Calling yourself an expat does not necessarily mean you renounce or reject your home country. An expatriate is any person living in a different country from where they were born as a citizen. Recently, the term “expat” is often used in the context of professionals working abroad such as oil workers, missionaries and retirees living abroad.
In order to meet the criteria for the exclusion that allows U.S. expats to avoid paying U.S. taxes on their first $97,600.00 worth of U.S. income ( you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation ($91,500 for 2010, $92,900 for 2011, $95,100 for 2012, and $97,600 for 2013), the expatriate must have a tax home in a foreign country, as well as be either a legitimate resident in that country (Resident Temporal or Resident Permanente) or spend at least 330 days a year outside the United States.
A stamped passport would verify your time outside the U.S. whether or not you own a home in your new country.
The US does tax citizens on income earned abroad, as evident in the listing of international taxation. International taxation is the determination of tax on a person subject to the tax laws of that country’s laws even when those citizens are taxed by their countries of residence.
However, as stated above, US citizens are allowed to exclude their first $97,600.
Additionally, a 2010 US law known as FATCA requires expatriates to report any foreign bank accounts exceeding $50,000, with heavy fines for noncompliance.
We recommend getting a tax accountant that is familiar with international tax laws. Ask your U.S. accountant if they are comfortable continuing to handle your taxes with your move to Mexico, and if they are not, see if they can recommend one to you. Depending upon the community you move to, you may be able to get a local referral.