Merchant Mariner Tax?
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Hello, I am a Merchant Mariner. During 2009 I went on a couple of foreign voyages and was in foreign ports for a while. I am trying to find out if the Income I earned while physically on the ship in the foreign port(s) is exempt from federal taxes? Thank you!
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Answer:
No, none of that income is exempt from US taxes. If you paid any foreign income taxes on the wages you can claim a credit using Form 1116. To claim the Foreign Earned Income Exclusion you either must have a bona-fide foreign residence for the ENTIRE tax year OR you must be physically present in one or more foreign countries for at least 330 days out of a full 12 month period. Time spent on or over the high seas does not count as time spent in a foreign country.
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Other answers
No. Income earned anywhere in the world is not exempt from U.S. tax merely because of being earned somewhere other than the U.S. Even if you were off the ship and working in a factory in the foreign country, your earnings there would be subject to U.S. tax. Even if you were off the planet and working on a spacecraft, your earnings there would be subject to U.S. tax. The only places where you can avoid any federal tax because of your location are (1) if you are in a combat zone and in the military, or (2) if a treaty between the foreign government and the U.S. government says that you must pay only foreign tax and not U.S. tax (in that situation, you would still have to pay tax on the pay, just not to the U.S. government). To clarify, the combat zone pay exclusion is the only way that you would not have to pay any country's tax on the money, and that exclusion applies only to the U.S. military.
as a US citizen you are taxed on world wide income and as a merchant mariner, you do have some deductions you can use to reduce your taxable income
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