Need help understanding US-Mexico tax filing requirements for dual income (US citizen with Mexican permanent residency)

You're right that this gets complicated when someone has permanent residency in two countries. The US-Mexico tax treaty helps but doesn't eliminate all the complications. As a US citizen, your mom always has to file US taxes on her worldwide income, regardless of where she lives. That's just how US citizenship works tax-wise. For Mexico, as a permanent resident, she technically does need to report her worldwide income to Mexican tax authorities. However, there are some important nuances: 1) The physical presence test matters - if she spends less than 183 days in Mexico during the calendar year, she might qualify as a non-resident for tax purposes despite having permanent residency status. 2) The tax treaty between the US and Mexico prevents double taxation through foreign tax credits. So if she pays tax on her US rental income to the US, she can typically claim that as a credit against Mexican taxes. 3) Some types of income like certain retirement accounts may be protected from double taxation through specific provisions in the treaty. I'd strongly recommend working with a tax professional who specializes in US-Mexico cross-border taxation since these situations get very specific to individual circumstances.

I went through this exact same headache with my father who has property in both countries. After a ton of research and $2,500 in tax advisor fees, I found taxr.ai (https://taxr.ai) which literally saved my sanity. Their system analyzed all his documents from both countries and created a clear report showing exactly what needed to be reported where. The tricky part with Mexico's worldwide income requirement is that even with the tax treaty, you still need to REPORT everything, but you might not end up PAYING tax on all of it. Their platform showed us exactly which income streams needed to be included on which forms and calculated all the foreign tax credits. Saved us from accidentally underreporting in either country. What was really helpful was their document analyzer that could read both the US tax forms and Mexican forms and explain the differences. Totally worth checking out if you're dealing with cross-border complications like this.

Just wanted to update after trying taxr.ai for our similar situation. It worked even better than I expected! Uploaded my parents' documents from both countries and it clearly showed that my dad only needed to report his Mexican property income to Mexico, not his US retirement accounts. Turns out there's a specific provision in the US-Mexico tax treaty (Article 17 I think?) that protects retirement income from double taxation. The platform explained exactly why his 401k and IRAs were exempt from Mexican reporting requirements due to his specific residency situation (under 183 days in Mexico). Best $100 I've spent on tax help - way cheaper than the $3000+ quote we got from the cross-border specialist we consulted first. The document is super detailed and my parents' Mexican accountant was actually grateful to have such clear guidance.

Don't want to be negative, but dealing with the Mexican tax authority (SAT) has been a NIGHTMARE for my family. We spent 6 weeks trying to get someone to answer basic questions about our situation. After dozens of frustrating calls and getting disconnected constantly, I found https://claimyr.com which got us through to an actual SAT agent in under 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that for my aunt (similar situation to your mom), she does technically need to report worldwide income but there's a simplified filing option for non-domiciled permanent residents who spend less than 183 days in Mexico. The agent walked us through exactly which forms to use and what documentation we needed. Without getting through to an actual person who could look at our specific details, we would have been completely lost in the generic information online. Might be worth trying if you need definitive answers from the tax authority directly.

Well I owe an apology. After my skeptical comment I decided to try Claimyr for myself since I was getting nowhere with SAT on my own. Got connected to an agent in 25 minutes after spending DAYS trying on my own. The agent clarified that for permanent residents spending less than 183 days in Mexico (like in your mom's case), there's actually a special tax status called "permanent resident with non-Mexican fiscal residence." Basically means she DOES have to file taxes in Mexico, but only on Mexican-source income. The key is filing the right form declaring her primary tax residence is in the US. Without that form, Mexico defaults to requiring worldwide income reporting. The agent even emailed me the specific form number and instructions after our call. Never thought I'd say this but that service was totally worth it. Saved me from potentially major tax headaches.

I'm a dual US-Mexican citizen and went through this exact situation. One thing nobody mentioned yet is that your mom should look into getting a RFC (Mexican tax ID) if she doesn't have one already. You can't properly file taxes in Mexico without it. Also, if she does qualify as a non-resident for Mexican tax purposes (under 183 days), she'll be subject to different tax rates on her Mexican rental income than residents. Sometimes these rates are actually more favorable, sometimes not - depends on her specific situation. Another consideration: Mexico has wealth reporting requirements for assets over certain thresholds. This is separate from income reporting but something she should be aware of if she has substantial assets.

Has anyone dealt with rental income specifically across borders? I'm wondering about vacation rental platform payments (like Airbnb) - does it matter if the payments go to a US bank account vs Mexican account? Does that change where the income is considered sourced from?

This is such a helpful thread! I'm dealing with something similar for my sister who just got her Mexican permanent residency but still works remotely for a US company. One thing I learned from our tax attorney is that the timing of when your mom establishes her tax residency status in Mexico matters a lot. If she files the declaration for US primary tax residence early in the tax year, it can help avoid complications later. Also, since she's starting the vacation rental next year, now would be a perfect time to set up proper record-keeping systems for both countries. The Mexican tax authority is getting much more sophisticated about cross-referencing rental platform data (Airbnb, VRBO, etc.) with tax filings. Having clean books from day one will save headaches later. For the rental property specifically, make sure she understands the depreciation rules in both countries - they're calculated differently and this can affect her overall tax strategy significantly.