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-   -   Are US citizens taxed on value of room & board? (http://www.cruisemates.com/forum/crewmembers/390172-us-citizens-taxed-value-room-board.html)

Luv2Cruise25 June 26th, 2012 09:42 AM

Are US citizens taxed on value of room & board?
 
Is there any taxable income or taxes related to the value of the room and board while working on the ship?

sz June 26th, 2012 02:35 PM

No - Only thing taken out is the 'usual' federal taxes. If you haven't worked long enough to accrue enough social security credits, you might want to look into paying those as the two lines I've worked with didn't take out those.

PS - check out sailortax.com - still can pertain to the cruise industry . ..

Luv2Cruise25 June 26th, 2012 02:44 PM

Thanks again, SZ. I'll check out that website.

Luv2Cruise25 June 26th, 2012 02:49 PM

SZ, have you worked for Carnival? Just wondering if they deducted Social Security.

Bruce Chafkin1 June 27th, 2012 12:12 PM

The Cruise Lines collect only Federal Income Tax from US Citizens working on ships.
US Citizens are required to submit a W-4 form to the cruise line every year.
No Social Security or other fees are collected.

However, if your primary residence is outside the USA, you are tax free for the first $92,000 in earnings every year.

Luv2Cruise25 June 27th, 2012 02:31 PM

Thanks, Bruce. I ran across that $92K exemption. I guess that wouldn't work if you spend your 7-8 week break at home in the States.

I'm actually asking these questions on behalf of my daughter who will be doing Shipboard Accounting on Carnival.

Paul Motter June 27th, 2012 02:35 PM

Funny - back when I worked on ships we just got paid a flat rate every month - no deductions at all.

Bruce Chafkin1 June 29th, 2012 12:24 PM

Quote:

Originally Posted by Luv2Cruise25 (Post 1434652)
Thanks, Bruce. I ran across that $92K exemption. I guess that wouldn't work if you spend your 7-8 week break at home in the States.

I'm actually asking these questions on behalf of my daughter who will be doing Shipboard Accounting on Carnival.

Surprisingly, it does work.

If her Primary residence is outside the USA, she can spend as much time as she likes VISITING the USA. Please check out the IRS definition of a primary residence. So long as she is not living or working in the USA, she is still tax exempt if she lives in another country.

I carry a US Passport. My primary residernce is in China, and I have a second home in Europe. My ship is frequently sailing itineraries that start in the USA. But that does not qualify as working in the USA. My ship has a non-US flag and I am paid in cash by an international company. I rarely visit the USA, but I can - and still retain my tax exemption.

Luv2Cruise25 June 29th, 2012 07:21 PM

Thanks, Bruce. So you think a US citizen working 7 to 8 month contracts and has no residence at all who may or may not visit her parents in Florida during her 7 week vacation would qualify as the foreign worker? Does the ship which may be home ported out of Florida qualify as a foreign residence? i know this is not the place for professional tax advice but this gives me some good information to ask further questions and get clarification.

Bruce Chafkin1 June 29th, 2012 09:40 PM

Quote:

Originally Posted by Luv2Cruise25 (Post 1434998)
Thanks, Bruce. So you think a US citizen working 7 to 8 month contracts and has no residence at all who may or may not visit her parents in Florida during her 7 week vacation would qualify as the foreign worker? Does the ship which may be home ported out of Florida qualify as a foreign residence? i know this is not the place for professional tax advice but this gives me some good information to ask further questions and get clarification.

You should double-check, but I have been advised many times that a cruise ship does not qualify as a residence in the eyes of the IRS.

Many countries (including the USA) insist that you must have a legal residence somewhere. Establishing a legal residence requires rent receipts, bills mailed to that address in your name, residency permit, etc.

Many of my colleagues have established primary residences in countries other than their home countries in order to avoid paying taxes to a country where they do not live or work. The IRS is very clear on what constitutes a primary residence, and it is very important to follow the rules on that subject.

Luv2Cruise25 July 1st, 2012 08:53 PM

Based on what you've said and the research on the topics, it looks like she would still pay income taxes, but would be exempt from Social Security and Medicare tax.

Is that the experience of you U.S. folks?

oceanbound22 July 2nd, 2012 06:39 AM

The US finds every way to collect taxes. Its many many wars are very very costly.


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