Tax Equalization hypo tax Mexico

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jesfierro Member

Member since 24 August 2018

jesfierroMember24 August 2018 16:14:55

I am a US Citizen working in Manufacturing Company in Mexico Border region. I have been working here for over 10 years now. My payroll comes from US and have all normal US and State taxes deducted until last year聽 have to be on Tax Equalization/ Hypo Tax . My employer hired company appointed tax advisers, this would be first time. My questions my situation is different because technically I'm not a expat. I live in the U.S.A . side of border and commute to work across to Mexico daily and head back Home stateside every afternoon. Somewhat common in Maquiladora / Manufacturing sites in Mexican Border cities. I have Mexican Worker visa INM permission .聽 The tax advisers online questioner keep on asking how long I lived In Mexico, Who is currently residing at the house in the United States? What is/was your host country living arrangement? These question are not for cross border commuter. I have asked tax advisers that I don't live in Mexico and are only at work 5 days a week minus U.S. holidays plus my聽 vacation days. Tax advisers say that doesn't matter that for Mexico I reside in Mexico full time. I was hoping for some guidance if anyone has been in this same situation

Chilangolite Serial expat

Member since 14 September 2017

ChilangoliteSerial expat24 August 2018 17:07:17

218

When I was working in the Maquiladoras I would just do my taxes as usual and include the taxes paid in Mexico as part of my obligation. You cannot use the foreign tax exemption unless you are out of the country for at least 330 days a year.

mexicogc Serial expat

Member since 22 May 2016

mexicogcSerial expat24 August 2018 18:49:59

718

Chilangolite wrote:
When I was working in the Maquiladoras I would just do my taxes as usual and include the taxes paid in Mexico as part of my obligation. You cannot use the foreign tax exemption unless you are out of the country for at least 330 days a year.

Does this means that your revenues for the IRS would have been the total of US and Mexican revenues. The Mexican revenues if paid in pesos would be converted to US dollars.

Adios y buen dia a todos. GyC

jamesr3939 Serial expat

Member since 22 February 2017

jamesr3939Serial expat24 August 2018 21:08:45

226

There is an IRS publication about this.聽 As I recall the income is taxed where you earn it.聽 If you search the IRS site you might find the cross border agreement.

Chilangolite Serial expat

Member since 14 September 2017

ChilangoliteSerial expat27 August 2018 00:10:26

218

mexicogc wrote:
Chilangolite wrote:
When I was working in the Maquiladoras I would just do my taxes as usual and include the taxes paid in Mexico as part of my obligation. You cannot use the foreign tax exemption unless you are out of the country for at least 330 days a year.

Does this means that your revenues for the IRS would have been the total of US and Mexican revenues. The Mexican revenues if paid in pesos would be converted to US dollars.

Adios y buen dia a todos. GyC

Yes,Since this is reported to the IRS as income and I paid taxes on it in Mexico then the taxes I paid in Mexico is deducted from the taxes I owed in the US. it falls under foreign earned income.
However your situation might be different than mine so my advice would be to talk to an expert like a tax consultant. HR block could help you in that capacity.

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