Jenny Hunnicutt decided to take her love for travel to the next level by embarking on a 274-night cruise around the world aboard Royal Caribbean’s Serenade of the Seas. This journey, which gained viral attention on TikTok, was a unique opportunity for Hunnicutt and her husband, both remote workers, to combine work and leisure in a post-pandemic world. Despite the challenges of working from a cruise ship, Hunnicutt embraced the adventure and adapted to the remote lifestyle required for this unconventional trip.
While the Serenade of the Seas may fly a Bahamas flag, American passengers working and earning income while onboard are still subject to U.S. federal income taxes. As U.S. citizens or permanent residents, individuals are required to pay taxes on their worldwide income, regardless of where they are earning that income from. This means that Hunnicutt and her husband had to navigate tax filing procedures just like they would if they were working from their home state of Florida.
Although working from a cruise ship might not affect tax filings significantly for Americans, leaving the ship and working remotely from another country could trigger tax issues. Certified financial planner Jane Mepham warns that working abroad comes with a different set of tax liabilities, as individuals may be required to pay taxes in both the U.S. and the country where they are working. To avoid potential double taxation, it is crucial to consult with a cross-border tax professional before embarking on such a trip.
For self-employed individuals like Joe Martucci, who offered tax advice to influencers monetizing their content from the cruise ship, income can come in various forms. Martucci highlighted that gifts received from companies in exchange for promotional content are considered taxable income. Similarly, casino prizes won while onboard a cruise are subject to federal income taxes for U.S. citizens and permanent residents, regardless of the ship’s location when the jackpot is hit.
Certified public accountant and attorney James Border emphasized that some cruise passengers may be surprised by future tax bills, especially when it comes to casino winnings. Casinos typically issue Form W2-G for any significant prizes won, which must be reported on tax returns. Failure to declare these winnings could result in penalties or legal consequences, highlighting the importance of understanding the tax implications of earning income while cruising.
Working remotely while cruising can be an exciting and fulfilling experience, but it also comes with complex tax considerations for Americans. From reporting worldwide income to navigating potential tax liabilities in foreign countries, individuals must be proactive in seeking professional tax advice to avoid costly mistakes. By understanding the tax implications of earning income while cruising, travelers can ensure compliance with tax laws and enjoy their adventures without unexpected financial burdens.