# Anyone living in Mexico working from an online business?



## tipoli90 (Apr 17, 2016)

Currently looking to do this and I was wondering about the tax liabilities. Searching the forums, it looks like I wouldn't need to pay any income taxes in Mexico if I don't get clients from Mexico and this could be done on a non-working Visa. 

Has anyone currently been doing this for a while? 

Thanks!


----------



## tennal (Sep 17, 2016)

*online*

i have many friends here that do TUTORABC, or other english online teaching courses.

they dont have to do taxes for mexico... only for the country they are from. or maybe the country that they work for has HQ's....

tutor hq's is in Taiwan... i know they pay taxes for that... but i also think i remember that they pay taxes in the states too.

if you are looking for to teach english online but have no skills yet at it... tutor is a good place to start. for some its good, but not everyone likes the way they do things, so they use it to get the experience that the other companies are looking for then move over.


----------



## joaquinx (Jul 3, 2010)

You still have to pay taxes either to the US or to Mexico. I believe that Mexico's tax rates are lower and if you pay taxes to Mexico, you can deduct this earned income from your US taxes. I am no a CPA and it is best to see one else just continue to file and pay US taxes.


----------



## Meritorious-MasoMenos (Apr 17, 2014)

joaquinx said:


> You still have to pay taxes either to the US or to Mexico. I believe that Mexico's tax rates are lower and if you pay taxes to Mexico, you can deduct this earned income from your US taxes. I am no a CPA and it is best to see one else just continue to file and pay US taxes.



Well, if you live full time outside the U.S. and you're teaching English to I assume foreigners outside the U.S., you have to pay Social Security and Medicare taxes, but I believe that no income taxes are due on first $90,000 or something. Unsure what the amount is nowadays. 

I did it when I worked for a U.S. firm in Mexico. So, even though I got a check from a U.S. firm, it didn't deduct any income taxes, just the other two. But it is crucial to file. Also, of course, I paid no taxes to Mexico, which was all on the up and up, for journalists, anyway, but really, Mexico doesn't try to collect income taxes on money that earned from firms outside of Mexico.

In my last year, there were just so many things happening, I didn't bother with the paperwork, not owing anything. Once I got back to the States, about a year later, I got hit with a huge tax bill that involved a heavy penalty that was something like 100 percent of what the income taxes would've been if I had been working in the States. Fortunately, I have a strong heart as that was a nasty shock. I sorted it all out, proving to them I was indeed working outside the U.S. all of that year and got a letter back saying: "Sorry, you owe nothing."

Of course it didn't say "Sorry." The letter did acknowledge I owned the IRS no taxes or penalties for the year in question.


----------



## dwwhiteside (Apr 17, 2013)

First, I want to say that I am not an accountant either here in Mexico or in the United States. Having said that, I have been working and earning a living "on-line" for the past 15 years or so and for the last 4 years in Mexico. Here is what I know based on my experience.

First, Mexico taxes based on where the economic benefit is derived. In other words, where are you getting paid. Even after I moved to Mexico, I kept my US bank account and I continue to be paid in US dollars in my US account. Therefore, I derive no economic benefit from Mexico and so I pay no taxes in Mexico. This was explained to me by INM when I first moved here and was recently confirmed by SAT.

However, as a United States citizen, I owe US income taxes on my worldwide income. The US, by the way, is the only country on the planet that requires its citizens to pay taxes on worldwide income. As I understand it, if I was earning money in Mexico and paying Mexican income taxes on that money, I could deduct up to $90,000 (I actually think that figure is higher now) from my US taxes specifically to avoid double taxation on those earnings.

So, if you are working on line, whether or not you owe Mexican taxes is dependent on where you are being paid but you will absolutely owe US taxes. However, those US taxes could be offset somewhat if you are being taxed on that money by the country in which the money is being earned.


----------



## Gatos (Aug 16, 2016)

dwwhiteside said:


> First, I want to say that I am not an accountant either here in Mexico or in the United States. Having said that, I have been working and earning a living "on-line" for the past 15 years or so and for the last 4 years in Mexico. Here is what I know based on my experience.
> 
> First, Mexico taxes based on where the economic benefit is derived. In other words, where are you getting paid. Even after I moved to Mexico, I kept my US bank account and I continue to be paid in US dollars in my US account. Therefore, I derive no economic benefit from Mexico and so I pay no taxes in Mexico. This was explained to me by INM when I first moved here and was recently confirmed by SAT.
> 
> ...


Very similar situation. Yet - I believe there are a lot of expats who think they are entitled to that $90K earned income exemption whether or not they pay Mexican taxes - which I am sure they are not - but I also am not an accountant.

The one credit I do take is on the interest I pay Mexico on our passive income.

Finally - on another similar site a couple/few years back someone far more tax savvy than I did up a workup which claimed that for a US expat, paying US taxes was actually a better situation than paying Mexican taxes on the same income.


----------



## Meritorious-MasoMenos (Apr 17, 2014)

Gatos said:


> Very similar situation. Yet - I believe there are a lot of expats who think they are entitled to that $90K earned income exemption whether or not they pay Mexican taxes - which I am sure they are not - but I also am not an accountant.
> 
> The one credit I do take is on the interest I pay Mexico on our passive income.
> 
> Finally - on another similar site a couple/few years back someone far more tax savvy than I did up a workup which claimed that for a US expat, paying US taxes was actually a better situation than paying Mexican taxes on the same income.


We're all agreed it seems on that $90,000 income tax exemption, but again, I still had to pay Social Security and Medicare "contributions." They were taken automatically out of my U.S. issued checks, and income taxes were not, long as I worked abroad.

I don't know if that applies if the income is derived from some other country.


----------

