If you are a U.S. citizen living abroad and expecting a tax refund, it can be a little bit tricky to receive the money.
The IRS will only deposit tax refunds into U.S. bank accounts, not to foreign accounts.
So if you’re living abroad and you no longer have an American bank account, there are a few ways you can receive your refund.
You can receive a paper check in the mail. You will need to find out if your foreign bank will cash a U.S. check. It’s a good idea to ask your bank this question before filing your taxes.
You can apply your refund to next year’s taxes to reduce any out of pocket tax payment you might have in the next year.
One of the best solutions we have found is to receive your tax refund via TransferWise.
TransferWise is a popular service used by many expats to transfer funds between bank accounts in different countries. If you set up a multi-currency account with TransferWise, you can receive money in over 50 currencies.
For example if you have a Mexican bank account, you can use TransferWise to receive money in Mexico.
TransferWise provides a routing number and an account number, just like any other bank. You can use these numbers on your tax return when filling out the direct deposit section. This way, the IRS will deposit your refund into your transferwise account, and then you can transfer it from there to your non-U.S. bank account and withdraw the money in your local currency.
How to get paid into your TransferWise account
Simply log in to your TransferWise account and click on your USD balance. Here you will see your account number and your ACH/ABA number. These are the two you need to submit to the IRS web portal to receive a direct deposit. Be sure not to select the wire transfer number accidentally.
And if you haven’t created an account with TransferWise yet, click here to get started. It’s free and takes just a few clicks.