US Expat Taxes in Mexico
Mexico is home to approximately 800,000 US citizens, making it one of the largest American expat communities worldwide. Whether you live in Mexico City, on the Pacific coast, or in popular retirement destinations like San Miguel de Allende, understanding your dual tax obligations is essential.
Tax Treaty Information
- Reduced withholding rates on dividends (5-10%), interest (4.9-15%), and royalties (10%)
- Pension and annuity income provisions
- Independent and dependent personal services provisions
- Real property income and gains taxation rules
- Government service income allocation
FBAR & FATCA Requirements
US citizens in Mexico must report all Mexican bank accounts, investment accounts, AFORE retirement accounts, and any other financial accounts on the FBAR if aggregate values exceed $10,000. Mexico has a FATCA intergovernmental agreement.
Foreign Earned Income Exclusion (FEIE)
US expats in Mexico can qualify for the FEIE through the Bona Fide Residence Test or Physical Presence Test. Mexico's progressive income tax rates (1.92%-35%) are generally lower than US rates, making the FEIE particularly beneficial for many expats.
Need Expert Help Filing from Mexico?
Our Enrolled Agents specialize in US expat tax filing and can ensure you're fully compliant with both US and Mexico tax obligations.
Common Tax Issues in Mexico
- 1Mexican AFORE retirement accounts have uncertain US trust reporting implications
- 2RFC registration requirements for tax residents
- 3Property rental income must be reported on both Mexican and US returns
- 4Mexican ISR withholding on services and its interaction with FTC
- 5Temporary vs. permanent resident status affects Mexican tax obligations differently
- 6Cash transaction reporting rules in Mexico
Filing Deadlines
Local Tax Rates
1.92%-35%
10% on stock market gains; up to 35% on other gains
16%
Local Resources
US Embassy in Mexico City
Consular services for US citizens in Mexico
SAT (Servicio de Administracion Tributaria)
Mexican tax authority
IRS International Taxpayers
IRS resources for US citizens abroad
Frequently Asked Questions: US Taxes in Mexico
Do I need an RFC number as a US expat in Mexico?
How is my Mexican AFORE retirement account treated?
Can I use the FEIE for my Mexico-sourced income?
Do I need to report my Mexican property on US forms?
Related Country Guides
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