Foreign Earned Income Exclusion
If you are a US citizen, you must pay US federal income taxes forever, regardless of where you live or where your income originates or anything else I’m aware of. That’s the bad news.
The good news is, if you qualify by living in Mexico, you may be able to exclude more than $100,000 of earned income (not unearned income such as pensions) if you file single and more than $200,000 if you file jointly from your US federal tax return. The way you do this is through the Foreign Earned Income Exclusion. Most (but not all) states also allow the exclusion.
- To learn more about the Foreign Earned Income Exclusion, see the article I wrote on it a few years ago (https://www.thestreet.com/opinion/expats-may-be-able-to-avoid-paying-u-s-income-taxes-say-experts-13519656), and then ask your qualified US tax preparer.