Living the GOOD LIFE for the REST OF YOUR LIFE!
MONEY MATTERS
IN MEXICO
BANKING IN MEXICO: You have the option of opening an account in pesos, the Mexican money or currency, or in dollars. You must be a citizen of the United States or Canada for dollar-denominated accounts.
It is easy for a foreigner to open a bank account in Mexico. All you need are:
The Mexican currency checking account allows you to transfer funds to other accounts in Mexico, invest in the Mexican Stock Market, and to transact business in the country.
Both peso and dollar accounts can be held as checking and money market accounts. To earn interest on a certificate of deposit, the account must be in pesos.
Taxes on interest from Mexican bank accounts must be paid when filing your U.S. tax return.
TRAVEL TO MEXICO WITH
MEXICAN CREDIT CARDS:
The Mexican bank holding your account can issue you a credit card. In addition to the requirements for opening an account, you must also show proof of income before the credit card will be issued.
Some banks need at least 6 months of banking activity and a balance of around $4,000 before they will issue you a credit card. Having credit references will help.
USING YOUR “OUT-OF-COUNTRY”
CREDIT CARD
Credit card usage is becoming more widely recognized in Mexico; however, ATM cards are your most economical way of accessing funds.
Validating your credit card can be a problem for many small businesses which is why they will not accept them. Others will charge you the percentage that the credit card company charges them in order to use the card. Ask the business if they will give you a discount for cash, and many will.
Always sign that you paid “in pesos” on the bottom of the summary line and keep your copy to check against your statement.
The mainstream grocery stores take Master Card and Visa credit cards usually without much difficulty. You will need to pay for gasoline (patrol) with cash.
SOCIAL SECURITY:
Most Americans living in a different country receive their Social Security funds as a direct deposit into an American bank. The ATM card is then used to remove the funds. The U.S. Embassy is working with Mexican banks to make direct deposit into Mexican banks more widely available.
If you choose to become a citizen of Mexico, and carry your U.S. citizenship as well (known as dual citizenship) you will still be eligible to receive your Social Security benefits. Just be sure to alert your local Social Security office of any change of address.
The link below will lead you to a Social Security site that deals with paying benefits when the recipient is out of the country. It contains valuable information.
PAYING TAXES:
All citizens of the U.S. who are receiving income must file with the IRS, regardless of your country of residence or where that income was earned.
Living in Mexico longer than 183 days per year subjects you to Mexican taxation. Credits can be taken for any payment of taxes to the Mexican government and up to $80,000 of foreign income can qualify for exclusion from taxation. As a result of a treaty between the United States and Mexico, you will not be double-taxed on your income.
Although you live in Mexico and receive Social Security benefits from the U.S., you will still be responsible for the U.S. taxes on those benefits.
If you are self-employed or earn any income in Mexico, you will be paying taxes to the Mexican government. The word “hacienda”, while most familiarly translated as “house” also means the Mexican IRS.
A Mexican accountant who understands the U.S., Canadian or British laws will be most helpful in keeping you in the good graces of your country of origin.