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How can avoid double taxation USA and Mexico?

I worked in 2021 to a USA company as a contractor and I lived in Mexico, I paid in Mexico the taxes for almost income got from this company, and I invoiced this money, I got a work visa and I moved in October 2021.

This company hired me as employee in November 2021 in USA, In this year I received the 1099-NEC form and W2.

 

My doubt is if someone can help me how prepare the tax return and avoid a second taxes for the 1099-NEC. that I have paid in Mexico.

 

 

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3 Replies
ThomasM125
Expert Alumni

How can avoid double taxation USA and Mexico?

You need to report all the income you earned on your US tax return. Then, you can apply for a credit for taxes paid to Mexico. You do this in TurboTax in the Deductions and Credits section, then Estimates and Other Taxes Paid, then Foreign Taxes.

Your foreign tax credit will only apply to the portion of your wages earned in Mexico, so the credit for the current year may be less than what you paid in for taxes in Mexico. However, you can carry forward any un-used credit to future years.

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How can avoid double taxation USA and Mexico?

Thank you ThomasM125

 

after present the US tax return, should I pay the taxes and after apply for the credit?.

I do not know how to do this, and I talk with 5 tax specialist in my city but everyone told me that they do not know how do consider the tax that I paid in Mexico.

 

I am going to request a turbotax specialist to help me.

 

thanks 

ThomasM125
Expert Alumni

How can avoid double taxation USA and Mexico?

You would apply for the credit when your prepare your US tax return. It will be used on your form 1040 as a reduction of your US income tax.

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