Tools
Foreign Currency to USD Converter (IRS Yearly Average Rates)
US tax returns are filed in US dollars, so foreign income has to be converted. This free tool uses the official IRS yearly-average exchange rates (tax years 2022 to 2025) to convert foreign income to USD, or the reverse. Important: yearly-average rates are for income on your return; foreign account balances on the FBAR and Form 8938 use the Treasury year-end rate instead. This is general guidance, not tax advice.
Converted amount
Rates are the IRS yearly-average currency exchange rates as published for tax years 2022 to 2025, refreshed when the IRS posts each year's averages. They apply to income reported on your return. Foreign financial account balances on the FBAR (FinCEN 114) and Form 8938 use the Treasury Reporting Rates of Exchange (year-end), not these averages. For a single transaction you may instead use the spot rate on that date. This tool is general guidance, not tax advice; confirm figures for your situation.
Which exchange rate do you use for a US expat tax return?
The IRS has no single official exchange rate. It accepts any posted rate that is used consistently, and for convenience it publishes a yearly average for each currency. In practice that yearly average is what most US expats use to convert a full year of foreign salary, self-employment, pension, or interest income into US dollars on Form 1040. That is what the converter above does.
Two situations use a different rate, and mixing them up is a common mistake:
- Account balances (FBAR and Form 8938): use the Treasury Reporting Rates of Exchange for December 31 of the year, not the yearly average. The FBAR reports the maximum value of each foreign account, converted at the year-end rate.
- A specific transaction (a property sale, a single large payment, a stock vesting): you may use the spot rate on the date of that transaction, which can be more accurate than a yearly average for a one-off event.
How the conversion works
The IRS publishes each rate as the number of foreign currency units that equal one US dollar. To convert foreign income to US dollars you divide by that rate; to go the other way you multiply. For example, 1,000,000 Japanese yen of 2024 income at the 2024 average of 151.353 yen per dollar is 1,000,000 divided by 151.353, or about 6,607 US dollars.
Frequently asked questions
What exchange rate does the IRS require for foreign income?
The IRS does not mandate one source. It accepts any exchange rate that is used consistently, and it publishes yearly average rates for convenience. Most expats convert annual foreign income using the IRS yearly average for the tax year.
Do I use the yearly average rate for the FBAR?
No. FBAR (FinCEN Form 114) and Form 8938 report account balances and use the Treasury Reporting Rates of Exchange for the last day of the year, not the IRS yearly average. The yearly average is for income.
What if my currency is not on the list?
The IRS publishes averages for the major currencies above. If yours is not listed, use another verifiable published rate (such as the Treasury rate or your country's central bank) applied consistently, and keep your source.
Which year's rate do I use?
Use the rate for the tax year the income was earned. Income earned in 2024 is converted at the 2024 yearly average, reported on your 2024 return.