IF YOU OWN RENTAL PROPERTY IN ANYWHERE IN MEXICO YOU ARE REQUIRED TO PAY THESE MEXICAN TAXES

Mexico Income Tax

Mexico Value Added Taxes – IVA (16%)   if the unit is furnished*
*IVA is paid by tenant but collected and declared by the owner.

Many nonresidents of Mexico have never paid any taxes on their rental income from properties owned in Mexico.  This is a violation of Mexican tax law.  The Mexico tax code clearly states that these Mexican taxes must be paid on rental income from apartments, houses, and commercial property. Failure to do so can result (and has resulted ) in substantial penalties and legal problems with the Mexican tax authorities.

It is now easy for you to pay these taxes and avoid problems if even if you do not have a Mexican tax identification number.   The Settlement Company® has developed a simple and easy procedure  which will allow you to be tax compliant on your rental income. You do not have to suffer the consequences of failing to pay. Email or phone us now to learn more and to get started.

The Good News:  The IVA you pay in Mexico is deductible on your US tax return and the income taxes you pay in Mexico can offset your US  taxes on the same income dollar for dollar.  You will not be double taxed.

Visit this website for more information and to learn  the rules at: www.RentalTaxMexico.com

Email us with questions at ddnelson@gmail.com

How Nonresidents can Obtain an IRS ITIN from Abroad

If you are a nonresident who needs to file a US nonresident tax return or you have a spouse who is a nonresident and wish to make the election to file a joint return with them (it can often reduce your US income taxes) you need to get an ITIN (Individual Taxpayer Identification Number) because they are not eligible to get a social security number. You must have this number to file a tax return, and many banks and others require it before you an open a US bank or financial account.

Effective January 1, 2013, new ITIN procedures took affect for the Individual Taxpayer Identification Number (ITIN) application process. Some of the information below, including the documentation requirements for individuals seeking an ITIN, has been superseded by these changes. Taxpayers and their representatives should review these changes, which are further explained in these Frequently Asked Questions, before requesting an ITIN.

Alien taxpayers who need an Individual Taxpayer Identification Number (ITIN) may be able to secure one from outside the United States.

The IRS has permanent staff available that is able to help process Forms W-7, IRS Application Number and Instructions (PDF) at the following U.S. embassies overseas: Beijing, Frankfurt, London, and Paris. The addresses and phone numbers of these overseas offices may be found a tContact My Local Office Internationally. In addition, there are public accounting firms overseas in certain countries which are Authorized Acceptance Agents for ITIN numbers. You will find their names and addresses at the Acceptance Agent Program page.

US Embassy Beijing, China - IRS has
agents in almost every US embassy.

The IRS also accepts a Form W-7 by mail accompanied by ORIGINAL documents or certified copy of the document from the issuing agency establishes the identity and foreign status of the ITIN applicant.

The Instructions for Form W-7 list 13 documents that can be used to prove foreign status and identity. A foreign passport is the only one that can stand alone (i.e., establishes both foreign status and identity). If a passport is submitted, there is no need to submit any other documents. If a passport is not submitted, a combination of at least two other documents, with at least one containing a photograph, must be submitted with the ITIN application. The IRS will accept copies of original documents, if the copies have been properly certified by:

1. the government agency (foreign or domestic) which issued the documents, or
2. employees of the U.S. State Department located in U.S. embassies and consulates abroad.

More Information:

• Taxpayer Identification Numbers (TIN)

If you need help filing your US nonresident tax return or filing an expat tax return with your nonresident spouse, we can help. We have been assisting US nonresident clients for over 30 years. Email us at ddnelson@gmail.com.  Skye: dondnelson or wisit our website at www.TaxMeLess.com

Thanks. KAUFFMAN NELSON LLP CERTIFIED PUBLIC ACCOUNTANTS, Don D. Nelson, Attorney CPA

US Nonresidents Must Pay Tax on Their US Income

If you are a US nonresident (this is someone who does not have a green card or is not a US Citizen) and come to the US to work for a few months, you are obligated file a US tax return on your US source earnings (whether paid by a US company or a foreign company).  Your earnings might be exempt from tax under US tax treaty with your home country, but you still need to file the return to claim that  treaty exemption. Depending on the social security agreements in effect, it might even be subject to US self employment tax (social security) if you are an independent contract.

If you as a nonresident are going to file a US tax return, you need to secure a taxpayer identification number also. That process has recently become somewhat cumbersome and difficult.


A nonresident working in the US may under the laws of the state in which he or she works also be required to file a state tax return.

Failure to file a tax return will result in the statute of limitations for later requiring a return or tax to never run out.  Therefore, when in doubt you should as a nonresident always file a return.

The good news is that US nonresidents are not subject to tax on their interest income from banks, savings and loans and US treasury bills or on their capital gains from the sale of US stocks (so long as theses are investments and not connected with their US business).

Learn more about the US taxation of nonresidents at www.TaxMeLess.com