Moving and working in Mexico for US company

[Deleted]

I am a US permanent resident living in California.  Contemplating living in Mexico for 6 months or so and working for my current company over the internet (I do medical transcription).  Wondering what the tax implications are of doing this.  Would I be able to stay on the payroll? 

[mwcpa]

You will have some "international" issues that I strongly suggest you seek the councel of someone with experience in that area.

There is a treaty between Mexico and the United States.  www.irs.gov/pub/irs-trty/mexico.pdf.  Treaties are legal documents and you need to read the technical explanations, and other materials to fully understand them.  They have some techincal and what can be confusing jargon (leave it to Congress and lawyers to do that).

In addition, as a current resident of California and as you note this leave is intended to be temporary, you may still be deemed a resident for tax purposes of California (many states have this kind of rule).  This means the income earned in Mexico may be taxed by California.  (some states have tougher rules than California, New York, by example, has a "convenience of the employer" rules.... which means if you as the employee decide to work for a New York company someplace else, New York can deem that New York sourced income, New York allocates wages on days worked for non residents).

Again, see a professional who has experience in this area, it may not be cheap.....