Thursday, August 16, 2018

AIRBNB TAXES IS NOW WITHHOLDING LODGING TAX IN SOME PARTS OF MEXICO - The Hacienda will collect income taxes and IVA next.

On August 6th the Gringo Gazette published an article by Doris Open regarding the impact of the Airbnb rentals in Mexico.    In Baja California Sur alone there are 2,400 owners registered with Airbnb!
    Now  owners renting properties through Airbnb in some parts of Mexico will be paying the 3% lodging tax to the municipal authorities.  This will be taken out of rental income BEFORE it goes to the owner!!

   Rental owners of property in Mexico also owe Federal Income Tax Mexico and IVA Tax. Failure to pay these taxes on rental income can result in severe penalties.

    One to these two taxes is the Impuesto Sobre la Renta (ISR) is the owner’s tax on income.    The other, the Impuesto al Valor Agregado (IVA) tax is a sales tax which must be paid by the tenant but collected by the owner and delivered to the Mexican authorities.

    These taxes must be declared MONTHLY and paid each month to SAT, the federal tax authority.
    
Many tax authorities and accountants do not believe the 3% hospitality tax is an obligation of the owner of one or two units who rents only occasionally.  This issue has yet to be determined with any certainty.

    No tax expert disputes the legitimacy of the two federal Federal taxes.    With all this publicity however, federal tax authorities will be looking more closely at the Airbnb websites and will be visiting those owners to check their compliance with federal tax laws.  They have already done so in some towns located on the Mexican mainland.

    It is strongly suggested you get legal  with the Mexican tax authorities BEFORE they knock on your door!

If you have questions on IVA and Income Tax owed on your Mexican rental property either in Mexico or in the USA (if you are a US taxpayer), contact us at ddnelson@gmail.com.  Visits our website at www.taxmeless.com.  We have been assisting US taxpayers living in Mexico with their US taxes for over 20 years.

To learn more about the details of these Mexican rental taxes  and Mexico real estate rental tax law visit www.rentaltaxmexico.com 
_____________________________
The Settlement Company® has developed three options for meeting your obligations on income from rental properties located in Mexico.   For additional information; info@settlement-co.com

I

Friday, May 25, 2018

Excellent Mexican Tax and Accounting Professionals in Los Cabos




L and S Accounting and Tax Consulting is a full service accounting, tax and auditing family
firm based in Cabo San Lucas, Mexico with decades of US and Mexico experience in
accounting and taxation.The partners are Sarahi Niederhaus a licensed Contadora Publica
(Mexico CPA) with ten years experience and Lance Niederhaus an inactive California
CPA with Big Six firm, cross the border, and multinational experience for over 25 years.


The Firm provides  the following Mexico services at competitive rates for individuals,
partnerships, corporations, etc:


- Accounting Services
- Fiscal Compliance Filing
- Annual tax  Declarations
- Bank Account Opening and Management
- Operational Performance Reporting
- Administrative Services
- Consulting Services (including mini consultations)
- Projections, Estimates and other Business Analysis
- Coordination with local attorneys, notaries, etc.

Unlike many Mexico accounting firms L & S understands US taxation and accounting
and can coordinate with the US rules very efficiently.


Contact them for further information and with questions at:


Mex Cell (L): +52 (624) 147-5149
Mex Cell (S): +52 (624) 128-3700
US Google Voice: +1 (949) 436-7737
Skype: cabolance

Our US CPA firm has worked closing with L & S with our clients in Mexico and the clients have benefited tremendously. If you have US tax question on expatriate, international or nonresident taxes please email us at: ddnelson@gmail.com. Visit our website awww.taxmeless.com

Monday, April 30, 2018

What Are the Closing Costs on Sale of Real Estate in Mexico

Purchasing real estate in Mexico is a little more costly than the USA.  The various closing costs and fees  are high. The Settlement Company has a calulator on their website which will help you calculate a projection of your estimated closing costs.  See how much they will be HERE

Buyer and selling real property be it your home or a rental or business property does have significant US tax income tax and reporting consequences as well as Mexican tax ramifications. If you wish to learn mroe please contact Don D. Nelson, International Tax Attorney at ddnelson@gmail.com. His US number is 949-480-1235 and his Mexico number is 52-624-131-5228.  Planning for costs, taxes and legal matters ahead of your purchase or sale can save you money.

Friday, April 13, 2018

Estate Planning for US Expatriates Living In Mexico for US assets

Most do not realize that the US legal system does not work well when it comes to transferring assets to deceased owners.  Probate in most states takes one to two years and costs a lot of money in attorneys fees. It also is cumbersome and all information about your estate is public.

If you have assets in the US you should set up a Living Trust which will pass your assets without probate and keep your bequests and value of your estate absolutely confidential.   Without a living trust most states require probate if your US assets values exceed certain minimal amounts.  Living trusts do not required court supervision and keep attorneys fees at a minimum.

Also you cannot count on your Mexican will since it will require probate in the US and may cause other problems and even not be recognized by some states.

A living trust is a document that during your lifetime gives you total control of your US based assets. Upon your death a successor trustee takes over and distributes the assets in any manner you have stated in the Trust. The successor trustee can be a bank or family members or other individuals whether US residents or foreign citizens.

Though you are living in Mexico, if you do have valuable US assets, setting up a US Living Trust is the only solution for fast and inexpensive transfer upon your death. Living trusts used to be used to reduce estate taxes, but now that US estate taxes only apply if the value of each individuals estate exceeds 11 million dollars that is not a consideration.

Want to learn more about living trusts, and US estate planning including US wills, US powers of attorney (much different than those used in Mexico) and health care directives email Don D . Nelson, Attorney at Law at ddnelson@gmail.com and visit our website at www.taxmeless.com 


Monday, March 26, 2018

FACTURAS AND US TAXES- FACTURAS ARE NOT REQUIRED TO DEDUCT AN EXPENSE ON YOUR US INCOME TAX RETURN

Though in Mexico you need a factura in order to get a deduction for most business expenses, that is not the rule for your US tax return.  If you get a valid  provable receipt from the vendor or service provider, you can still deduct the expense on your US tax return thought not allowed on your Mexico return.  The IRS does not require facturas though the SAT does.

Want more information on US or Mexican taxes, email us at ddnelson@gmail.com. We work closely with several Mexican accountants who can help you achieve the best results here in Mexico. Often by coordinating the Mexican  tax rules with the US rules you can achieve the best result.

Sunday, March 11, 2018

Want to be Paul Manaforts Cell Mate - Still Time to Save Yourself

By Don D Nelson, International Tax Attorney

One of the criminal charges against Paul Manafort involves his failure to report foreign bank
and financial accounts he controlled.  All such foreign accounts must be reported to the US
Treasury each year onform 114 (FBAR) if the combined highest balances in those accounts
are $10,000US or more. Paul Manafort appears to have never filed that form and answered
the yes or no question on his tax return asking if he had foreign bank accounts “no.”

If you are like Manafort you too can spend five years in jail and pay a criminal fine of $500,000.
There are also civil fines that can go up to ½ of the balances you maintained in your foreign
bank and financial accounts.

There are several programs that will allow you to catch up with past unfiled foreign assets
reporting forms due the IRS which will reduce or eliminate your financial and criminal
exposure for failing to file the Form 114.  However, like Manafort, if the IRS for FBI discovers
your failure to file before you do try to catch up, you will be exposed to huge monetary
penalties and possible felony charges. Most foreign banks and financial institutions are
reporting your foreign balances to the IRS.  Best to take action now before you get to
know Paul better.

----------------------------------------------------

Don D. Nelson, is a US tax attorney who has been assisting Americans in Mexico
with their taxes for over 25 years. He offers his clients the absolute privacy provided
by “Attorney client privilege.” His firm has assisted over a hundred expats in Mexico
catch up with their FBAR filings and regular returns If you have questions or wish
to meet with him email him at ddnelson@gmail.com or his Los Cabos
phone number is 624 131 5228. US phone number 949-480-1235