US-Mexico tax obligations

If you’re a Mexican citizen living in the US or US citizen with assets in Mexico, you have cross-border tax obligations with two systems: US IRS and Mexico tax authority. This guide covers main points.

Official IRS tax treaty status — verified data

Official source: IRS — US Income Tax Treaties A-Z

Verified on: 2026-05-25

✅ Mexico HAS a tax treaty with the US confirmed on the official IRS list.

Treaty documents: https://www.irs.gov/businesses/international-businesses/mexico-tax-treaty-documents

US-Mexico Income Tax Convention (1992, amended 2002)

Latin American countries with US tax treaty

Only 3 Latin American countries have a tax treaty with the US (IRS data 2026):

  • Chile (signed 2010; entered into force December 19, 2023 — US Treasury; effective for withholding at source from February 1, 2024)
  • Mexico (signed 1992, amended 2002)
  • Venezuela (signed 1999)

Your Mexico tax ID

In Mexico, the tax ID is called RFC (Federal Taxpayer Registry). If you worked or had income in Mexico, you should have one.

Your US tax ID

  • If you have SSN: use it
  • If you don’t have SSN: you need ITIN from IRS — see ITIN complete guide
  • ITIN allows fulfilling US tax obligations without work authorization

✅ US-Mexico tax treaty

The US and Mexico signed a tax treaty in 1992 reducing double taxation and withholding on certain income types.

Treaty benefits:

  • Reduced withholding on dividends, interest and royalties at the rates set in the treaty’s articles (see the IRS tax treaty tables) instead of the default 30%
  • Tax credit available for taxes paid to receiving country
  • Pensions: generally only taxed in country of residence
  • Wages: non-resident employees with limited presence exempt in some cases

How to apply treaty benefits:

  • Form W-8BEN for non-residents (bank/employer US)
  • Form 8833 Treaty-Based Return Position Disclosure on your federal return
  • Form 1116 Foreign Tax Credit for cross-credits

FBAR (FinCEN 114) — accounts in Mexico

If you’re a “US Person” (US citizen, permanent resident, or tax resident via Substantial Presence) and have bank accounts in Mexico whose combined balances exceeded $10,000 USD at any point in the year, you MUST file FBAR (FinCEN Form 114) annually.

  • Deadline: April 15 (automatic extension to October 15)
  • Cost: FREE (electronic via bsaefiling.fincen.gov)
  • Penalties: $10,000-$100,000+ for non-filing

See: FBAR complete guide

FATCA (Form 8938) — assets in Mexico

If your Mexico financial assets (bank accounts, stocks, funds) exceed FATCA thresholds, you must file Form 8938 with your federal IRS return.

Thresholds (US Persons living in the US) — each has TWO prongs, and hitting either one triggers the form (IRS, Summary of FATCA reporting for U.S. taxpayers):

  • Single / married filing separately: more than $50,000 on the last day of the tax year, OR more than $75,000 at any time during the year
  • Married filing jointly: more than $100,000 on the last day of the tax year, OR more than $150,000 at any time during the year
  • If you live abroad, the thresholds are much higher: $200,000 / $300,000 single, $400,000 / $600,000 married filing jointly

The any-time-during-the-year prong is the one people miss: a balance that peaked at $80,000 in July and sat at $40,000 on December 31 still requires Form 8938.

See: FATCA complete guide

US + Mexico dual nationality

Mexico allows dual nationality with US. If you naturalize as US citizen, you keep Mexican nationality (verify Mexico’s current rules).

Dual nationality tax implications:

  • You still owe US tax on worldwide income (the US taxes its citizens on worldwide income)
  • You may also owe tax in Mexico on income generated in Mexico
  • The US foreign tax credit (Form 1116) can reduce double taxation on income that Mexico also taxes

Currency and conversion

Mexico: MXN (Peso mexicano). When reporting Mexican income to the IRS, convert it to US dollars, generally at the exchange rate prevailing when you receive, pay or accrue the item; the IRS has no official exchange rate and generally accepts any posted exchange rate used consistently.

If you have a business (Self-Employment / Independent Contractor)

If you live in US with ITIN and have freelance/business income:

  • Schedule C (business profit/loss)
  • Schedule SE (Self-Employment Tax 15.3%)
  • 1099-NEC from your US clients
  • FEIE does NOT apply (you’re IN the US, not abroad)

See: Filing taxes with ITIN

Official source: IRS International Taxpayers · FinCEN FBAR

Cross-border tax obligations are complex — consult a CPA or tax attorney with international experience.

Last verified: 2026-09-24.

General procedural information for educational purposes. Not legal, tax, or immigration advice. Laws and fees change — verify with the issuing agency before taking action. For case-specific guidance, consult a licensed immigration attorney or other appropriate professional.