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TaxTom
TaxTom, Public Accountant
Category: Tax
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Experience:  25 Years Experience in Personal and Small Business Tax Preparation
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I have a question regarding finance. I wanted to know when

Customer Question

I have a question regarding finance. I wanted to know when someone is doing two transfers not exceeding $10.000 each on two different accounts in two different banks in one month, does it count as a combined total when IRS look at it in the end of the year or it doesn’t really matter? I just don’t want pay the 5% tax on those transfers. How often can I do this kind of transfer (it is the same person all the time) and i don't have receipts or invoices for the things that I'm selling. Does it combine as a total?
Thank You
Submitted: 3 years ago.
Category: Tax
Expert:  TaxTom replied 3 years ago.
Hello, Since it is two different banks those are not considered combined. If you are audited for something else and they review your bank account and you do not have an explanation for that deposit they will consider it income and tax you on it. If it personal items you are selling they may require you get a statement from that person or if you advertised the item for sale then that is proof you sold an asset. Banks are not only required to report amounts over $10,000 but any suspicious activity, so if you mention to a teller that you split the deposit to be under the $10,000 law limit they would have to report the transaction. Thanks Tom

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