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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 577
Experience:  10 years experience
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PHYSICIAN NEARING RETIREMENT AGE AND WISH TO CONSIDER BEING

Customer Question

I AM A PHYSICIAN NEARING RETIREMENT AGE AND WISH TO CONSIDER BEING PHYSICIAN ON A CRUISE SHIP. IF THAT VESSEL IS FOREIGN FLAGGED, AM I CONSIDERED AN EMPLOYEE IN A SOVEREIGN FOREIGN COUNTRY? SUBJECT TO FOREIGN INCOME TAX EXCLUSION?
WHAT IF I AM CONCURRENTLY RECEIVING SOCIAL SECURITY AFTER RETIREMENT?
Submitted: 4 months ago.
Category: Tax
Expert:  Mark Taylor replied 4 months ago.

Hi, my name is Mark, I will be happy to help you with your questions.

Expert:  Mark Taylor replied 4 months ago.

Please give me a moment, I am looking into your questions. If you are working and receiving Social Security than a portion of your Social Security income will be taxable (85%).

Expert:  Mark Taylor replied 4 months ago.

Income earned while working in international waters is not considered foreign income so it would not be eligible for the foreign income exclusion. However, income earned while docked in port, or traveling in waters that belong to a foreign country will qualify for the exclusion. You would need to allocate how much was earned while on port or in a countries sea, and how much was earned on international waters.

Customer: replied 4 months ago.
WHAT PROPORTION OF MY CRUISE SHIP EARNINGS ON FOREIGN FLAGGED VESSEL IS TAXABLE? POTENTIAL ANNUAL EARNINGS 130k. MORE LIKELY 70k.
Expert:  Mark Taylor replied 4 months ago.

What country is the ship out of? What is the country of the employer?

Customer: replied 4 months ago.
DO I HAVE TO BE EMBARKED FOR 365 DAYS, AND/OR HAVE NO US DOMICILE TO CLAIM THIS FOREIGN INCOME BENEFIT?SHIP IS TYPICALLY MALTA, OR LIBERIA, OR SCANDINAVIA. LARGE COMMERCIAL CRUISE LINE SUCH AS CARNIVAL.
Expert:  Mark Taylor replied 4 months ago.

If the ship has no nexus to the US. I would expect that this would all be considered foreign income.

Expert:  Mark Taylor replied 4 months ago.

You would need to live abroad 330 days during a 12 month period. Are you a citizen of another country besides the US?