Embarking on a 274-night cruise around the globe may sound like a dream come true for many, but for Jenny Hunnicutt, it became a reality. As a writer and consultant based in Florida, Hunnicutt saw this journey as an opportunity for remote workers in a post-pandemic world. Despite being accustomed to the remote lifestyle and working from various locations for the past three years, the tax implications of earning money while aboard a cruise ship raised some interesting questions.
One might assume that working while on a ship flying a Bahamas flag would exempt Americans from U.S. federal income taxes. However, experts suggest that as a U.S. citizen or permanent resident, you are still subject to U.S. income taxes on “worldwide income,” regardless of where you are earning money from. For Hunnicutt and her husband, who are used to working remotely from Florida, filing taxes remained a normal part of their routine throughout the cruise.
Leaving the cruise ship and working remotely from another country could potentially trigger tax issues for Americans. According to certified financial planner Jane Mepham, U.S. citizens or permanent residents working abroad might face tax liability for that country, in addition to U.S. income taxes. This presents a complex tax situation that requires careful consideration and consultation with a cross-border tax professional before making the transition.
For self-employed cruise passengers like Joe Martucci, who provided tax advice to influencers monetizing their cruise content, income could come in various forms. Gifts received from companies in exchange for promoting their products may be considered taxable income. Similarly, casino prizes won aboard a cruise are subject to federal income taxes for U.S. citizens and residents, regardless of the location of the ship at the time of winning.
It is crucial for individuals earning income while on a cruise ship to be aware of the tax implications and potential liabilities involved. Consulting with tax professionals specializing in international and maritime tax law can help navigate the complexities of taxation while working remotely from various locations around the world. Understanding the regulations and requirements can prevent surprises and ensure compliance with tax laws.
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