Working remotely has become a common practice for many individuals, especially in a post-pandemic world. However, when it comes to working from a cruise ship, the tax implications can be a bit more complicated than working from home. Jenny Hunnicutt and her husband embarked on a 274-night cruise that spanned the globe, presenting an interesting case for remote workers. Despite being on international waters, American cruise passengers are still subject to U.S. federal income taxes.
The Challenges of Working from International Waters
As a U.S. citizen or permanent resident, individuals working from a cruise ship are required to pay U.S. income taxes on their “worldwide income.” This means that regardless of where you earn your money, whether it’s from a ship or another country, you are still liable to pay taxes in the U.S. Hunnicutt highlighted that her remote work through her consulting business was all based out of Florida, making tax filing a normal process for her and her husband. However, the situation becomes more complex when individuals leave the ship and start working remotely from another country.
When individuals start working from another country, they face a whole new set of challenges regarding taxes. Working abroad as a U.S. citizen or permanent resident means you still have to pay U.S. income taxes, but you could also be liable for taxes in the country you are working in, depending on its laws and duration of work. It’s important to consult with a cross-border tax professional before embarking on such trips to avoid any potential tax issues.
Self-employed cruise passengers may receive income in various forms while working from the ship. Individuals like Joe Martucci, a certified public accountant who offered tax advice to influencers monetizing their content while on board, explained that gifts received from companies in exchange for promotional content are considered taxable income. Additionally, casino prizes won aboard a cruise are also subject to federal income taxes for U.S. citizens and permanent residents.
Awareness and Compliance with Tax Laws
Many individuals might be surprised by the tax implications that come with working remotely from a cruise ship. It’s essential to stay informed and compliant with tax laws to avoid any issues in the future. Consulting with tax professionals specialized in maritime tax law can provide valuable insights into managing tax liabilities while enjoying the remote work lifestyle from a cruise ship.