Job Discussion Forums

[deeb]

Hello wise forum participants,

I realize that most of the long time participants here are not from the US, save Melee, but I'm filing US taxes for the first time since arriving here (in July). My sister, who always does my taxes, has advised me that she needs to know how much I pay in Mexican taxes and my income.

I understood that my income is taxed on every paycheck under something called ISR. Which, by the way, I found translated on web sites as "Capital Gains Tax". That freaked my sister out a little. Is this my only income tax? Is this "normal"? (if we can use that word in Mexico )

Is there something that I'm missing here?

Any advice is welcome! Thanks

[MikeySaid]

Unless you're making ridiculous money down there... you probably have nothing to worry about.

http://www.escapeartist.com/efam5/expat_tax_2.html

Read the info posted above to get an idea of what's going on.

Honestly, I didn't even think about my Mexican income as taxable in the US and as a result I didn't include it because I couldn't find anywhere to put it. I don't think that will cause me any trouble with Uncle Sam but who knows.

[deeb]

hmm, well she wasn't so keen on him...

"First, you HAVE TO report your income. Once you do that, THEN you can get an exclusion from paying taxes on up to a certain amount, which may have been $74K in the past, but is now around $89K.....You can't qualify to get ANY of your foreign income excluded from being taxed until you have lived in the country for 330 days (over 12 consecutive months)."

(don't mind the caps, she's a little type A)

Do you know anything about the ISR?

[MikeySaid]

Hmmm... nope.

Now let's hope an American will post the truth.

[GueroPaz]

Of course the sister is correct, in theory. American citizens are required to report all of their gross income, worldwide, and you may elect the foreign earned income exclusion, which would mean you owe no tax unless you grossed more than about 85,000 US dollars in salary.

I doubt that salaries in Mexico would be considered capital gain income in the US system. I would cite my qualifications in this matter, but I might not be believed (since I am a liberal and a conservative, I have six kids and am gay, and my son lived in a cave in Guanajuato after he was a condom salesman, etc.), so let us pretend I was a longshoreman in the Bronx.

[ontoit]

It's foreign earned income, nothing more!

You also get an 85,700 dollar exemption for 2007.

You fill out an 2555 ez, then write your "foreign earned income" on line 21 of your 1040. (Note: write "2555-EZ" in the blank space)

Got it?

[deeb]

Thanks for the tips!