US taxes when you live in Mexico

Moving to Mexico doesn’t end your US tax obligations. US citizens and green card holders file a federal return every year wherever they live, and living abroad adds forms most people have never seen.

What changes when you live abroad

• You still file a US return on your worldwide income.
• Foreign accounts must be reported. If your non-US accounts total more than $10,000 at any point in the year, you file a foreign account report (FBAR). Larger balances trigger a second form with your tax return.
• There are ways to avoid being taxed twice. Earned income from work may qualify for the foreign earned income exclusion, and tax paid to Mexico can usually be credited against US tax. Pensions, Social Security and investment income follow different rules from wages.
• Your state may still want a return. Some states keep treating you as a resident until you clearly cut ties.

Mexican tax residency

If your main home is in Mexico, Mexico generally treats you as a tax resident, which can mean reporting your worldwide income there too. The US and Mexico have a tax treaty that decides which country taxes what. This is separate from your immigration status: a resident card doesn’t by itself make you a tax resident, and not having one doesn’t keep you from being one.

When to bring one in

Before the end of the year you move, so you can plan the move date, account transfers and any property sale. At the latest, before your first US filing deadline abroad.

What to ask a preparer

• How many clients do you have who live in Mexico?
• Do you handle the Mexican side, or work with a Mexican accountant who does?
• Is the fee fixed, and does it include foreign account reporting and a state return?
• Are you an enrolled agent or CPA, and will you represent me if the IRS writes to me?

Common questions

Do I still pay US taxes if I live in Mexico?

US citizens and green card holders must file a US federal return every year wherever they live. Exclusions and credits often reduce or remove double taxation, but the filing requirement stays.

Do I have to report a Mexican bank account to the US?

Yes, if your non-US accounts together exceed $10,000 at any point in the year. That is the foreign account report known as the FBAR, and larger balances require a second form with your tax return.