Think you can’t afford to move to Mexico? Are you searching for a financial solution to own a home at Rivera Cuale? Let us introduce you to a little known tax provision which may help to make your dreams of living and working in Mexico come true.
Most citizens of the United States know that we are taxed on our worldwide earnings. Even if an American citizen no longer resides, or works, in the United States, we are required to report foreign earnings to the Internal Revenue Service (IRS).
If you are an American and unaware of the worldwide taxation law, don’t panic. The government has allowed for a certain amount of relief through the “Foreign Earned Income Exclusion” (FEIE), also known as IRC Section 911. This provision allows U.S. citizens, living abroad, to exclude up to $91,400, per year, of foreign earned income from their taxes ($182,800 for a married couple).
Let’s be clear. This is not simply a deduction. It is an outright exclusion of income. There are no taxes due, up to the maximum stated above.
To qualify for the foreign earned income exclusion, you must:
- Reside abroad for at least 330 days per year.
- Earn income offshore through a small business, U.S. or Foreign corporation, even if you are the owner of that corporation.
- File a U.S. income tax return for each year you live abroad.
The FEIE is slightly limiting. For example:
- The exemption applies only to earned income, not to investment income such as rents, royalties, interest, dividends, etc. For some, this may serve as a benefit by lowering the tax bracket on which you pay taxes.
- The exemption does not apply to capital gains, or estate taxes.
We have provided you with a very simplified explanation of a complicated IRS provision. For more details about the FEIE, consult a qualified professional. Above all, please, review the original language of this provision, so that you can see for yourself how the IRS addresses this sensitive issue. Click here for the IRS website.
Finally, FEIE does not waive your tax obligations to your host country.
Now that we have shown you how easy it can be to afford a slice of paradise at Rivera Cuale, do not hesitate to contact us for further information and monthly promotions.
Email: info@riveracuale.com
Phone: (888) 226-0563 (toll free from USA/Canada)