What Do You Mean?

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Sending money online is easier than ever these day, especially when you consider the availability of money transfer and third-party wallet accounts. An increase in the use of transfer companies has led to people making common mistakes when sending money online, so here we cover a few of the most common mistakes and offer possible solutions so that you do not repeat your mistakes.

What Do I Mean By Third-Party And Transfer Accounts

When referring to transfer accounts and transfer companies, I am referring to online accounts that transfer money without storing it. For example, Transferwise allows you to create online money transfers, but it was not designed for holding money. However, PayPal allows you to transfer money, but it is also …show more content…

Trying To Hide Overseas Income

If you are getting currency from overseas and it is classified as income, then your tax return will become more difficult to fill out, and you may have to pay extra taxes. In order to avoid this, some people will have foreign currency transferred into a third-party account, convert it, and then either withdraw or transfer it.

H4 - - Avoid These Mistakes When Sending Money Online
You are free to do this if you wish, but there is a chance you will be in trouble with the IRS if they discover that you are receiving currency from abroad. When the IRS looks at your bank statement, they will see your currency (US dollars) entering your account from your third party service. However, if they dig deep and take a look at your third party account, they will see that you have been receiving money from overseas--and they may decide to punish you for not declaring it. If you want to avoid any chance of getting in trouble, then declare your overseas income on your tax return.

Using A Credit Card Rather Than A Debit Card

Some online money accounts will allow you to either fund your account with a credit card and/or will allow you to transfer money by linking a credit card. It is more common with third-party services that also allow you to buy things. However, unless your transfer is signaled as a purchase, it is likely to be regarded as a cash advance.

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