Tax Issues for Americans Living and Working in Mexico – A Redux for 2012

Happy Dead Presidents Day !
In honoring the memories of Mssrs. Lincoln, Jackson, Washington et al, it gets one thinking about who they were, how they were portrayed … and   are portrayed on the US currency.

Which leads my wandering mind to the Benjamins,    and how it is that time of year again. The time of year when our banks, employers, mutual fund companies  send us notices of our income from last year,   which allows us to pay our annual tribute to the State and Federal Governments.

Brave readers   who venture into reader’s Comments on other articles  have noticed that there have been a spate of questions about tax issues for expats living  and working in Mexico.   This year’s questions have taken on more specific and detailed forms than ever, even to the level of requesting specific advice about their particular situations.   scary, nu ?

As a frequent filer since age 9,   I have done tax returns for friends, neighbors, fellow grad students, co-workers, alien friends (a.k.a. resident aliens from Mexico), family members, and for parts of 3 different businesses.    Yet,  even after living here for 7 years, I never got around to reading the US-Mexico Tax Treaty of 1993,   since our returns have been relatively simple.

Anyway,  getting back on point,  several Yucatan readers have asked some particularly good questions that I thought I knew the answers to,    but for which I had no/zip/zero/nada references   –  just the partial remembrances of past tax and  IRS stories from  talented friends who have worked and lived overseas for decades.

Ready to go down the rabbit hole?    (or through the looking glass…)
It’s time to roll up our sleeves and tackle the US-Mexico Tax Treaty – 1993. …. Continue reading…

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Readers who want to read the full Article can go to:   Tax Issues for Americans Living and Working in Mexico – A Redux for 2012

For readers with US Tax obligations:   Yucalandia has a growing body of US IRS information in several articles:

~ Capital Gains Taxes on Mexican Properties
~ Income Tax Liabilities in Mexico
~ Fideicomisos and FATCA: US – Mexico Agreement on FATCA Reporting Requirements

~ IRS Reporting Requirements for Mexico: Fideicomisos / Mexican Land trusts
~ FBAR’s and Fideicomisos: To File or Not to File, That is the Question ,
~ US Income Tax Filing Information for Ex-Pats
~ Tax Issues for Americans and Other Expats Living in Mexico
~ Updated 2011 IRS Requirements: Foreign Account Tax Compliance Act (FATCA)
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Feel free to copy while giving proper attribution: YucaLandia/Surviving Yucatan.
© Steven M. Fry

Read on, MacDuff.

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3 Responses to Tax Issues for Americans Living and Working in Mexico – A Redux for 2012

  1. richard5108 says:

    I went to INM in Cancun on January 7th and submitted my renewal application. It was logged in on their web site on the 11th. I have not seen a thing since. I sent them and email through there web site with no sensible answer. I wnet back over to Cancun last Thursday Feb 14th and the woman outside said they are way behind, wrote my name in a big book and my # on a 2″ x 4″ piece of paper full of like numbers.

    I told her this is ridiculous that I need the FM2 to conduct business while here.

    Do have any incite on this fiasco? Or suggestions for some action?

    RICHARD LOWE 5108 RIVERVIEW DR INDIANAPOLIS, IN 46208 317-446-4753 Cell

    • yucalandia says:

      Hi Richard,
      I can validate your experience. Other old-hand expats who have dealt with Q. Roo’s governmental offices for decades report that INM in Q.Roo is notorious for being monstrously slow. Short of hiring a lawyer who has juice/connections with the INM Q.Roo office, I think you have to wait. Could you do your business out of Yucatan: Our systems work much better here.

      Just for perspective: You have waited a little over a month to have your application processed. For comparison: My wife’s application with the US Government for the same type of status required… over 700 pages of documentation, 45 hours of work, and it took the US Feds almost 2 years to get it right… That actually only got us a provisional “Temporary” Permanent Residency card. Gotta love it, leave it to the US Govt to create a “temporary” permanent status – passing off a conditional 18 month status as “Permanent Residency”.

      And yes, the Mexican charges for a permit that has FAR broader rights are about 3X less than the US charges.
      So, 5X-10X faster service at a 3X lower cost is a big problem?

      Consider that Canada, Germany, Australia, New Zealand et al are far more difficult to get into than even the USA…
      Which makes Mexico’s process look like a walk in the park. *grin* or *groan* ???
      All the best,

  2. Volkhard Bongers says:

    Good reading!!!!!!!!!!!!!!!

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