Best Ways to Send Money Online to Nepal

Every year, billions of dollars flow from the US to families abroad through remittances, lifelines that support households and fuel economies around the world.But in 2025, a major change could be on the horizon. The US government is proposing a new tax on these international money transfers, a move that may significantly impact how immigrants and non-citizens send money home. While the tax aims to increase federal revenue, it also raises crucial questions about financial fairness, access, and the cost of supporting loved ones overseas.This article breaks down what the proposed tax means, who it affects, and how it could reshape your money transfers, all in clear, straightforward terms to help you stay informed and prepared.What Is Government Remittance?Traditionally, government remittances refers to payments made directly to government bodies, such as taxes, levies, or regulatory fees. These are routine transactions between individuals or businesses and the state.But in the context of this new proposal, the definition shifts. The term now points to a government-imposed tax on personal funds sent overseas, essentially turning part of your money transfer into a government remittance payable. In short, the remittance you send to family or partners abroad could include a small portion collected as a fee by the US government.Understanding this shift in meaning is key. This isn’t about traditional taxation—it’s about adding a cost to something many people do regularly: sending money home. Let’s now explore what this proposed 2025 remittance tax looks like and who might be affected.Details of the Proposed 2025 Remittance Tax Building upon our earlier discussion of the evolving definition of government remittances, let's delve into the specifics of the proposed 2025 remittance tax.The proposed legislation, known as the “One Big Beautiful Bill Act,” seeks to impose a new tax on international money transfers conducted by non-citizens residing in the United States. This proposal has sparked considerable discussion as it could impact millions of immigrants who regularly send money to their families abroad.Tax Rate on RemittancesThe bill introduces a 3.5% tax on funds transferred internationally by individuals who are not US citizens. This tax applies to transfers made through banks, licensed money transfer operators, and other official channels. The tax would be collected at the point of transfer, making it a mandatory fee payable to the government on each outgoing remittance.Who Will Be AffectedThis tax will impact a wide range of non-citizens who send money overseas. Some of the key groups include:People with green cardsHolders of work or study visasTemporary residents living in the USLawful permanent residentsIn short, anyone who is not a US citizen but regularly sends remittances abroad may see increased costs.Purpose Behind the ProposalThe primary goals of this legislation are twofold:To increase federal revenue by taxing a previously untaxed source of income flow.To discourage illegal immigration by imposing a financial disincentive on sending money abroad without a legal status.Legislative Progress and What Comes NextThe bill has passed the House of Representatives and now awaits Senate approval, with a tentative vote expected by July 4, 2025. If passed and signed into law, the remittance tax could come into effect starting January 2026. While not yet law, this swift progress reflects growing legislative interest in regulating remittance flows and increasing federal revenue.What This Means for YouIf this tax becomes law, sending money abroad could become more costly for many non-citizens. However, remember that transferring money will remain a straightforward process. Using trusted remittance services and tools like CompareRemit’s exchange rate calculator can help you find the best value and keep costs as low as possible.Why Is This Proposal Controversial?The proposed remittance tax has raised concerns, especially among low-income immigrant families who depend heavily on sending money back home. For many, even a small additional cost can create a significant financial burden. There are also worries about potential double taxation, where the same money might be taxed both in the US and again in the recipient’s country. Legal experts have flagged possible challenges to the bill, questioning its fairness and implementation.Another key concern is that this tax might push some senders toward informal or unregulated money transfer methods. These unofficial channels can be risky and less transparent, increasing the chance of fraud or delayed payments. While the government aims to regulate remittances and increase revenue, the unintended consequences could complicate matters for those who rely on these transfers most.Countries Most Affected by the TaxThe United States is one of the largest sources of remittances globally, sending billions of dollars annually to countries such as India, Mexico, the Philippines, Nigeria, and others. These nations rely heavily on financial support from family members abroad to sustain their local economies and households. If this tax is enacted, it could lead to a reduction in the amount of money flowing into these countries. This impact would be felt not just by families but also by businesses and communities that depend on remittance income. Keeping track of these changes and using comparison tools like CompareRemit can help you find the most cost-effective way to send money and reduce fees.What This Could Mean for the US and Global EconomyIf the remittance tax proposal becomes law, its ripple effects could stretch well beyond US borders. One immediate concern is a possible dip in formal remittance volumes. When official channels become more expensive, many senders may turn to black-market or unregulated methods to avoid additional charges, posing new risks and reducing government oversight.Developing nations that heavily rely on US remittances, like Mexico, India, and the Philippines, may face financial slowdowns due to shrinking inflows. These funds often support basic needs, education, and healthcare in recipient countries.Additionally, there’s potential for diplomatic friction. Governments of affected nations may raise concerns or negotiate exemptions, especially if they see this policy as unjust or harmful to their citizens working legally in the US. Economically and politically, the world will be watching closely as this proposal unfolds.Looking Ahead: What This Means for Everyday SendersWhether you're a student, worker, or temporary resident, this proposal could directly impact how you support loved ones back home. As the 2025 remittance tax moves through the US legislative process, it has sparked an important conversation around financial fairness, immigration, and global money movement.Regardless of whether the tax becomes law, the demand for secure, affordable, and transparent remittance solutions will only continue to rise. That’s why it’s essential to stay updated and choose services that offer not only competitive rates but also a smooth, hassle-free experience.As lawmakers debate the future of this policy, planning ahead can help safeguard your finances. Use trusted platforms like CompareRemit to find the best exchange rates and minimise fees, because every dollar you send home truly matters.Frequently Asked Questions (FAQs)Q1. Will the remittance tax apply to all US residents or only specific groups?No, the proposed tax targets non-citizens sending money abroad. US citizens would likely be exempt. However, individuals on work visas, student visas, and green card holders could be impacted. The tax is designed to apply selectively, focusing on non-citizen outbound remittance flows.Q2. Are there any exemptions or thresholds under consideration for small remittances?As of now, the proposal does not mention any minimum transfer threshold or exemptions for small amounts. Even small remittances may be taxed at the flat rate if the law passes, which could disproportionately affect low-income senders. However, details could change during Senate discussions.Q3. Can businesses or employers also be taxed under this proposal when sending money abroad?No, the bill is focused on individual remittance transfers, not business transactions. Corporate or employer-led international payments (e.g., vendor payments, payroll for overseas staff) aren’t included in the current draft of the proposal.Q4. Could this tax affect family sponsorship or support applications for immigration?Not directly. The remittance tax is financial, not immigration-related. However, if it limits the ability of sponsors to show financial support for family members, it might influence eligibility in cases where proof of financial capacity is required.Q5. How might this tax affect the cost comparison between different remittance services?The new tax could make some transfer options more expensive overall, especially those operating legally. This might increase demand for services with lower fees or better exchange rates, making tools like CompareRemit essential for finding the best deals.

Sending money overseas is a lifeline for millions across the US. As digital transfers grow and money crosses borders faster than ever, 2025 brings a new wave of attention from regulators. The spotlight? Remittance tax planning.From updated reporting rules to shifting tax thresholds, financial advisors are keeping a close eye on what these changes mean for everyday senders. Know that transferring money is still secure and straightforward if you know the rules.In this article, we’ll walk you through the latest remittance news, what’s changing in the tax landscape, and simple steps you can take to stay compliant and confident. Today’s Remittance StoryWhen we talk about remittances, we mean the money sent by individuals in the US to support family, friends, or business contacts abroad—often through banks, online platforms, or money transfer services. For millions of immigrants and expats, these transfers go far beyond simple transactions. They represent vital support for education, healthcare, housing, and everyday needs back home.The US stands as one of the largest sources of outbound remittances globally. Recent updates in remittance news show billions of dollars flowing each year to countries like India, Mexico, the Philippines, and China. These funds significantly contribute to household incomes and help sustain local economies. Given their importance, changes in US remittance policy can have wide-reaching effects.US Remittance Taxation: How It Currently WorksNow that we understand the importance of remittances, let’s explore how the US tax system treats these money transfers. Understanding the rules can ease concerns and help ensure your transactions stay compliant.Generally, the IRS considers most personal remittances, such as sending money to family members abroad, as gifts rather than taxable income. As a result, these transactions typically do not create a tax liability for the recipient.However, larger transfers do come with reporting requirements:If you gave more than $17,000 to an individual in 2024, you are required to file Form 709 (United States Gift Tax Return). This doesn’t automatically mean you’ll owe gift tax—it simply informs the IRS that your gift exceeds the annual exclusion.In some cases, you may need to file Form 3520 if you receive large foreign gifts or inheritances, especially if they exceed $100,000 from a nonresident individual.Also, any transfer over $10,000, even if not taxable, may be subject to Bank Secrecy Act (BSA) reporting, intended to prevent money laundering and financial crimes. This is a compliance requirement, not a tax.The good news? Most personal remittances fall below these thresholds and remain non-taxable and uncomplicated.2025 Tax Plan Updates: What’s Changing?In 2025, a fresh wave of regulatory changes is beginning to reshape how remittances are taxed and reported in the US. Staying updated is essential for keeping your transfers smooth and stress-free.3.5% Excise Tax on RemittancesA major proposal introduces a 3.5% excise tax on remittances sent by non-US citizens or nationals. This tax applies to every transfer, no matter how small. Money transfer providers will collect this tax directly, making the process easier for senders.Enhanced Reporting and TransparencyTo support greater financial clarity, the IRS is introducing upgraded digital reporting systems. These tools aim to quickly flag suspicious activity, helping authorities monitor remittances more effectively without disrupting regular users.Tighter Controls on Crypto and Digital WalletsWith digital assets on the rise, new rules will require brokers to report crypto sales and exchanges using Form 1099-DAstarting January 1, 2025. Transfers via digital wallets will also come under closer watch to ensure proper tax reporting.State-Level Rules and AI MonitoringAdding another layer, several states may implement their own remittance taxes or regulations. At the same time, the IRS plans to use artificial intelligence to detect unusual or potentially fraudulent transactions for review.By understanding these evolving regulations, you can plan your remittance strategy accordingly, keeping your money flowing efficiently and in full compliance throughout the year.Impact of New Tax Plans on Different GroupsWith the 2025 tax updates coming into play, it’s important for both senders and recipients to understand how these changes may affect them. Let’s explore what different groups can expect and how to stay ahead.For Indian, Filipino, Nigerian, and Other Diaspora SendersUpcoming changes may bring enhanced documentation and clearer thresholds for tax-free transfers. While this means senders may need to stay more informed and mindful of their transfer limits, it also opens the door to more transparency and smoother compliance. By maintaining organized records and consulting with financial experts, senders can continue transferring funds with confidence and peace of mind.For Recipients in Home CountriesWhile recipients typically don’t owe US taxes on incoming remittances, increased oversight could lead to temporary holds or delays as banks in home countries verify transaction legitimacy. This can cause unnecessary stress or timing issues. On top of that, currency conversion fees and local tax policies might shift in response to these US changes, creating added layers of complexity. Staying informed about local financial regulations can go a long way in avoiding unpleasant surprises.These new policies are a shared concern, so both senders and recipients need to remain alert and proactive. By staying in tune with the latest remittance developments, you can help ensure smoother, worry-free transfers for everyone involved.What Financial Advisors RecommendAs remittance policies evolve, staying ahead doesn’t have to be stressful. A few practical habits can help you manage your transfers confidently and avoid complications down the road.Keep Track of TransactionsMaintaining a record of all your transfers is your first line of defence against confusion during tax season. Clear documentation can be a lifesaver if questions ever arise. Many senders now use digital platforms to stay on top of things. Tools like CompareRemit allow you to track transfer amounts and fees with ease, helping you stay informed without extra effort.Know the Legal LimitsIt’s equally important to understand when your transfers might cross regulatory thresholds. At present, transactions above $10,000 need to be reported, but as 2025 tax updates roll in, these numbers could change. Financial advisors recommend being aware of these shifts and suggest speaking with an expert for personalized guidance. The right advice can help you plan better and stretch your remittance value while staying within the law.By staying organized and proactive, you can send money abroad without second-guessing. A little planning now can save you time, stress, and money in the long run, making every transfer count.Staying Ahead With Remittance NewsAs remittance rules evolve in 2025, one thing remains constant—being informed is your best financial tool. Whether you're sending money to support family, invest back home, or meet personal obligations, understanding the latest tax changes and reporting requirements helps you plan with confidence.Platforms like CompareRemit are designed to support this approach. From real-time exchange rates to timely news and practical tools, they help you navigate cross-border transfers smartly, so you can focus more on your goals and less on the paperwork.Staying ahead isn’t just about knowing the rules, it’s about using that knowledge to make better decisions for you and your loved ones.Frequently Asked Questions (FAQs)Q1. What are the penalties for failing to report large remittances?If you don’t report remittances that exceed the IRS threshold, you could face civil penalties or audits. For instance, failing to file Form 709 (Gift Tax Return) when required may result in fines, even if no tax is owed. In more serious cases, this could trigger further investigation by the IRS.Q2. Can remittances impact my US immigration or visa status?Yes. Sending unusually large or frequent remittances without a clear source of income might raise questions during immigration reviews or visa renewals. It's important to ensure all transfers are well-documented and consistent with your declared income.Q3. Do remittances affect eligibility for government benefits in the US?Possibly. If you're receiving need-based government benefits (like Medicaid or SNAP), large outgoing remittances could lead to a review of your financial activity. Authorities may question how you can afford to send money abroad while receiving assistance.Q4. Are there any remittance exemptions for students or dependents?No specific exemptions exist for students or dependents under IRS rules. However, if you're sending money for education or living expenses, the same gift and reporting thresholds still apply. It’s advisable to keep receipts and explain the purpose of funds if requested.Q5. Can I deduct remittances from my US taxes?Generally, no. Personal remittances sent to family or friends do not qualify as tax-deductible expenses under IRS guidelines. However, if the money is sent as part of charitable giving through a registered 501(c)(3) organization, it may be deductible with proper documentation.

Have you ever paid any bill online, sent money through your mobile banking app, or used your debit/credit card at checkout? If yes, you have used EFT—whether you know it or not.If you are an immigrant, expat, or a small business owner, understanding what an EFT is and how it works will help you save a lot of time and money, particularly when you are sending money overseas.In this guide, you will learn the meaning of EFT, the working of various types of EFT, its benefits and drawbacks, and how to choose the right service for your requirements.What Is an EFT?EFT, short for Electronic Funds Transfer, is a method of digitally transferring money between accounts—sometimes within the same bank, sometimes between two different financial institutions. It is a secure and fast method, and doesn’t require cash or paper checks.How Does an EFT Work?EFT is just a method of moving money digitally. Whether you are sending money from one account to another, paying for online shopping, or giving out employees’ salaries, your bank uses the electronic system to process the transaction.The key players involved in an electronic funds transfer are as follows:The sender: The sender who initiates the transactionThe receiver: The person or the business that is receiving the moneyBanks or payment processors: They move the money between accounts.EFT networks: These comprise systems like SWIFT, ACH, or card networks such as MasterCard and Visa.There is no involvement of physical cash here. The entire process of transferring funds happens through computers and secure protocols.Types of EFT PaymentsThere are various types of electronic funds transfer methods. Let’s break down the top five types, so that you can make an informed decision on which is the best for your needs.1: ACH transfersACH stands for Automated Clearing House. Mostly used in the United States, it is the perfect method for business invoicing, payroll, and recurring bill payments. It takes 1-2 days for the transfer, and the fee is usually free or very low.2: Wire transfersWire transfers are best for large amounts or urgent transactions, especially overseas. Domestic wires are completed within the same day, whereas international wires may take up to 5 business days, depending on the currency and the bank. It can be expensive due to the sender or receiver fees and intermediary bank charges.3: Debit and credit card paymentsEvery time you tap, swipe, or enter your card details online for payment, you are making an electronic funds transfer. Cards are used for everyday shopping and online transactions. It involves the MasterCard and Visa networks. The risk of potential fraud also exists with cards, so always keep your card details secure.4: Mobile wallets and payments appsThere are various apps built for transfer, such as Google Pay, Apple Pay, PayPal, and Venmo. These apps allow store payments and instant peer-to-peer transfers. They are very easy to use, convenient, and quick. The only limitations are geography and the amount transfer limit.5: ATM transfersElectronic funds transfer also involves using your debit or credit card to transfer or withdraw money through bank ATMs. Some banks charge an ATM withdrawal or transfer fee if you are using a card from another bank.EFT vs. Online Money Transfer Services (like Wise or Remitly)When you think of sending money, especially internationally, you must often think of companies like Wise, Remitly, or Western Union. These are money transfer services, not the same as EFTs, although they often use EFTs to move money in the background.Let’s understand the difference.FeatureEFT (Electronic Funds Transfer)Online Service (like Wise or Remitly)DefinitionA digital method to move money between bank accountsPlatforms built specifically for sending money, often internationallyUse casePayroll, paying bills, and bank-to-bank transfersSending money to family/friends abroad, business transfersTransfer modeUses ACH, SWIFT, or card networksUses EFTs, but adds extra services and layersSpeed and feesDepends on type (ACH: 1–2 days, Wire: Same day)Often faster, but may include service fees and markupsBest forDomestic transfers, direct bank-to-bank paymentsPersonal or business transfers with added featuresIf you are wondering which is the ideal fit for you, then:Use EFTs when you are transferring between bank accounts directly or setting up recurring domestic payments (like rent or payroll).Use money transfer services like Wise, Remitly, etc. when you want a more user-friendly experience for international transfers, especially if the recipient does not have a bank account or you want competitive exchange rates.How Long Does an EFT Take?The amount of time taken for electronic funds transfer depends on the type of EFT.Type of EFTSpeedACH1-2 business daysBank wire transferSame day or next dayDebit card or credit card2-5 business daysMobile wallets and payment appsInstant or near instantATM transfersImmediate authorizationTo find out about the fastest and most cost-efficient international money transfer methods, check out CompareRemit’s rate comparison tool.What Does an EFT Cost?While EFTS are very cost-efficient, the fees vary based on the method or the provider. The fees for ACH transfers are usually free or a nominal fee. Wire transfer can cost $15 - $50, depending on the bank and country or recipient. Cards and wallets may include currency conversion costs for international use. Always double-check hidden fees, exchange rates, or delays before finalizing your transfer.Benefits of EFT PaymentsHere are the reasons for you to consider EFT payments:Affordable: No middlemen, printing, or postage involved.Speed: You can send money anytime, anywhere.Security: It is regulated, trackable, and encrypted.Great for recurring bills: It is perfect for payroll and recurring bills. Set it and forget it.Paperless: There is no requirement for any checks or physical cash.Drawbacks of EFT PaymentsEFT payments have some downsides as well. Here's what you should be cautious about:Reversal: If you have sent money mistakenly to someone, it may be lost. Reversals are not at all easy, especially with bank wire transfers.Frauds: Electronic funds transfers are still vulnerable to potential phishing and identity theft.Fees on international transfer: Banks and traditional wire transfers might include many hidden charges.Pro tip: To avoid risks, always use a comparison tool and verified platforms before sending the money.What is the Electronic Funds Transfer Act?The Electronic Funds Transfer Act was passed in 1978. It protects the United States’ consumers making EFT transactions. It limits the liability if you quickly report when your card is stolen or lost. It gives you the right to dispute any unauthorized charges. It also requires the banks to show how EFTs work and what your rights are.Understanding your rights is vital, especially if you are transferring a large amount of money overseas or running a business.Compare and Choose SmartElectronic Funds Transfer is here to stay, and they have made moving money globally without physical cash or paper checks easier than ever. But with so many options available today, choosing the right service to transfer money overseas to save time and money can be difficult.Whether you are transferring money to your family, making a business payment, or managing funds internationally, CompareRemit’s exchange rate calculator tools and comparison engine can help you save a lot of time and money, enabling you to make smart decisions.Frequently Asked Questions (FAQs)Q: What is the difference between an EFT and an ACH?An EFT (Electronic Funds Transfer) is a broad term for any electronic movement of money, while an ACH (Automated Clearing House) payment is a specific type of EFT that uses the ACH network. Essentially, all ACH payments are EFTs, but not all EFTs are ACH payments.Q: What is the difference between RTGS and EFT?RTGS (Real-Time Gross Settlement) enables the immediate, individual transfer of high-value funds, while EFT (Electronic Funds Transfer) is a broader term, which can include various methods of electronic transfer with different processing speeds. Q: Is EFT the same as Swift?No, EFT (Electronic Funds Transfer) and SWIFT are not the same. EFT is a broad term for any electronic movement of money, while SWIFT is a messaging network used by financial institutions to send instructions for international money transfers.Q: Is Wise or Remitly an EFT?No, Wise and Remitly are not EFTs themselves—they are money transfer services that use EFT methods (like ACH or wire) to move your money. These platforms often offer faster delivery, currency conversion, and added services for sending money internationally.Q: What is the difference between EFT and ACH?EFT is a broad term for any digital money transfer—ACH, wire, card, or mobile payments. ACH is a type of EFT that uses the ACH network, mainly for U.S.-based direct deposits and bill payments. All ACH transfers are EFTs, but not all EFTs are ACH.