Working remotely from a cruise? That's why the IRS still expects taxes

Although the Serenade of the Seas flies a Bahamian flag, American cruise passengers earn money while they work from the ship are still subject to US federal income tax, based on experts.

As a U.S. citizen or everlasting resident, you’re subject to U.S. income taxes on “World income,” no matter whether you’re earning money from a ship or one other country.

This signifies that filing a tax return was a traditional process for Hunnicutt and her husband.

“My remote work through my consulting business is done entirely from Florida, where my company is based,” she said. “Nothing has changed for us.”

However, leaving the boat and dealing remotely could potentially pose tax issues.

Working from one other country, “it’s a completely different thing,” says certified financial planner Jane Mepham, founding father of Elgon Financial Advisors in Austin, Texas, which makes a speciality of international planning.

As a U.S. citizen or everlasting resident abroad, you’d still should pay U.S. income taxes, but you could possibly even be subject to tax liability depending on the country's laws and the length of your employment there, she said.

Some places may try to gather income taxes after the primary day, so it’s best to speak to a cross-border tax advisor before traveling, Mepham said.

To avoid double taxation, some expats are entitled to the Exclusion of income earned abroad or the Credit for foreign taxesBut experts say cruise passengers are unlikely to fulfill these requirements.

For some self-employed cruise passengers, income may take different forms.

Joe Martucci, one other passenger on the ship, is a CPA who lived abroad for 16 years. He is now retired but offered some tax tricks to influencers on board who monetized content posted concerning the trip.

“A company in Australia gave them some gifts. These gifts are taxable income because they asked for [the influencers]”Can you make a TikTok showing this gift we gave you?'” Martucci said. “You have to pay taxes on that.”

For U.S. residents and everlasting residents, casino winnings aboard a cruise are also subject to federal income taxes, no matter where the ship is situated if you hit the jackpot, experts say.

“Some people might be a little surprised by future tax reform,” says James Border, a Florida-based certified public accountant and attorney who makes a speciality of maritime tax law.

Casinos normally issue a duplicate Form W2-Gwhich should be declared in your tax return. Gambling losses can’t be deducted based on the IRS unless you itemize the tax advantages and keep accurate records.