# Mexican Taxes for "Returning" to Mexico



## elderp (Aug 22, 2018)

I put returning in quotes because I never really lived in Mexico (at least not as an adult). I was born in the USA, but my father who is Mexican registered me as a Mexican. I have dual USA/Mexico citizenship. I have worked and lived most of my adult life in the USA. I have paid taxes my whole life to the USA. I have a Mexican passport and a CURP number. I am getting to the point where I can probably retire in a few years. I will have a decent pension, a lot of US investments (primarily in brokerage accounts), and maybe even some Social Security (although I don't plan to file until I am 70). I am thinking retiring in Mexico will be cheaper than the USA. The only thing I don't understand is how taxes work in Mexico. I know the USA charges you taxes no matter where you live and regardless of where the money is earned. I once asked a Mexican Consulate about paying taxes in Mexico and he said as long as I didn't live in Mexico I didn't have to file in Mexico. I know I will have to pay taxes to the USA for life, how does it work for Mexico? Do I have to file two tax returns if I move to Mexico? I heard that there was some kind of treaty that prevented double taxation but I don't know where to go to find more information on the subject. Any help is appreciated.


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## RVGRINGO (May 16, 2007)

There is a tax treaty and you will not be taxed twice. You will only have to file in the country, or countries, where you work, earn, and are paid. So, if you retire in the USA, you will continue to have a tax requirement there. If you retire to live in Mexico, but do not work or earn money in Mexico, you will have not need to file in Mexico. If you do earn income in Mexico, you will have to file, but you will be protected against double taxation.
I suggest that you keep your US banking arrangements, and have your retirement, and/or SS, deposited there. You may transfer funds to a Mexican bank, if needed or desired, and use ATM machines for cash needs.


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## elderp (Aug 22, 2018)

Thank you, I have Charles Schwab which is good for debit card purchaes and a international Chase card. The one limitation I have is that the most I can withdraw in a day is $300. I am thinking of accumulating some money in a Mexican bank account to make payments such as rent easier. Any recommendations?


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## perropedorro (Mar 19, 2016)

elderp said:


> Thank you, I have Charles Schwab which is good for debit card purchaes and a international Chase card. The one limitation I have is that the most I can withdraw in a day is $300. I am thinking of accumulating some money in a Mexican bank account to make payments such as rent easier. Any recommendations?


It looks like you're on to a good plan, elderp, and have quite an advantage being born and registered in Mexico. Have you accumulated all the paperwork necessary-- birth certificate, INE, proof of residency (usually a utility bill) maybe even a local driver's licence? Any bank will want those. IMO Mexican banks are pretty much the same, so pick one that's convenient locally, with a branch that's close, secure, and well-organized; factors that can vary even among branches of the same bank. Where were you thinking of settling down? And...Welcome to the forum!:clap2:


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## RVGRINGO (May 16, 2007)

You can withdraw more than $500 USD equivalent, if you ask your bank to raise that default daily limit. We did that, ourselves, in order to get larger amounts of cash and avoid trips to the ATM, multiple transaction charges (even though our bank reimbursed the first 10 each month), and to make it easier to accumulate cash for occasional larger purchases, etc. For really large purchases, we arranged either a wire transfer or a few hours of no limit on our debit card to buy a car, etc. Never did use a Mexican bank in our 13 years living in Mexico. We did our banking online with our USA bank.


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## chicois8 (Aug 8, 2009)

Welcome to the board, I also have a Schwab Bank account with a debit card, I asked and received a $2000 USD withdrawal amount per day...What is nice with Schwab Bank is by using their debit card the ATM fees are reimbursed monthly.Also if you do get a Mexican bank account and have a balance over $10,000 USD you will have to fill out a FBAR report to IRS....


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## elderp (Aug 22, 2018)

Thanks, I don’t have an INE yet, I have heard that you can get them now at the consulate so I guess I need to make an appointment. I still live in California so I don’t have a Mexican drivers license or Mexican Utility bill, but not too worried about that. My family is traditionally from Aguascalientes so I am thinking of moving there.


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## Montegirl (Jan 20, 2021)

chicois8 said:


> Welcome to the board, I also have a Schwab Bank account with a debit card, I asked and received a $2000 USD withdrawal amount per day...What is nice with Schwab Bank is by using their debit card the ATM fees are reimbursed monthly.Also if you do get a Mexican bank account and have a balance over $10,000 USD you will have to fill out a FBAR report to IRS....


If you don’t mind me asking, What is a FBAR report? and do you still have to do that even if you are in Mexico as a citizen and it is your savings you are moving to Mexico? And also how would you then go about buying, say a 50,000.00 dollar house with money you have saved up over the years? How could you transfer this money?


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## TundraGreen (Jul 15, 2010)

Montegirl said:


> If you don’t mind me asking, What is a FBAR report? and do you still have to do that even if you are in Mexico as a citizen and it is your savings you are moving to Mexico? And also how would you then go about buying, say a 50,000.00 dollar house with money you have saved up over the years? How could you transfer this money?


If a US citizen has over $10,000 usd or its equivalent in a non-US bank, they are required to file a form listing the accounts and balances once a year before 30 June. It is for information purposes only, no taxes or fees are involved. The law was aimed at people with large off-shore bank accounts and it really should have a higher limit for those of us that live outside the US.


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## dvinton (Mar 8, 2019)

TundraGreen, thanks for sharing this information!

I reviewed the FBAR page on the IRS website, Report of Foreign Bank and Financial Accounts (FBAR) | Internal Revenue Service. It states that the report is due April 15 but can be extended (without request) to October 15. The FBAR report is not submitted with your Federal tax filing. See the webpage for details.


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## eastwind (Jun 18, 2016)

TundraGreen said:


> If a US citizen has over $10,000 usd or its equivalent in a non-US bank, they are required to file a form listing the accounts and balances once a year before 30 June. It is for information purposes only, no taxes or fees are involved. The law was aimed at people with large off-shore bank accounts and it really should have a higher limit for those of us that live outside the US.


To be a little more accurate, you are required to file a form if _at any time during the year _you have over $10,000 usd equivalent in _all _of your overseas accounts combined - not just over $10,000 in _a _non-US bank account. You need to know the sum of the value of your accounts for every day during the year, and if you go over on any one day then you owe them their FBAR form by April 15th/Oct 15th.

A US citizen would be obligated for life to file these FBAR reports, regardless of other citizenship they might obtain, unless and until they renounce their US citizenship. 

Similarly, your obligation to file US income taxes doesn't disappear just because you obtain Mexican citizenship and/or move to Mexico. The IRS has a whole set of complicated rules to determine who has to file, there are income thresholds for people with very low income that permit them to skip filing, and perhaps other reasons, but foreign residency and/or being a dual citizen don't enter into it.

The IRS has a web-interview to help you determine if you have to file, here: Do I Need to File a Tax Return? | Internal Revenue Service


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## TundraGreen (Jul 15, 2010)

eastwind said:


> To be a little more accurate, you are required to file a form if _at any time during the year _you have over $10,000 usd equivalent in _all _of your overseas accounts combined - not just over $10,000 in _a _non-US bank account. You need to know the sum of the value of your accounts for every day during the year, and if you go over on any one day then you owe them their FBAR form by April 15th/Oct 15th.
> ...


Thanks for the clarification. That is correct. I was not spelling out the details and had the deadline wrong.


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## MangoTango (Feb 8, 2020)

In my opinion - filing FBARs is kind of trivial (and I am not an accountant). I certainly wouldn't let the 'fear' of IRS/Treasury paperwork keep me from having foreign accounts.
We have 'several' foreign accounts. It takes me maybe a morning to complete the FBARS. I do everything for myself and then copy it over and file the exact same info for my wife.
I report 'everything', even a tiny little placeholder checking account with 5002 pesos.
I then take the FBAR information and create matching 8938 forms which I send along with our taxes (exact same math as the FBAR). 
I do that for 'everything' as well.
I guess they could contact me and ask that I not send along soo much information, but I haven't heard from them yet.
The first year is probably the toughest. After that you can pretty much start with the previous years forms. But from year to year they do change the formats.


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