Do I lower my US income tax liabilities if I retire or work in Mexico?

My best advice would be to talk to your tax professional in advance to see if you qualify to lower your tax liabilities if you live or work in Mexico.
 
In general, I know there’s a move right now in congress to eliminate the need for Americans to pay taxes on worldwide income. I know they’re making a change on FATCA and the FBAR filings.  These things are in flux now, so I couldn’t give a straight and honest answer because it’s changing daily.
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My best advice would be to talk to your tax professional in advance to see if you qualify to lower your tax liabilities if you live or work in Mexico.
 
In general, I know there’s a move right now in congress to eliminate the need for Americans to pay taxes on worldwide income. I know they’re making a change on FATCA and the FBAR filings.  These things are in flux now, so I couldn’t give a straight and honest answer because it’s changing daily.
 
However, via the Foreign Earned Income Exclusion, my understanding is that, if you live outside of the US for 330 days, I believe you can exclude somewhere in the area of US $99,000 of earned income that was generated outside of the US.  But, once again, that doesn’t mean that you’re not paying your local taxes and applying this probably to where you are residing abroad at that time.   

 

US Citizens must file returns on their worldwide income. US Citizens do get foreign tax credits for taxes paid in their resident country against US tax on that income. For income earned through work abroad, US Citizens get a $100,800 exclusion if they qualify.

 

(Expat in Paradise Belize sweatshirt designed by Jet Metier, pictured.)

US Citizens must file returns on their worldwide income. US Citizens do get foreign tax credits for taxes paid in their resident country against US tax on that income. For income earned through work abroad, US Citizens get a $100,800 exclusion if they qualify.

 

(Expat in Paradise Belize sweatshirt designed by Jet Metier, pictured.)