Lands on Schedule C, Part I — Gross receipts, translated to dollars

If every agency that pays you is in the United States and pays in dollars, this article is not for you. Nothing below changes a domestic invoice.

Two things are true about an agency in Madrid or Tokyo that most translators learn separately and late.

Nothing will arrive in January to tell you what you earned. And the number on the invoice is not the number that goes on your return, because it is not in dollars yet.

Both facts hand the same job to you, and it is a job that can only be done on the day the money lands.

Here only for the FBAR rate?Convert each account's highest balance at the Treasury's rate for 31 December of the year you are reporting, and divide by the rate rather than multiply. The 31 December 2025 rates for fifteen currencies are further down.

The short answer

The situation What applies
Foreign agency, no 1099 Reportable in full anyway
Which rate The one prevailing when you received it
An official IRS rate There isn't one
Your functional currency The U.S. dollar
Money left sitting abroad Watch the $10,000 line
Which rate for the FBAR Treasury rate for the last day of the year
FBAR form and route FinCEN 114, not your tax return

No form is not no income

The information return rules put the obligation on U.S. payers. An agency outside the United States is generally outside them, so no 1099 is coming and none was required.

That decides who files a form. It decides nothing about what you owe. A translator with ten overseas agencies and zero forms has ten sources of fully reportable income and no paperwork prompting any of it — which is the normal shape of the problem, not a special case.

The practical consequence is that your invoice ledger is not a bookkeeping nicety. It is the only record of the income that exists anywhere.

The rate is the one from the day

Here is the whole translation rule, and it is one sentence:

"Use the exchange rate prevailing when you receive, pay, or accrue the item. If there is more than one exchange rate, use the one that most properly reflects your income."

Not the rate when you invoiced. Not the rate when you moved the money to your own bank. The rate prevailing when you received it.

And your reporting currency is not in question:

"The U.S. dollar is the functional currency for all taxpayers except some qualified business units."

Every euro invoice becomes a dollar figure, fixed on a date.

There is no official rate, which is the part to write down

The IRS does not publish a rate you must use:

"You can generally get exchange rates from banks and U.S. Embassies."

It does publish yearly average currency exchange rates as a convenience, which suits a translator billing the same agency in the same currency all year far better than it suits one large payment in a volatile month.

Because there is no single correct source, the source becomes part of the record. A figure with no rate and no date behind it cannot be explained later; the same figure with "€2,400 received 12 March, 1.0850, bank rate" behind it explains itself.

Four columns, one line per paymentDate received · currency and amount · rate used and where it came from · dollars. Written on the day, it takes fifteen seconds. Rebuilt in February from a bank statement that only shows the converted total, it cannot be done at all.

A worked line: an agency pays €2,400 on 12 March. At 1.0850 that day, the income is $2,604. You leave it in the platform and convert in June at 1.1200, receiving $2,688.

Your income is $2,604 — the receipt-date figure. The $84 difference is about holding foreign currency, not about what you earned, and it is a question for your preparer rather than something to quietly fold into the income line.

The filing that is not part of your return

This is the one that surprises people, because it has nothing to do with income and everything to do with a balance.

You must file an FBAR if both are true:

"You have a financial interest in or signature or other authority over at least one financial account located outside the United States"

and

"The aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported."

Read the two emphasised parts carefully.

Aggregate — every foreign account added together, not tested one by one. Three accounts of $4,000 are $12,000.

At any time — a peak, not a year-end balance. Money that arrived in August and left in September counted while it was there.

A translator who is paid into a platform, lets balances accumulate through a busy quarter and sweeps them out twice a year can cross $10,000 without ever having opened what they would call a foreign bank account. The test is a financial account located outside the United States, which is worth establishing about any platform holding your money before you assume it does not apply.

Where and when. FinCEN Form 114, filed with the Financial Crimes Enforcement Network through the BSA E-Filing System — not with your tax return, and not by your tax preparer unless you have asked them to. The deadline is April 15, with an automatic extension to October 15 that requires no request.

Which exchange rate the FBAR uses

Not the rate you used for the income. This is the point most easily crossed over, because the same money is being converted twice for two different purposes. Publication 5569 sets the FBAR method: find the highest value each account reached, in its own currency, and then

"convert the maximum account value for each account into U.S. dollars using the exchange rate on the last day of the calendar year."

And it names the source:

"use the Treasury Reporting Rates of Exchange for the last day of the calendar year. If no Treasury Financial Management Service rate is available, use another verifiable exchange rate and give the source of that rate."

Income on your return Maximum value on the FBAR
What is converted Each payment Each account's peak for the year
Which rate Prevailing when received Last day of the calendar year
Which source Any reasonable one, recorded Treasury Reporting Rates of Exchange

Where to find it. The Treasury publishes the table on its Fiscal Data site, updated quarterly. The row you want is the one dated 31 December of the year you are reporting.

Divide, don't multiply. Each rate is the number of units of the foreign currency that make one dollar. On 31 December 2025 the table gives the euro as 0.851, the pound as 0.743 and the yen as 156.61. A balance in euros is divided by 0.851 to reach dollars; multiplying would shrink it instead.

The rates for 31 December 2025, for fifteen of the more than 160 currencies in the Treasury's table. The last column is what 10,000 units of each came to, the quickest way to see how near an account in that currency sits to the FBAR's $10,000 line.

Currency Units per dollar, 31 December 2025 10,000 units in dollars
Euro 0.851 $11,751
British pound 0.743 $13,459
Canadian dollar 1.369 $7,305
Mexican peso 17.956 $557
Japanese yen 156.61 $64
Indian rupee 89.854 $111
Australian dollar 1.495 $6,689
Swiss franc 0.792 $12,626
Chinese renminbi 6.998 $1,429
Philippine peso 58.911 $170
Brazilian real 5.477 $1,826
Israeli shekel 3.191 $3,134
Korean won 1,443.75 $7
Singapore dollar 1.285 $7,782
Hong Kong dollar 7.784 $1,285

For any other currency, the full table is on the Treasury's site; take the row dated 31 December. The 31 December 2026 rates, for FBARs reporting 2026, will replace these once the Treasury publishes them.

So the €2,400 from March enters your income at the March rate, and — if that account's peak was, say, €11,000 in October — the FBAR converts the €11,000 at the Treasury rate for 31 December. For 2025 that is €11,000 ÷ 0.851 = $12,926. Two conversions, two dates, and neither one substitutes for the other.

What this reduces to

Three habits, all of them cheap on the day and impossible later:

  1. Log every payment when it arrives — date, currency, amount, rate, source of the rate, dollars.
  2. Know where each platform holds your money, because that is the question the $10,000 line actually asks.
  3. Check the peak, not the balance. The FBAR test is the highest point the year reached, and nothing in your February statements shows it. Convert that peak at the Treasury rate for the last day of the year — not at the rate you used for the income.

No form is coming to remind you of any of this. That is precisely why the record has to be made while the money is still moving.

If you have moved abroad yourself, there is a larger number than either of these: the foreign earned income exclusion removes income tax, and it does not touch self-employment tax.

Common questions

A European agency paid me and sent no 1099. Do I report it?
Yes, in full. The reporting rules oblige U.S. payers; an agency outside the United States is generally outside them. That changes who files a form, not what you owe. Income is reportable whether or not an information return exists.
Which exchange rate do I use for the income?
The IRS rule is the rate at the moment of the transaction: "Use the exchange rate prevailing when you receive, pay, or accrue the item. If there is more than one exchange rate, use the one that most properly reflects your income."
Does the IRS publish an official rate?
No. The page says you "can generally get exchange rates from banks and U.S. Embassies." The IRS publishes yearly average rates as a convenience, but there is no single official rate you are required to use — which is why the source you used belongs in the record next to the number.
What is my functional currency?
The U.S. dollar. The IRS states it is "the functional currency for all taxpayers except some qualified business units," so a freelance translator reports in dollars even when every invoice was in euros.
I was paid in March and converted in June at a better rate. Which is income?
The income is fixed by the rate prevailing when you received it. What happens to the currency afterwards is a separate question about holding foreign currency, not about how much you earned, and it is one to put to your preparer rather than fold into the income figure.
When do I have to file an FBAR?
When both conditions are met: you have "a financial interest in or signature or other authority over at least one financial account located outside the United States," and "the aggregate value of those foreign financial accounts exceeded $10,000 at any time during the calendar year reported." Aggregate and at any time — not a year-end balance, and not one account at a time.
Which exchange rate do I use for the FBAR?
Not the one you used for the income. Publication 5569: "convert the maximum account value for each account into U.S. dollars using the exchange rate on the last day of the calendar year." The rate to use is the Treasury Reporting Rates of Exchange for that last day; if no Treasury Financial Management Service rate is available, "use another verifiable exchange rate and give the source of that rate."
Where do I find the Treasury rate, and do I multiply or divide?
On the Treasury's Fiscal Data site, in the Treasury Reporting Rates of Exchange table: take the row dated 31 December of the year you are reporting. Each rate is the number of units of the foreign currency that make one dollar, so divide. The euro stood at 0.851 on 31 December 2025, so a peak of €11,000 is $12,926.
Where is the FBAR filed and when?
Not with your tax return. FinCEN Form 114 goes to the Financial Crimes Enforcement Network through the BSA E-Filing System. The deadline is April 15 with an automatic extension to October 15 — no request needed.
Does a payment platform balance count as a foreign account?
It can, and this is where translators are caught out. The test is a financial account located outside the United States, not whether you think of it as a bank. If a platform holds your money abroad, find out where the account sits before you assume it is outside the rule.

This article is for educational purposes only and does not constitute tax, legal, or financial advice. Consult a qualified tax professional about your situation.

Official sources