Jenny Hunnicutt’s decision to embark on a 274-night cruise around the globe aboard Royal Caribbean’s Serenade of the Seas presented a unique opportunity for remote workers in a post-pandemic world. While she and her husband were well-accustomed to a remote lifestyle, working from a cruise ship raised questions about taxes and legal implications for earning money in international waters.
Despite flying a Bahamas flag, American cruise passengers earning money while working from the ship are still subject to U.S. federal income taxes. As U.S. citizens or permanent residents, individuals incur taxes on their worldwide income, whether earned from a ship or another country. This means that filing taxes becomes a necessary part of the remote working experience for individuals like Hunnicutt.
While working from a cruise ship may not pose significant tax issues, leaving the boat and working remotely from another country could trigger complex tax liabilities. U.S. citizens or permanent residents working abroad may face tax obligations in both the U.S. and the country they are working in, depending on local laws and the duration of their stay. Consulting with a cross-border tax professional before embarking on such a journey becomes essential to avoid potential tax complications.
For self-employed individuals earning income from various sources while on a cruise, such as influencers monetizing content or casino prizes won aboard the ship, understanding the tax implications is crucial. Gifts received in exchange for promotional content or casino winnings are considered taxable income and must be reported accordingly. Failure to address these tax obligations could lead to unexpected tax bills and legal consequences.
Given the complexities of international taxation and the unique circumstances of working from a cruise ship, consulting with tax professionals specializing in cross-border tax issues is recommended. Individuals like Joe Martucci, a retired CPA who provided tax advice to influencers on board, emphasize the importance of understanding and complying with tax laws to avoid potential penalties and legal troubles. With proper guidance and preparation, remote workers can navigate the challenges of working from international waters while staying compliant with tax regulations.
While the allure of working from a cruise ship may seem like a dream come true for many remote workers, it is essential to be aware of the tax implications and legal considerations associated with earning money in international waters. By staying informed, seeking professional advice, and proactively addressing tax obligations, individuals can make the most of their remote working experience while avoiding potential pitfalls.