Money in two countries

A budget with a line nobody else has

Your co-residents' budgets have rent, a car, and loans. Many IMG budgets have one more line: money sent home to parents, siblings, or a household that helped pay for medical school. It is not optional, and it is not small. This module puts that line into a real resident budget, prices the cost of moving the money, and covers the US reporting rules for accounts and investments abroad. Those reporting rules apply to US persons, which includes US-citizen IMGs from day one and visa holders once they become US tax residents. Immigration rules change, sometimes by the month. Before you act on anything here, confirm it with your program's GME office, ECFMG (part of Intealth) if you hold a J-1, and an immigration attorney. For the tax pieces, add a tax professional familiar with international returns.

A resident budget with a $500 remittance

Dr. Haddad, PGY-2 FM in Pennsylvania on an H-1B, $68,000 salary, single, 2026. Federal tax uses the $16,100 standard deduction; FICA is 7.65%; Pennsylvania's flat 3.07%. Retirement contributions and local tax ignored. Spending figures are illustrative.

Bottom line: The remittance is about 11% of take-home pay ($500 / $4,548.37). What is left, about $960, has to cover exam and licensing fees, a flight home, clothes, eating out, and any emergency savings. A J-1 resident in a FICA-exempt year would have about $433 more each month, until the exemption ends.

What the transfer itself costs

Dr. Haddad sends $500 a month for the three years of residency. Compare a 3% spread plus a $5 fee against a 0.5% spread with no fee. Spreads are illustrative.

Bottom line: The spread on a 3% service costs $180 a year on its own. Paying in cash can add another $60 a year in excise tax. Funding the transfer from a bank account avoids that tax, and comparing the amount received tells you the real price.

FBAR and Form 8938: two filings, two thresholds

Both filings cover money held abroad, and you may need both. Neither one is a tax. Both kick in once you are a US person for tax purposes: a citizen, a green card holder, or a visa holder who meets the substantial presence test. The FBAR uses the highest balance of each account during the year, added together, so a short spike can trigger it.

The home-country mutual fund

A mutual fund or ETF organized outside the US is generally a passive foreign investment company (PFIC) for a US taxpayer. That label brings an annual Form 8621 for each fund in many cases, and a default tax regime on gains and certain distributions that is far harsher than the rules for a US fund. The fund your family's bank recommended, held for years before you became a US tax resident, can become an expensive filing problem the year you become one. Bank deposits and fixed deposits are not PFICs, though they still count toward the FBAR and Form 8938 thresholds.

How to avoid it: Before you become a US tax resident, and again before buying any foreign fund, list every foreign investment by type and ask a tax professional familiar with international returns how each will be treated and what elections, if any, are available.

Insurance questions a visa holder should ask

Disability and life insurance protect the income your family abroad may depend on. A visa adds questions a US citizen never has to ask. Tap each card.

Check yourself

One question on the FBAR threshold.

What to remember

• A $500 remittance is about 11% of an FM resident's take-home pay; build the budget around it.
• A 3% spread on $500 a month costs $180 a year before fees; cash-funded transfers add a 1% excise tax since 2026.
• Once you are a US person for tax purposes, foreign accounts above $10,000 in aggregate at any time require an FBAR.
• Form 8938 starts above $50,000 at year-end or $75,000 at any time for a single filer living in the US.
• Home-country mutual funds are generally PFICs; ask before you buy or before you become a US tax resident.

Do this next: Write down every account and investment you hold outside the US with its highest balance this year. Then check whether you are a US tax resident for this year and whether that total crosses $10,000.