US and Mexico Taxes for Americans Living in Mexico. If you have a fideicomiso, Mexican corporation, a foreign bank account in Mexico, or live in Mexico this blog will have data you need about the required forms 5471, 3520, 3520A, FBAR 114, 926, 8865, 2555, 1116, etc., which you may have to file if you live and work in Mexico.
The Wall Street Journal has reported 10 ways to avoid a tax audit. The most useful is to report your business income in a corporation or LLC which can avoid the use of a schedule C on your personal tax return. It states that using a schedule C to report your business income can result in your chance of being audited being 10 times higher using a corporation. Read here for other tips and recommendations.