In a world where remote work has become increasingly popular, some individuals are taking advantage of the opportunity to travel while still earning a living. One such person is Jenny Hunnicutt, a Florida-based writer and consultant who embarked on a 274-night cruise aboard Royal Caribbean’s Serenade of the Seas. Her journey, which gained attention on TikTok, showcased the unique lifestyle of working remotely from a cruise ship.
Working from a cruise ship presents a unique set of challenges when it comes to taxes, particularly for Americans earning money while in international waters. Despite the Bahamas flag flying atop the Serenade of the Seas, American cruise passengers are still subject to U.S. federal income taxes. As U.S. citizens or permanent residents, individuals must report their “worldwide income,” whether it’s earned from a ship or another country.
While working from the ship itself may not pose significant tax issues for individuals like Hunnicutt and her husband, leaving the boat to work remotely in another country could trigger tax implications. Working from a different country introduces a whole new set of rules and regulations that must be followed. U.S. citizens working abroad may still owe U.S. income taxes, in addition to potential tax liability in the country where they are working.
For self-employed individuals, income earned while on a cruise ship may come in various forms. Joe Martucci, a certified public accountant on board, offered tax advice to influencers monetizing their content from the trip. He highlighted the importance of understanding the tax implications of gifts received from companies, as well as casino prizes won aboard the ship. Both gifts and casino winnings are considered taxable income for U.S. citizens and permanent residents.
To avoid double taxation, some expats qualify for the foreign earned income exclusion or the foreign tax credit. However, cruise passengers may not meet the requirements for these exclusions. Consulting with a cross-border tax professional before embarking on a trip is essential to understand and mitigate potential tax liabilities.
Working remotely from a cruise ship can be a dream come true for many individuals, offering the opportunity to explore the world while maintaining a source of income. However, the tax implications of earning money while traveling internationally can be complex and require careful consideration. Understanding the rules and regulations surrounding international income is crucial to avoid potential tax issues and ensure compliance with the law. By seeking advice from tax professionals and staying informed about tax laws, remote workers can enjoy their travel adventures without the worry of unexpected tax bills.
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