Can I Stay in Mexico and Work in the USA?

Thanks to COVID and the recent technological advancements the world has seen, a lot of companies are allowing their employees to become fully virtual. This gives the power to employees to consider living farther away from their companies and to really explore the world as we were always meant to. Having this flexibility and freedom is a great advantage that many are starting to see and utilize. For citizens of the United States, an obvious place to move is Mexico. With a vibrant culture, pristine beaches, archaeological history, and only a flight away from major American cities, it gives people and their families that perfect space away from American for a bit while still being nearby in case they have to fly home. 

The American and Mexican governments have made it relatively easy for Americans to apply for Mexican visas and live in Mexico as temporary residents on work visas. For freelancers, this is also an opportunity to live abroad while still maintaining your work contracts. There are benefits to keeping your American job and contracts and different nuances you will have to learn—like visa types and taxes—but it is worth it in the end. And when you are ready to learn more and apply for visa, visit Natvisa.com to assist you!

Why You May Want to Keep Your American Job

The American dollar can go very far in Mexico. You can have a fantastic moderately priced dinner in Mexico for less than $10. Keeping your American income means you can live a life that is a little bit fancier than you may have had in the States. It also allows you to transition back to America if you decide that living in Mexico doesn’t fit with your goals or career path.

What Type of Visa Would You Need

As a tourist, you don’t need a visa to stay in Mexico for six months. If all you ever want to be is a tourist in Mexico, that means every six months you have to leave and then you can come back. However, that lifestyle is probably unsustainable and you may have to get a temporary resident visa in order to work and live in Mexico. You can also apply for a permanent resident visa either first or after trying out the temporary resident visa and confirming with yourself that this is the type of lifestyle you want to live.

In April 2021, a four year work permit became available for citizens of the United States to apply for. This permit will allow an American to work in Mexico and not have to keep reapplying for a work permit every year. This also allows those with temporary resident visas to renew their visas in Mexico.

Still Have to Pay Your Taxes

No matter where you live in the world, if you are a citizen of the United States but living abroad, you will still have to pay your taxes to the IRS every year. In addition to the annual income tax filing you must do, you may also have to file an information return (or a Foreign Bank Account Reporting) if you have any assets in a foreign bank. Since the United States is one of two countries that requires expats to still file income taxes, there are special provisions for those living in Mexico that are meant to help limit paying double the taxes to the United States and to the Mexico government. You are able to decrease your taxable income with a Foreign Earned Income Exclusion for the first $107,600 (for 2020’s filings) due to your labor being in a different country. There are also foreign tax credits you can apply on your income tax filing that may lower your overall bill based on what you have paid to the government of the country you are working from. There is also a foreign housing exclusion that allows you to write off certain household expenses that come from living abroad. Depending on how much you are making, and what types of exclusions and write offs you qualify for, you may end up not having to pay the United States and the IRS any taxes in a given year.

Mexico taxes income at different precents depending on how many pesos you make in a year. The only income tax Mexico has is based on Mexican-earned income, meaning if you solely work for a company in the United States and are only a temporary Mexican resident and your labor goes directly back to the US, you wouldn’t be charged Mexican income taxes. You will have to pay local income taxes, which range from one to three percent depending on what Mexican state you are living in. If you have a permanent resident visa, you will be charged the expat income Texas by the Mexican government and have to pay the local income taxes as well.

Living in Mexico

There are some tricky nuances to being a foreigner living in Mexico that may take some getting used to. For example, there are predatory landlords that will try to take advantage of foreigners who don’t speak Spanish by charging you a higher rent than they would someone else. If you don’t know Spanish yourself, bringing a friend may help mitigate those issues. You will also more than likely need to have a guarantor that is Mexican. This ensures to the landlord that if something happens and you stop paying the rent, there is someone they can charge the lease to.

You will learn quickly though that living in Mexico means more financial freedom and a new appreciate of a new culture. You will be surprised at how fast you pick up Spanish. Mexican people are known for their hospitality, so you will make friends in no time.

Mexico is waiting to welcome you to your new home. Learn more on how to apply for visas at Natvisa.com.