Most Americans are aware that they need to report and file U.S. Federal and, in some cases, State income tax returns annually, regardless of their residency. Meaning that American citizens living permanently or temporarily in Mexico must comply with this requirement every year by the deadline of June 15th for Expats. In some cases they also need to file and report income and pay taxes to Mexican authorities.
Most American Citizens did so voluntarily or selectively reporting Mexican sourced income to the IRS believing that the border and a foreign language allows them to shelter or evade taxes by not declaring income earned in Mexico. Until now. The Mexican Tax Authorities announced that as part of their ongoing collaboration with the IRS to obtain reciprocal information about Mexican citizens living abroad, they will now commence enforcing the treaty signed between both countries which is derived from the Foreign Account Tax Compliance Act (FATCA). Mexican tax authorities will pressure Mexican financial institutions to report information about financial accounts held by US taxpayers to the IRS. They will also require Mexican banks to provide lists of American citizens who have financial interest or are a signing authority over a Mexican bank account if the aggregate value exceeds $10,000 U.S. dollars at anytime during the calendar year. This includes bank accounts of a corporation over which the American citizen as signing authority.
Don’t wait until you are under the scrutiny of the IRS to get your taxes done right. Thanks to a collaboration between MexTax and an internationally renowned U.S. Tax and Accounting firm, you can now have your Mexican and US taxes properly prepared and reported, taking advantage of all the deductions and exemptions that you are entitled to in both countries. Contact us today and let’s get this done right the first time.
