Jenny Hunnicutt poses in front of Royal Caribbean’s Ultimate World cruise ship, on which she has been traveling around the world for nearly nine months. While on board, she is working remotely for her writing and consulting business in Florida.
Courtesy: Jenny Hunnicutt
“Worldwide” income taxable
Despite Bahamian flags flying aboard Serenade of the Seas, U.S. cruise passengers make money while working Fees from the ship are still subject to U.S. federal revenue taxexperts say.
As a U.S. citizen or permanent resident, you are subject to U.S. income tax”global revenue,” whether you’re making money from a boat or from another country.
That means filing taxes is normal for Hunnicutt and her husband.
“I work remotely through my consulting business, which is based throughout the state of Florida,” she said. “That doesn’t change for us.”
However, leaving the ship and telecommute Tax issues may arise.
“It’s a completely different story” when you work in another country, said Jane Mepham, a certified financial planner and founder of Elgon Financial Advisors in Austin, Texas, who specializes in international planning.
As a U.S. citizen or permanent resident working abroad, you still generate U.S. income tax – but may also face tax obligations in that country, depending on the country’s laws and how long you have worked there, she said.
Mepham says some places may try to collect income taxes after the first day, which is why you should talk to a multinational tax professional before you go.
To avoid double taxation, some expats are eligible for foreign earned income exclusion or foreign tax credit. But experts say cruise passengers are unlikely to meet the requirements.
Gifts can become “taxable income”
For some self-operated cruise passengers, income may come in different forms.
Another passenger on the boat, Joe Martucci, is a certified public accountant who has lived abroad for 16 years. He is now retired but provided some tax advice to influential people on the ship who profited from content posted about the trip.
Retired CPA Joe Martucci poses for a photo in Montenegro, a stop on Royal Caribbean’s Ultimate World cruise ship.
Courtesy: Joe Martucci
“A company in Australia gave them some gifts. Those gifts were taxable income because they asked (the influencer), ‘Can you show this gift we gave you on TikTok?'” Martucci said. “You have to pay taxes on it.”
Passengers ‘surprised’ by tax on casino winnings
Experts say that for U.S. citizens and permanent residents, casino winnings won on a cruise ship are also subject to federal income taxes, regardless of where the ship was when you won.
“Some people may be a little surprised” by future tax bills, said James Border, a Florida CPA and attorney who specializes in maritime tax law.
Typically, the casino will issue a copy Form W2-Gmust be reported on your tax return. gambling losses According to the IRS, tax deductions cannot be deducted unless you itemize them and keep accurate records.
