Every year, thousands of nonresidents in the U.S. are entitled to claim a tax refund. But there’s just one problem…
Many tax filers experience complications when attempting to secure their tax refund from the IRS while outside the U.S.
The most straightforward way to receive your refund is to have it transferred to your bank account. However, the IRS will only transfer to U.S. bank accounts and not to overseas accounts.
So, if you have left the U.S., or you don’t have an American account, what options do you have to receive your refund?
Side note: here are some top tips to follow if you are filing your tax return from outside the U.S.
No matter where you are in the world, Sprintax makes the process of claiming your U.S. tax refund super easy!
In this guide, we’ll take a look at some of the options you have for claiming your tax refund if you do not have an active American bank account.
1. Check
Every year countless nonresidents opt to claim their tax refund in the form of a check.
However, it’s important to be aware that if you’re outside the U.S. you may experience difficulties in accessing your tax refund as you might find that banks in your home country will not cash U.S. checks.
So, before opting to claim your refund as a check, be sure to ask your local bank whether they cash American checks.
If not, it’s probably best for you to choose another option.
2. Advance the amount owed to a future tax return
Some nonresidents choose not to claim their tax refund and instead advance the amount owed to a future tax return.
If you choose this option you will be able to use your refund to reduce any tax liability you owe next year.
And, if you don’t owe any money to the IRS, you will be entitled to claim a larger amount back on your next return (this year’s refund plus anything you are owed next year).
3. Direct deposit
If you want your money as quickly as possible, you can use a direct deposit. While the IRS can take weeks or months to mail a paper check internationally, a direct deposit is usually processed within 21 days of your return being accepted.
How it works for nonresidents
The IRS does not deposit tax refunds into foreign bank accounts. To use this method, you must provide a 9-digit U.S. Routing Number and a U.S. Account Number.
Even if you have already left the U.S., you can still use direct deposit if:
- You kept your U.S. bank account open – simply provide the account details during your Sprintax filing process;
- You use a Digital Bank (like Wise)
4. Receive your tax refund with Wise
As mentioned above, there is no doubt that the most straightforward and fastest option for receiving your tax refund is to have it sent to a bank account.
If you have left the U.S. and no longer have an active American bank account, Wise can help you.
By setting up a Wise multi-currency account you can receive money from over 30 countries (including from the IRS in the U.S.!), with zero fees.
Plus, you can convert your refund from U.S. dollars to your local currency and enjoy better conversion rates than you will find in a bank!
When setting up your Wise account you must deposit $20. You will then receive your account and routing numbers.
When you have your Wise routing and account numbers you can choose to receive your tax refund via wire transfer from the IRS. Simply select ‘U.S. Bank Transfer’ from the drop-down menu in Sprintax.
You can set up a Wise account here.
Please note Wise is a separate company and not connected with Sprintax. There may be other companies who can provide the same service.
Got questions about your U.S. tax refund?
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Haven’t filed your nonresident tax return yet?
Start your 1040-NR filing with Sprintax today and choose the most convenient refund method.
