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BANE

Nov 19, 2010, 9:41 PM

Post #1 of 7 (4788 views)

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Do you foreigners pay your U.S. taxes for the money you make in Mexico?

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I was recently told of this new law. I haven't made any money in the states in years so I haven't filed in years.

mevale

Nov 20, 2010, 6:21 PM

Post #2 of 7 (4711 views)

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Re: [BANE] Do you foreigners pay your U.S. taxes for the money you make in Mexico?

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In Reply To

I was recently told of this new law. I haven't made any money in the states in years so I haven't filed in years.

It's not new. When you file your US tax return (provided you make more than the minimum filing amount), you have to report foreign interest paid. You then take a credit for the taxes paid to the foreign entity (such as Mexico). You may be referring to the FBAR rules, which state that if you have more than $10,000US AGGREGATE in foreign accounts, these must be reported to the Treasury Dept (not the IRS) every year that the account(s) total more than $10,000US aggregate. This form is called a 90-22.1 and is, I think, due by June 30th in the following fiscal year.

(This post was edited by mevale on Nov 20, 2010, 6:40 PM)

morgaine7

Nov 20, 2010, 7:04 PM

Post #3 of 7 (4691 views)

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Re: [BANE] Do you foreigners pay your U.S. taxes for the money you make in Mexico?

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I was recently told of this new law. I haven't made any money in the states in years so I haven't filed in years.

Nothing new about it. Prior to retiring in Mexico, I worked outside the US for 28 years since 1976 and was always required to declare my foreign income. Foreign earned income under a certain amount (something like $80,000 /year) can be excluded using form 2555, so I never had to pay tax on mine, but I still had to file returns and report it. Please see this IRS link: http://www.irs.gov/...0,,id=180946,00.html

Kate

BANE

Nov 20, 2010, 9:07 PM

Post #4 of 7 (4658 views)

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Re: [morgaine7] Do you foreigners pay your U.S. taxes for the money you make in Mexico?

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Hmm....I haven't filed in years. How much trouble could one get into without filing for 5 years?

yucatandreamer

Nov 20, 2010, 9:31 PM

Post #5 of 7 (4651 views)

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Re: [BANE] Do you foreigners pay your U.S. taxes for the money you make in Mexico?

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I lived and worked in Canada for 30 plus years without filing a U.S. tax return. I never made enough to have had to pay taxes on my income over and above what I paid in Canada, but I should have filed. After my parents died I was involved with my family in the estate which had tax obligations in the U.S.A. At that time I started to file a U.S. tax return. I live in Mexico now and I have been filing a US return now for about 10 years along with a Canadian one since my money is in accounts in Canada. I have never been questioned by the IRS on what happened to me for 30 years.

You could check with the IRS by phone or an accountant for accurate advice, but like I said, I filed in 1969 and then again in 2002 and so far there have been no questions or repercussions.

BANE

Nov 21, 2010, 7:45 AM

Post #6 of 7 (4603 views)

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Re: [yucatandreamer] Do you foreigners pay your U.S. taxes for the money you make in Mexico?

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Thanks so much YucatanDreamer...I am thinking about moving back to the U.S. so that's why I am worried a little. The violence has even hit where I am at now. I own a restaurant here and surely don't want the Zetas hitting my place for protection money etc. I guess I will work things out with my accountant if I ever go back.

IslaZina

Nov 21, 2010, 10:37 PM

Post #7 of 7 (4535 views)

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Re: [morgaine7] Do you foreigners pay your U.S. taxes for the money you make in Mexico?

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File everything both countries and save your facturas: Foreign tax paid is deductible in the US as is your other overhead, for the others reading this.
http://islazina@blogspot.com