Borderless Bank Accounts

[Peter vdberg]

I am European and live/work in Europe and my business is EU based. I am often paid in USD from clients aboard/US. I would like to use the borderless USD bank account from Transferwise who are UK based. However if you open a USD bank account with them it is held at a US bank in the US.

Would this mean I have to report anything to the IRS if using one of these accounts?

Thank you
Peter

 

[Taxing Matters]

I am European and live/work in Europe and my business is EU based. I am often paid in USD from clients aboard/US. I would like to use the borderless USD bank account from Transferwise who are UK based. However if you open a USD bank account with them it is held at a US bank in the US.

Would this mean I have to report anything to the IRS if using one of these accounts?

Thank you
Peter

For a nonresident alien of the U.S. interest on a bank account in the U.S. is not taxable income unless that account is effectively connected with a U.S. trade or business. If you have a trade or business in the U.S. then you need to file and pay income tax for that income anyway so adding in that interest would not be a big deal. If you do not have a U.S. trade or business then the account won't be subject to tax, but you will still need to complete a document with the bank confirming that so that the bank knows what its obligations are. The bank will provide you with the necessary documents to complete when opening the account.

 

[xylene]

If this doesn't meet your needs, consider a EU based bank that has a USD denominated product.

 

[PayrollHRGuy]

Especially since the UK may not be in the EU come March 2019.

 

[Peter vdberg]

Ok thank you for the advice