tax implications when working in Mexico/live in U.S.

[jmrubio]

What is the name of your state? Texas


I live with my husband in Texas. He works for a company that has operations in Mexico, and currently he is working in a plant in Mexico. His company pays The appropriate Mexican tax that is on his paycheck. So currently he pays no U.S. taxes. Will we owe any type of federal income taxes this year since we reside in the United States? (I have not worked since February-and of course will expect this income to be taxable).

 

[Snipes5]

Yes, you will file US taxes as usual, but you will need to do a foreign tax credit for taxes paid to Mexico on those wages. When tax time comes, find an Enrolled Agent (www.naea.org) who has experience with Mexico/US tax issues. There are treaties to ensure that you aren't taxed in both countries on the same income.

Snipes

 

[jmrubio]

further questions about foreign taxes

Currently my husband's company is in effect paying all of the Mexico tax. On his paystub the amount is listed as an reimbursement in the earnings column. So on his behalf they have in effect paid the Mexico tax for him and his pay is then not really taxed at all and we are receiving his full salary. My question then is this: Since WE are not paying the Mexican tax, will his full salary be subject to U. S. taxes? I am trying to budget and need to know if we are going to have to pay in thousands of dollars come April. Thanks.

 

[Snipes5]

If you did a foreign tax credit, his full salary would be subject to US taxes anyway.

If the company pays the taxes, you will not have a foreign tax credit available to you.

You MUST see a competent tax practitioner.

Further, if no US taxes have been withheld, you should have been sending in estimated tax payments.

Snipes