Quick answer
The cheapest way for most US freelancers to get paid from abroad is a multi-currency account such as Wise or Payoneer. The client pays in their local currency to local bank details, and you convert to dollars at close to the market rate. For card payments, use Stripe. PayPal and bank wires are convenient but usually cost more once currency markups are included.
For taxes: foreign clients don’t send you a 1099, but you still report all the income in US dollars on Schedule C and pay self-employment tax on it.
Payment options compared
| Method | How the client pays | Costs to watch | Best for |
|---|---|---|---|
| Wise | Local transfer to your EUR, GBP, CAD etc. account details | Low, transparent conversion fee | Regular clients in major currencies |
| Payoneer | Local receiving accounts, marketplace payouts | Receiving and conversion fees | Platforms and marketplaces |
| Stripe | Card or local payment methods through an invoice link | Card fee + international card and conversion fees | Clients who want to pay by card |
| PayPal | PayPal balance or card | Cross-border fee + currency conversion markup | Clients who insist on PayPal |
| Bank wire (SWIFT) | International wire to your US bank | Sending, intermediary and receiving fees, poor exchange rate | Large one-off payments |
| Contractor platforms (Deel and similar) | The client pays through the platform | Often paid by the client | Clients that use them for all contractors |
Tips to keep more of your money:
- Invoice in the client’s currency through a local account, or in USD if you want the client to take the exchange risk.
- Compare the exchange rate you get with the mid-market rate. The markup is often the biggest cost.
- Put who pays transfer fees in your contract (“all bank fees are the client’s responsibility”).
Tax rules for foreign income
You still report everything
Foreign clients aren’t required to issue US 1099s. Report all payments as gross receipts on Schedule C, line 1. See How to Report Income Without a 1099.
Convert to US dollars
Use the exchange rate on the date you received each payment, or the IRS yearly average rate. Apply one method consistently. Conversion fees and transfer fees are deductible business expenses.
W-9, not W-8BEN
If a foreign client asks for tax paperwork, give them a Form W-9. The W-8BEN is only for non-US persons. Signing one would be incorrect.
Foreign tax withheld
Some countries withhold tax on payments to foreign contractors. If tax was withheld from your payment, you may be able to claim a foreign tax credit (Form 1116, or directly on Form 1040 for small amounts) so you aren’t taxed twice. A tax treaty may also reduce or remove the withholding; ask the client what form they need.
Foreign account reporting: FBAR and Form 8938
If you hold money in accounts maintained outside the US, extra reporting may apply:
- FBAR (FinCEN Form 114): required if the combined value of your foreign financial accounts exceeds $10,000 at any time during the year. It’s filed online with FinCEN, not with your tax return, and is due April 15 with an automatic extension to October 15.
- Form 8938: required for a single US resident whose foreign financial assets exceed $50,000 at year-end or $75,000 at any time (higher for joint filers).
Is Wise foreign? It depends on which Wise entity holds your account. Accounts held by Wise US Inc. aren’t foreign; balances held by Wise’s European or UK entities may be. Payoneer works the same way. Check your account terms, and if in doubt, file. Penalties for missing an FBAR can be steep.
Worked example
Sofia, a US-based UX designer, has a German client who pays €4,000 a month into her Wise euro account. She converts it to USD each month.
- Annual income: €48,000, which she converts at the rate on each payment date: $52,300.
- Wise conversion fees: $240, deductible.
- Her euro balance peaked at €8,500 (about $9,300), and her account is with Wise US Inc., so no FBAR is needed. If it were a foreign entity and her balance crossed $10,000, she would need to file one.
She reports $52,300 on Schedule C, pays quarterly estimated taxes on it, and keeps Wise statements showing each conversion.
Frequently asked questions
Do foreign clients send a 1099?
No. You report the income yourself.
Should I charge in USD or the client’s currency?
USD protects you from exchange rate swings. The client’s currency makes it easier for them to pay and can win work. Many freelancers use local currency through Wise and price in a buffer.
Is income from foreign clients taxed differently?
No. It’s ordinary self-employment income, subject to income tax and self-employment tax.
Do I need to charge VAT or GST?
Generally, a US freelancer selling services to a business abroad doesn’t charge that country’s VAT; the business accounts for it. Selling digital products to consumers abroad can be different. Check the rules for your clients’ countries.
This article is general information, not tax advice. Consult a CPA or Enrolled Agent for your situation.
Related guides
- What to Do When a Client Doesn’t Pay Your Invoice
- Wrong Amount on Your 1099? How to Get It Corrected
- 1099-NEC Explained: New $2,000 Threshold and What It Means for Freelancers
- 1099-K Threshold 2026: Back to $20,000 and 200 Transactions
About this guide
Written by the Freelancer Tax HQ editorial team, based on our professional experience, official US government sources (IRS, SSA and other agencies) and reputable informational articles listed in the sources below. Last reviewed on . Tax rules change often, and we update this guide when they do. Read our editorial policy or report an error.
Sources
IRS: Yearly average currency exchange rates; IRS: Report of Foreign Bank and Financial Accounts (FBAR); IRS: Comparison of Form 8938 and FBAR requirements; Taxes for Expats: reporting Wise and Revolut accounts on FBAR; IRS: Foreign tax credit. Example figures are FreelancerTaxHQ illustrations.
Official resources linked in this guide: IRS: Tax preparer credentials; FinCEN: BOI reporting.