Re: New RFC Requirement for Expats, From the Mexico Daily News

by CanuckBob Sun May 22, 2022 1:54 pm

ferret wrote:It is also the reason why I opted not to become a citizen. Anyway, I like being a Canadian citizen and I need triple citizenship (British, Canadian and Mexican) like I need a hole in the head.
I have royalties and dividends. IF I receive them as "income" then I am taxed in Canada. However, I am also officially a non-resident of Canada and have been since 1997. We had to do a deemed disposition of assets and paid the capital gains owing to achieve that. It's one of the reasons (way at the bottom of the list) why I don't want to reside in Canada again. The kids will receive everything capital gains free. When they inherit, the capital gains ticker starts up again if they choose to remain in Canada.

Well technically some of your royalties and dividends could also be subject to Mexican taxes if you choose to declare and file. Fortunately Mexico is not "financially" connected to Canada like the US is (for now). Canada and the US share information with each other so if you lived in the US things could be different. I have some friends that are quite concerned about this and are thinking of leaving Mexico, however, they are in a completely different tax bracket then most of us. They are starting to look at "tax haven" countries such as Antigua which has no income tax.

by brigitte Sun May 22, 2022 2:08 pm

ferret wrote:Too bad you reported his death on a joint account. That was definitely not in your favour. The U.S. is also being a p.i.t.a with a friend. Both she and her husband who died are American citizens. She was advised to take out as much money as possible from all their joint accounts BEFORE informing them of his death.

I did not report my husbands death to the consulate until I had gotten all the money out.. do not worry , I am French and in France we go and pull all money out of accounts as the person is dying... after that too late.. So the first thing I did is get the money where I wanted it , then I reported his death. I left the social security check he received 3 days after his death because I will have to return it and I did not want to have to change into pesos but I moved my deposit to my Mexican account. The account being closed is not a problem but that is what Schwab did after they said they would not.. Now IRS wants a statement of the account on the day of his death ... that is ok too because I had just transferred money out.. pure luck..as his death was sudden and unexpected.

I told the funeral home he wanted to be cremated as a Mexican not an American and asked them not to report his death. I said I would do it when I was ready, which I did Just sent his Mexican death certificate by email and boy same day SS knew about it.. Then when I was ready I informed schwab who did what they say they would not and sent me all the documents I had to fill out.. just ridiculous , Tuesday I will see an accountant about it.. It is slightly irrelevant as there is very little money in the account and it is SS so when it is unblocked they can get their money.. but I was a little surprised when they asked for his non transferible assets worldwide...

by brigitte Sun May 22, 2022 2:11 pm

Yes they look at the tax heavens and grab everything they can from the rest of the people while they are looking at the tax heavens. Meanwhile we pay more taxes than the rich..

by mudgirl Sun May 22, 2022 4:50 pm

brigitte wrote:but I was a little surprised when they asked for his non transferible assets worldwide...

Unless someone has officially renounced their US citizenship (which costs thousands of dollars) the IRS requires everyone they deem a "US Person" to file US taxes and report worldwide income and assets. This includes people who have never stepped foot in the US, never held a US passport, never applied for any benefits, but happened to born to a US citizen overseas.

And the US and Eritrea are the only 2 countries in the world who tax their citizens, worldwide, as opposed to their residents.

by brigitte Sun May 22, 2022 5:05 pm

Mudgirl I am not a US citizen nor a green card holder. However I filed taxes as I have assets there and I filed as a resident because my husband was a US citizen.. The accountant told me that after next year I do not have to file taxes as my husband died this year , however if I want to ask for reimbursement on the 30 they withhold every time i get money from my IRA and I have to get everything before I am 82 , I can be considered a tax resident.. Actually to be a tax resident you have to live there 31 days of the year but since I am a widow I probably can forget about that requirement as well.. Amazing how all of a sudden the visas and all the other BS foreigners have to go through with the US disappear when they want to get your money. SO I cannot work there because I am not a resident but I can be a resident for the IRS...without living there..

by BisbeeGal Sun May 22, 2022 5:14 pm

mudgirl wrote:
brigitte wrote:but I was a little surprised when they asked for his non transferible assets worldwide...

Unless someone has officially renounced their US citizenship (which costs thousands of dollars) the IRS requires everyone they deem a "US Person" to file US taxes and report worldwide income and assets. This includes people who have never stepped foot in the US, never held a US passport, never applied for any benefits, but happened to born to a US citizen overseas.

Where? When?

I'm a US citizen and never been asked to report all of my assets to IRS. Have also handled or helped with settling estates of deceased persons. The only requirement to report assets of a dead person is if their estate is subject to Federal estate taxes; the threshold for that is currently over $ 12.06 million USD.

I do understand that if I have foreign accounts with a balance over 10K USD that I have to file FBAR with IRS.

by mudgirl Sun May 22, 2022 5:37 pm

brigitte wrote: SO I cannot work there because I am not a resident but I can be a resident for the IRS...without living there..

You probably fall under their "US person" designation, as you have assets there. Yes, their tentacles reach far and into every nook and cranny.

Years ago, when flying from Canada to Mexico, because I had a connecting flight in the US, I had to go through US immigration in the Vancouver airport.

Although I was born and raised in the US, I left when I was 17 and have never lived there since. I became a Canadian citizen in 1977, and have never held a US passport since then- I only have a Canadian passport.

So I get this officious asshole at the immigration window who sees that my passport has place of birth as Kansas City, asks if I have ever officially renounced my US citizenship, and when I said no, he got really stroppy, telling me, "Well, from here on out, you are to enter to US as a US citizen on a US passport".

by mudgirl Sun May 22, 2022 5:47 pm

BisbeeGal wrote:
mudgirl wrote:
brigitte wrote:but I was a little surprised when they asked for his non transferible assets worldwide...

Unless someone has officially renounced their US citizenship (which costs thousands of dollars) the IRS requires everyone they deem a "US Person" to file US taxes and report worldwide income and assets. This includes people who have never stepped foot in the US, never held a US passport, never applied for any benefits, but happened to born to a US citizen overseas.

Where? When?

I'm a US citizen and never been asked to report all of my assets to IRS.

I may very well be wrong on that- you would know better than I. Check the FATCA rules, it would say there.
It seems that it isn't the IRS that is asking brigette for the asset info, but Schwab, and I wonder how that can be any of their business.

by BisbeeGal Sun May 22, 2022 5:56 pm

I agree, unless the account doesn't have automatic POD payable on death to surviving spouse.

by brigitte Sun May 22, 2022 6:04 pm

It is Schwab asking for the IRS and without my report they will keep the joint account closed.. Very simple .
I can open an account in my own name but I do not know if Schwab will do it if I do not comply with the first request.. It is no problem the answer is zero as a house is a transferible asset and is not part of the request..
Being a foreigner I am learning a lot about the way the US government work.. they are out for every bit of blood.. I got a 10 page letter on all the stuff I have to do because I am not a US citizen.. It is pretty funny because the assets are in my name only so there is not much they can do but boy if you are not ready, they really suck it to you.
A few years ago my husband asked what would happened if he died to his IRAs..since I was the beneficiary.. No problem they say no, we do not close account and all your wife has to do is come to San Francisco so that was the end of his IRAs..
My husband was a US citizen so yes the IRS asked about his assets worldwide via Schwab.

by Carry Bean Sun May 22, 2022 6:42 pm

mudgirl wrote:
brigitte wrote:but I was a little surprised when they asked for his non transferible assets worldwide...

Unless someone has officially renounced their US citizenship (which costs thousands of dollars) the IRS requires everyone they deem a "US Person" to file US taxes and report worldwide income and assets. This includes people who have never stepped foot in the US, never held a US passport, never applied for any benefits, but happened to born to a US citizen overseas.

And the US and Eritrea are the only 2 countries in the world who tax their citizens, worldwide, as opposed to their residents.

Depends on how much income the U.S. citizen gets each year. Below a certain amount they don’t have to file taxes.

by brigitte Sun May 22, 2022 7:04 pm

yes and no.. I live on Social security so minus the deductible I do not have to report income but I also have to withdraw IRA moneys and they withhold 30 percent of any money I pull because I am not a citizen so if I want to be taxed fairly and get a refund I have to file tax reports.

by mudgirl Sun May 22, 2022 7:31 pm

Carry Bean wrote:

Depends on how much income the U.S. citizen gets each year. Below a certain amount they don’t have to file taxes.

Read the FATCA regulations. It isn't just based on income, it is also based on assets. A foreign resident single person who has 200,000 worth of certain assets- bank accounts, investments, etc. has to report.

by Carry Bean Sun May 22, 2022 7:40 pm

mudgirl wrote:
Carry Bean wrote:

Depends on how much income the U.S. citizen gets each year. Below a certain amount they don’t have to file taxes.

Read the FATCA regulations. It isn't just based on income, it is also based on assets. A foreign resident single person who has 200,000 worth of certain assets- bank accounts, investments, etc. has to report.

True, but still otherwise they do not have to report if their assets are lower and their income is below a certain amount. In my case, part of my assets are in my home here. That doesn’t mean I have to file taxes. My home’s worth isn’t taxable. The only thing taxable is income but that depends on how much that income is.

by brigitte Mon May 23, 2022 12:24 pm

residences are transferable assets I was told and do not have to be reported.. I do not know how they look at homes that are rented.. The rental income has to be reported..and if you pay Mexican tax they can be deducted from the amount.. I believe.but I do not know that for sure.

by mudgirl Mon May 23, 2022 12:56 pm

Certainly if you own a rental home, the money you earn is considered income and has to be reported. And because of the tax treaties, the tax you paid in Mexico will be deducted from the taxes you would owe in the US or Canada. Also, you may be able to deduct more expenses related to your rental up north than in Mexico, as only official facturas with your RFC on them can be used here.

by SunshineyDay Mon May 23, 2022 12:56 pm

What kind of information and documents do they ask for to obtain constancia?
TIA

by brigitte Mon May 23, 2022 3:28 pm

your curp your RFC if you have one
your email
a valid id like INE or immigration card take passport in case
cell phone number
address, take a CFE bill in case.

by CanuckBob Tue May 24, 2022 7:09 am

Take both your residency visa card and your passport.

by cypress Sun May 29, 2022 3:50 pm

cypress wrote:
mudgirl wrote:
cypress wrote:
I ask because it sounds fishy.

What sounds fishy? The publication or the new RFC requirement? Why would you think a new requirement like that sounds fishy?
Because it dies not make sense.

It is not really a new requirement as many of us have had an RFC for years.

by mudgirl Sun May 29, 2022 4:23 pm

cypress wrote:

It is not really a new requirement as many of us have had an RFC for years.

It is a new requirement that every Mexican and every resident over the age of 18 has to have an RFC.

That many people have had RFCs for years is irrelevant.

by cypress Mon May 30, 2022 12:31 pm

mudgirl wrote:
cypress wrote:

It is not really a new requirement as many of us have had an RFC for years.

It is a new requirement that every Mexican and every resident over the age of 18 has to have an RFC.

That many people have had RFCs for years is irrelevant.

For those that already have an RFC it is not relevant

by mudgirl Mon May 30, 2022 12:51 pm

cypress wrote:
mudgirl wrote:
cypress wrote:

It is not really a new requirement as many of us have had an RFC for years.

It is a new requirement that every Mexican and every resident over the age of 18 has to have an RFC.

That many people have had RFCs for years is irrelevant.

For those that already have an RFC it is not relevant

Do you always talk in pointless circles?

by Intercasa Mon May 30, 2022 10:17 pm

If you already have an RFC you will need to prove it so you can get a password, wee generate at our office or better to get the electronic signature so either way you can print the certificate with digital signatures and QR codes showing you have the number in order to use it for utilities, banks and capital gains exemptions to name a few.

by SunshineyDay Mon May 30, 2022 11:05 pm

Intercasa wrote:If you already have an RFC you will need to prove it so you can get a password, wee generate at our office or better to get the electronic signature so either way you can print the certificate with digital signatures and QR codes showing you have the number in order to use it for utilities, banks and capital gains exemptions to name a few.

So you can generate the document at your office? No need to go to Guadalajara.

by cypress Tue May 31, 2022 3:48 am

mudgirl wrote:
cypress wrote:
mudgirl wrote:
cypress wrote:

It is not really a new requirement as many of us have had an RFC for years.

It is a new requirement that every Mexican and every resident over the age of 18 has to have an RFC.

That many people have had RFCs for years is relevant.

For those that already have an RFC it is relevant

Do you always talk in pointless circles?[/ when there are circles.

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