requirement, it's less clear to me in the situation when he's not named on the account.– Hart COApr 18, 2017 at 17:21
Thank you for your answer.When I moved to the US from Australia, I didn't close my savings account. I can't add my husband to the account unless we are physically there in Australia. My husband suggested that we could transfer his savings (his sole account) to my account in Australia now since we both will be going to live in Australia in couple of years. He just wants to transfer bit by bit rather than transfer or take a large lumpsump later. Apr 18, 2017 at 17:31
what if he gifts $10 k to each of my parents in Australia. Is he exempted from paying the gift tax ? is there a threshold as to how much of a gift amount can be exempted from the gift tax Apr 18, 2017 at 17:35
I believe the gift limit (before gift tax applies) is $14k/year per recipient, but he can gift you all the money with no gift tax obligation.– Hart COApr 18, 2017 at 17:38