Expat Tax Issues- While Living in Mexico

Expat tax issues are a growing concern for us. For years, moving to a foreign country has been a way to avoid paying US taxes. The IRS, through tax treaties, has increased its ability to track expat income and what they deem as taxes owed by US citizens living abroad.

New forms, declarations, specific tax forms now needed!

Forms, declarations, specific tax forms and deadlines are now required on foreign income and holdings and countries are now communicating with each other in order to collect taxes from expats residing in each other’s country. Past rules and regulations have changed in the past few years and the expat is wise to keep up with them or be subject to taxes and fines that could add up in the 10’s of thousands of dollars even though no tax is owed.

It is very important for the expat to stay on top of these changes, even though they may not owe any tax, to avoid these penalties and estimated income taxes on the years the expat did not file.

Fideicomisos and more...

Fideicomisos are considered to be a trust, which is what it is, and the IRS expects specific information on that trust, along with certain forms, in order to determine if any tax is owed by the expat. Additionally, many expats form a corporation or LLC in order to own property within the restricted zone, AKA beach/border property, and these corporations fall under scrutiny as a taxable corporation.

Read this Carefully

Please, please, please look at the following, incomplete, advice in order to avoid these tax pitfalls. DO NOT ACCEPT THIS INFO AS ALL INCLUSIVE! All content is subject to change and not conclusive. Make good choices and seek advice from an international CPA to avoid any issues with the IRS.

Side note: Each US consulate should have an IRS agent available to avoid issues. I do believe in paying my legal “FAIR SHARE” but not a penny more. Seek good legal advice on these issues.

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Expat Tax Advice

Getting good tax advice is essential to retirees planning to spend their retirement years in Mexico or in other countries.

It is extremely important for the expat to get qualified advice from a CPA with country specific information and experience to ensure that the expat’s transition goes smoothly.

Some suggestions and considerations are as follows... Click here for more Expat Tax Advice info!

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