Minimum wage for 2012

raqueteer wrote:O.K. here's the answer to my question above.

http://rollybrook.com/how_to_move_to_mexico.htm


The procedure for applying for an FM2 is the same as applying for an FM3. The monthly income requirement is 400 times the min wage. For 2012 that would be $24,956 pesos.

Now the second person is required to supply half of the income requirements of the main applicant. According to Rolly's site each dependent, which in most cases here is considered to be the wife increases the income requirement by 50%.

24,956 pesos plus 12,478 pesos. Grand total for two, not taking into consideration home ownership. $37,432 pesos per month.

Raq, I am not sure this is accurate, and I am not challenging for argument sake....I know at least 20 people @ lakeside, living on SS, that have been here over 20 years.....they don't come close to 22,000 pesos per month. I stated many posts ago, that I was required to provide translated copies, notarized, of financial status, proving savings, not income. Seems as the whole thing is a mess......Is Mexico going to start deportation process on FM3 holders....with a monthly income of 18,000 pesos per month, that own their home here, living as a couple?

Jim, I'm pretty sure there are ways around this, such as making larger transfers for three months prior to renewal. Another way is a healthy bank balance, such as sufficient to survive for a year. So, taking the 15,000 peso deal, add in the wife's income, for 22,000, not exact, if you had a bank balance of 264,000 pesos you're good as far as I know, since the FM3 is only good for one year.

Also I think that usually they cut the income requirements big time if you own a house. This may be discretionary, but I've never heard of anyone getting booted out. Lets say they did, just come back in on an tourist visa. No reason you have to have an FM3 or FM2 in order to own a house here that I know of, except for the restricted zone by the coast and you require a fidecomisio. There are no income requirements for a tourist visa.

Some people who have expensive homes might want to go for an FM 2 in order to avoid capital gains. From what I understand that is for homes over 550,000 U.S. I could be wrong here, just rambling on, but I'm sure there are lots of ways to deal with this. Maybe somebody who is really up on this could explain it better.

Raq, this turning into a convoluted mess. I have a friend , recent widow, lived here for 25 years, paid 30,000 USD for her home. She has been advised she must apply/receive FM2, prior to closing....or face 30% capital gains tax. Also, they will not accept payment receipts as proof of improvements on home.....without a factura. Photo's don't count.....this is frustrating and rather confusing.

WOW, Maybe USA should apply same requirements to Mexican visitors...LOL,
Not trying to start a huge debate....but????

Hi
Heard the same thing about facturas on a post somewhere else, maybe even in a Spencer post on (gasp) TOB. I also read that it applied to houses in any price range, and the "primary residence factor was interpreted strictly. Bummer, yes.

Whoa, this is just not good at all!!!!! Let's say this is the real and final deal, what kind of FM2 do you need to have? Is it true that any FM2 is now the route to citizenship or permanent residence?

Facturas, hmmmm, also not going to happen, at least for us.

Primary residence, O.K. this is our one and only.

My D.H. has just put on Christmas carols. I've gotta run now and come up with some new lyrics. They won't be printable here kids.

gringal wrote:Hi
Heard the same thing about facturas on a post somewhere else, maybe even in a Spencer post on (gasp) TOB. I also read that it applied to houses in any price range, and the "primary residence factor was interpreted strictly. Bummer, yes.

Gringal, I posted this about a month ago...On this board....I've been told, still not confirmed....proper facturas are the only acceptable proof of improvments....photo's before and after don't count, and this was confirmed by Spencer. I have signed receipts by contractors, confirming work completed, and paid. Added heated pool, casita ....approx. 700,000 pesos, now maybe looking @ 30% cap gain., when I paid the above when pesos were 10.2 to $ back in early 2006.....the math kinda sucks.

This is the link that was discussed most recently on FM2 and Capital Gains (Nov. 13 on TOB). I posted the article that Seewee had previously posted on page one and on page two, I summarized our own experience. It's worth reading BUT until immigration gets its act together it's the fly in the ointment.

http://www.chapala.com/webboard/index.php?showtopic=32050

All sources I read say the DF minimum wage is 62.33 and GDL is 60.57, where is your figure from?

OOPS. Here are the corrected numbers:
The basic minimum wage for 2012 will be $62.33
The minimum monthly income required for an FM3 (No Inmigrante) will be $15,583.
For an FM2 (Inmigrante), it will be $24,932.
Pesos, of course.

Rolly wrote:OOPS. Here are the corrected numbers:
The basic minimum wage for 2012 will be $62.33
The minimum monthly income required for an FM3 (No Inmigrante) will be $15,583.
For an FM2 (Inmigrante), it will be $24,932.
Pesos, of course.

This has gotta be a bad joke on the part of the Mexican Gov't. We are all Seniors here trying to live on our SS each month which is waaaay less than Mexico is asking us to bring here each month.

Do you think that we can afford $ 24,932 persos per person brought here every month to get an FM 2?? Are we supposed to trash our already beated down IRA'S?

Then there's the question of the IRS taxing us on over $ 10 K in Mexican banks. I guess Mexico doesn't want us to sell our houses and have new people buy here with these totally ridiculous laws.

Then there's the question of the IRS taxing us on over $ 10 K in Mexican banks.

John,could please explain what you mean by this remark?. Quite sincerely, I have no idea what you mean by this. The IRS is taxing you on anything over $10,000 USD "...in Mexican banks," ? I really don´t get what you mean. Thanks in advance for enlightening me on this tax of which I have never heard.

John
You do not have to bring or spend that amount per month, you have to be able to demonstrate that you earn that a month or have it in the bank (Mexican or foreign.) They usually look at 3 months worth of statements so you have to show you have the monthly income for 3 months rather than for the whole year.
It is not complicated ,no point getting on your great horses about it. IRA money can be shown if they question the 3 months.
I came here 10 years before I collected any SS . I had zero regular income. I would bring in what I needed to show them for the 3 months they wanted and would withdraw what I needed to live on the rest of the year from the US and that was fine.
Now I am Inmigrado and do not have to show anything and do not have to pay yearly fees either. It is worth paying more for 5 years if you can do it , be done with it and not having to worry about it , ever.

hound dog wrote:Then there's the question of the IRS taxing us on over $ 10 K in Mexican banks.

John,could please explain what you mean by this remark?. Quite sincerely, I have no idea what you mean by this. The IRS is taxing you on anything over $10,000 USD "...in Mexican banks," ? I really don´t get what you mean. Thanks in advance for enlightening me on this tax of which I have never heard.

I agree, haven’t a clue, waiting for enlightenment. I wonder if he may be talking about the necessity of banks reporting of deposits, in CASH, over 10K?

hound dog wrote:Then there's the question of the IRS taxing us on over $ 10 K in Mexican banks.

John,could please explain what you mean by this remark?. Quite sincerely, I have no idea what you mean by this. The IRS is taxing you on anything over $10,000 USD "...in Mexican banks," ? I really don´t get what you mean. Thanks in advance for enlightening me on this tax of which I have never heard.

I maybe wrong on taxing you, but you must report to the IRS if you have over $ 10 K in any foreign bank account. You do this by checking Form 1040 or filling out the FBAR form. Check with your accountant.

johninajijic wrote:

hound dog wrote:Then there's the question of the IRS taxing us on over $ 10 K in Mexican banks.

John,could please explain what you mean by this remark?. Quite sincerely, I have no idea what you mean by this. The IRS is taxing you on anything over $10,000 USD "...in Mexican banks," ? I really don´t get what you mean. Thanks in advance for enlightening me on this tax of which I have never heard.

I maybe wrong on taxing you, but you must report to the IRS if you have over $ 10 K in any foreign bank account. You do this by checking Form 1040 or filling out the FBAR form. Check with your accountant.

O.K. now I remember, this issue has yet to be resolved. My opinion is unless the US comes up with some kind of trade off to enforce (Mexican) banks to comply this issue is mute. You can personally volunteer this information or not. If you’ve already paid taxes on income, whether it is US or Mexican, I can’t see much of an issue. However if one is receiving an income that no taxes are being paid they may want to reconsider.

Actually with the rise in the dollar the net effect for income is actually down even though the income requirement went up.

Currently besides deposits you can show 12 times the monthly requirement in an account, whether it is a retirement or 401k, IRA, etc and still qualify.

As usual, John is confused. The $10,000 he talks about is the FBAR requirement. This is reported to the Dept of Treasury, not the IRS. This is if you have $10,000 US or more in Mexican accounts. And this is an aggregate amount, so 3 different accounts with $4,000 US triggers the reporting requirement.

As far as taxes go, you are supposed to report all interest and dividend income to the IRS, no matter the origin of the account. You declare the income, but you take a deduction for taxes already paid to the Mexican Govt. In other words, you are taxed on the difference between the amount due according to US tax law, and the amount already paid to Hacienda. It's called the Foreign Tax Credit.

I have heard that starting in 2012, the IRS will also be requiring the reporting of the $10,000 US on a separate form. Ni modo.

O.K. now I remember, this issue has yet to be resolved. My opinion is unless the US comes up with some kind of trade off to enforce (Mexican) banks to comply this issue is mute. You can personally volunteer this information or not. If you’ve already paid taxes on income, whether it is US or Mexican, I can’t see much of an issue. However if one is receiving an income that no taxes are being paid they may want to reconsider.

This is so wrong. The issue is resolved. It is a legal requirement for US citizens to declare foreign accounts over $10,000 to the US Treasury Dept. You may think it is unresolved, but I can assure you it is. I'll be interested to see how your "you can personally volunteer this information or not" defense works.

You might like to read this:

FBAR

And by the way, The U.S. has tax treaties with Mexico.

Well, FBAR sounds about right as a description.

Don't you mean FUBR???

Intercasa wrote:Don't you mean FUBR???

No, actually it was a shorter form of FUBAR.

In this case you don't need the U because you already know it is You.

This was sent to me by my Tax Accountant this year.

> Information on Foreign Bank Account Reports
>
> Dear Clients and Friends.:
>
> A great many of you have expressed a lot of anxiety to me over the rules for FBAR - Foreign Bank Account Reporting. Although the status of this issue is changing almost daily, let me give you the latest information available to aid you in your decision about reporting your foreign bank accounts.
>
> I am a member of the Tax Advisory Committee, and also a Country Representative for American Citizens Abroad (ACA). I will be quoting extensively from papers prepared by ACA, and am also attaching PDF files their position papers directly if you wish to read for detailed information about the issues surrounding FBAR reporting (and, later, FACTA)
>
> Please pass on this letter to anyone who wish, and/or refer them to my website, www.taxesinmexico.com. This article and and accompanying reports from ACA are on my website under "Notes to Clients".
> Background
> The FBAR rules were originally passed for the legal means to pursue organized crime, drug dealers, money launderers, tax evaders, and other criminals. The rules have been in effect for over 30 years, but were essentially dormant. Under a series of new acts by Congress after 9/11, the enforcement of the law moved specifically to the IRS, and substantially increased the penalties for not filing the FBAR.
>
> The essence of the rules are:
> 1 If you have any accounts outside the US - bank accounts, securities, annuities, currencies, cash value life insurance, or other financial accounts [but not real estate, yet, under this particular rule]:
>
> a) For aggregate amount, at the highest level at any time during the year of under $10,000, you must check the box at the bottom of Schedule B on your 1040 tax return, and fill in the country (ies) where you have such account. For under $10,000, no FBAR is required
>
> b) For aggregate amount from all institutions, again at the highest level at any time during the year of over $10,000, you must file an FBAR (IRS Form TD F 90-22.1) for each account which you own or have signatory power over. This would include if you are the officer of a company, signor on a bank account for a charity, or anything similar. The form asks the name, address, and account number of the institution, the highest balance at any time in the year, and whether you own the account in your own name, jointly, or as signatory power for some other entity. You must file an FBAR form for each separate institution, and for each ownership status.
>
>
> The FBAR form is filed separately from your tax return, is due June 30th without any extensions, and is mailed (not e-filed, not yet) to a Detroit address. The FBAR form does not impose any tax. It only asks you what accounts you have, but obviously part of the purpose is to see whether you have been reporting any income that these foreign accounts have generated.
> If you do have interest income from a Mexican account, for example, you should report it. You will also get a credit for the taxes that are withheld from your account paid to Mexico, so you shouldn't have to pay taxes on the same money twice. I have had some clients with Banamex accounts, for example, (which is owned by Citibank) receive actual 1099s for their interest, and there is also shown the 'foreign taxes paid', which is usually more than would be owed to the US on the same amount of income. For a Banamex account, I generally do not include that on the FBAR, but in effect it "looks" like an American account with a 1099, not like an unknown Mexican account.
>
> Stock trading accounts are another matter. Mexico does not tax capital gains in stocks; the US does. If you have gains (and losses) in a Bolsa account (actually realized by a sale, not just a change in value of the index), you should be reporting these on Schedule D of your tax return, and should include the account in your FBAR.
>
> 2. Starting in 2011, there is going to be a new form, Form 8938 that the IRS has released (but has not released the instructions for it yet), which will apply to Americans owning more than $50,000 in assets in foreign institutions. This can possibly include the value of real estate, just the value, again nothing relating to income unless this is a rental property in Mexico. If you have property bought through a trust in Mexico, if you have interest in a business in Mexico, there may be other forms required to file, which I will write more about in a separate notice.
>
>
> Filing Prior Year FBARS
>
> There has been a LOT of press about a program the IRS has had to allow people to file their past year FBARs (back to 2003) if they had not previously done so. This was billed as an "amnesty" program, in that the normal $10,000 fine for not filing the form would be waived (any amended returns to include unreported income, however, would be subject to interest and penalties). Many people participated in this program, particularly those knowing they owed no additional taxes. [To be clear, this was for "non-willful" violators - "I didn't know I had to do it; I wasn't trying to hide income" - as opposed to the drug lords and money launderers that this was all supposed to be for in the first place]
>
> However, "amnesty" turned out to be deceptive. 18 months after the 2009 program, the IRS retroactively changed the rules and stated that all participants would be treated as "willful" violators, putting them into the Criminal Investigation side of the IRS, extending the statute of limitations to 6 years, and making them subject to a fine of 20% of the ASSETS each year for not filing (again, highest balance at any time during the year). A similar program was offered in 2010, extending to August 31, 2011 (and then September 9, 2011, because of Hurricane Irene), only this time the penalties would be up to 25% of the assets because you didn't take advantage of taking part in the prior year.
>
> Virtually all professional tax preparers dealing with international issues completely disagreed with the participation in this program. The alternative was to submit what was called a "quiet disclosure", stating that you were NOT willful, any back taxes were paid, and that you did not know of the obligation. In some cases, the IRS denied the "quiet disclosure", and automatically put anyone who filed prior year FBARs into the program, meaning they could be subject to the horrendous penalties. This has lead to many efforts to change the law, and various organizations are moving forward with court cases to sue the IRS. Please see the attached articles from ACA.
>
>
> Enforcement - and the controversy over FACTA
>
> FACTA stands for Foreign Account Tax Compliance Act, and you will see it referred to in some of the other articles attached relating to FBAR reporting. This law was passed in 2010, and set a date of January 1, 2013, by which time ANY foreign financial institution worldwide that wishes to invest in a US asset, either for themselves or any client (American citizen or not), must sign a contract with the IRS in which it promises to identify all their American clients, and send to the IRS the information regarding the account balances, and any income generated by the account. This will be similar to receiving a 1099 form as you do now from American financial institutions, but those do not include your account balances. If they do not sign this agreement, all income relating to a US asset is subject to 30% withholding, even if the income does not deal with an American citizen.
>
> As expected, the reaction to this law has been extremely negative by the global financial community. It is estimated it would take each institution $10-15 million dollars to set up their computing systems to meet these requirement. Canada has already stated that they will not comply with these rules. Canada normally does work with the US and the IRS for the collection of back taxes, but has stated that this law deals only with "penalties", not owed taxes, and as such it will not participate. Some other banks, most notably HSBC, have stated that they will no longer keep open any accounts for expat Americans, worldwide.
> The US tax system is based on a "paper trail", meaning information on your interest income, dividends, stock sales, alimony payments, Social Security income, pensions, are all already known by the IRS, through the use of 1099s, W-2s, and other forms with which we are all familiar. When opening a bank account in Mexico, no one asks for your Social Security number, or even your nationality. FACTA is trying to create that same paper trail for all foreign accounts, but is meeting very stiff resistance from the global financial community. There are many efforts to change the amounts for only accounts over $500,000, to delay the starting date for it, or to repeal it altogether.
> The tax/financial press has written a lot about the idea that the two amnesty programs offered by the IRS, particularly the 2nd one ending September 9, 2011, were in essence 'failures', because only a handful of accounts trickled in, with most people scared off by the prospect of significant penalties. However, the IRS is putting its own face on this, and calling it a wonderful success. Because I cannot save this article into PDF format, I am reprinting the most recent announcement from the IRS regarding the programs
>
> [This is IRS talking, NOT ME!]
>
>
> IRS Shows Continued Progress on International Tax Evasion WASHINGTON — The Internal Revenue Service continues to make strong progress in combating international tax evasion, with new details announced today showing the recently completed offshore program pushed the total number of voluntary disclosures up to 30,000 since 2009. In all, 12,000 new applications came in from the 2011 offshore program that closed last week.
> The IRS also announced today it has collected $2.2 billion so far from people who participated in the 2009 program, reflecting closures of about 80 percent of the cases from the initial offshore program. On top of that, the IRS has collected an additional $500 million in taxes and interest as down payments for the 2011 program — a figure that will increase because it doesn’t yet include penalties.
> “By any measure, we are in the middle of an unprecedented period for our global international tax enforcement efforts,” said IRS Commissioner Doug Shulman. “We have pierced international bank secrecy laws, and we are making a serious dent in offshore tax evasion.”
> Global tax enforcement is a top priority at the IRS, and Shulman noted progress on multiple fronts, including ground-breaking international tax agreements and increased cooperation with other governments. In addition, the IRS and Justice Department have increased efforts involving criminal investigation of international tax evasion.
> The combination of efforts helped support the 2011 Offshore Voluntary Disclosure Initiative (OVDI), which ended on Sept. 9. The 2011 effort followed the strong response to the 2009 Offshore Voluntary Disclosure Program (OVDP) that ended on Oct. 15, 2009. The programs gave U.S.taxpayers with undisclosed assets or income offshore a second chance to get compliant with the U.S. tax system, pay their fair share and avoid potential criminal charges.
> The 2009 program led to about 15,000 voluntary disclosures and another 3,000 applicants who came in after the deadline, but were allowed to participate in the 2011 initiative. Beyond that, the 2011 program has generated an additional 12,000 voluntary disclosures, with some additional applications still being counted. All together from these efforts, taxpayers came forward and made 30,000 voluntary disclosures.
> “My goal all along was to get people back into the U.S. tax system,” Shulman said. “Not only are we bringing people back into the U.S. tax system, we are bringing revenue into the U.S. Treasury and turning the tide against offshore tax evasion.”
> In new figures announced today from the 2009 offshore program, the IRS has $2.2 billion in hand from taxes, interest and penalties representing about 80 percent of the 2009 cases that have closed. These cases come from every corner of the world, with bank accounts covering 140 countries.
> The IRS is starting to work through the 2011 applications. The $500 million in payments so far from the 2011 program brings the total collected through the offshore programs to $2.7 billion.
> “This dollar figure will grow in the months ahead,” Shulman said. “But just as importantly, we have changed the risk calculus. Americans now understand that if they try to hide assets overseas, the chances of being caught continue to increase.”
> The financial impact can be seen in a variety of other areas beyond the 2009 and 2011 programs.
>
> Criminal prosecutions. People hiding assets offshore have received jail sentences running for months or years, and they have been ordered to pay hundreds of thousands and even millions of dollars.
> UBS. UBS AG, Switzerland's largest bank, agreed in 2009 to pay $780 million in fines, penalties, interest and restitution as part of a deferred prosecution agreement with the U.S. government.
> The two disclosure programs provided the IRS with a wealth of information on various banks and advisors assisting people with offshore tax evasion, and the IRS will use this information to continue its international enforcement efforts.

An interesting read John...thanks for posting.

Do I agree with what the IRS is doing? Not really...they should concentrate on those with $100,000 USD or more in offshore accounts not the small citizen with $10,000 USD. The concept was to go after criminal activity not retirees whiling away their days left.

I thought that second ruling was called FATCA, yes it is.

http://www.forbes.com/sites/robertwood/2011/11/17/irs-fatca-guidance-round-3/

Aimed at people who are invested in hedge funds.

http://www.deloitte.com/view/en_US/us/Services/tax/13494694597bd210VgnVCM1000001956f00aRCRD.htm

I'd just like to know who comes up with these acronyms?

For the regular citizen, well they're essentially FUBAR, and the fat cats are now FATCA. Got to give those IRS guys credit for a macabre sense of humor.