Merchant Mariners


As a professional mariner, I much prefer Taco Tuesday to W-2 Wednesday. Nevertheless, Taxes are due on the 15th and we at Tall Ships America decided to take the time to discuss a few tax-related items before those last-minute filers submit their forms. Please note that TALL SHIPS AMERICA IS NOT LIABLE FOR THE IMPROPER FILING OF YOUR TAXES.

1. Yes, you’re a transient. But you’re still an American. Don’t attend public school anymore? Don’t stay in one place long enough to have a library card? Too young to have any hope of receiving Social Security before it runs out? Don’t use state-maintained highways because you’re always at sea? Hoping that there’s some clause that will expunge you of any tax obligations? My father says, “Too bad – you still have to pay your taxes.” Even if you’re an American working on a vessel in international waters, your earnings are still U.S. income, and must therefore be reported. Sailing in international waters or working on a foreign-flagged vessel does not mean that you are working in a foreign country and does not exempt you from U.S. income taxes. However, mariners paying non-U.S. taxes on that foreign income or mariners earning money while in foreign ports and foreign waters may be eligible for a ‘Foreign Earned Income Exclusion.’ Be warned that the conditions of this clause can be confusing, that many people have been audited for taking this exclusion, and that filing this form incorrectly can be viewed as tax evasion.

2. Deductions, deductions. Most of the time, I spend a few hours counting up every single out-of-pocket expense from the past year only to discover that I should just take the standard deduction. But, for those of you sailors interested in itemizing your every expense, a checklist by Tax Shack Inc or a worksheet created by CPA Martin Kapp may prove useful. Whether traveling to meet a ship, taking a USCG course to raise your credentials, feeding yourself on a day off, or purchasing job-related safety equipment, sailors can accrue a lot of expenses while traveling for work. Just remember that the only eligible items are the ones purchased out-of-pocket (and not reimbursed) – so no claiming those delicious hot meals that the cook provides every day!

3. Home is where the heart is? In 2013, I was hired by five independent companies, sailed on three tall ships and one racing boat, and received W-2s from four different states. It made filing my taxes a little daunting. But when I finally sat down at the computer, TurboTax threw out the most difficult question of all: What is your state of residence? Here are some suggestions from Scuttle or Swim as to how you can answer the question:

  1. When you get off of the vessel, where do you go first?
  2. Where do you own property?
  3. Where have you signed leases?
  4. Where is your family and ties?
  5. Where are your bank accounts, management accounts?
  6. Where are you registered to vote?
  7. Where are your vehicles insured?
  8. Where do you spend your time when you’re not working?

Now, this question is important, because mariners in the foreign, coastwise, intercoastal, interstate, or noncontiguous trade only have to pay state and local taxes in your state of residence, as opposed to your state of employment, and can claim nonresidency in all other states from which you’ve earned money (46 U.S. Code § 11108 – Taxes). According to the IRS, your residency can be anywhere that you intend to call home (and where you are physically present for a significant portion of time, of course). So that answers the legal question.

That said, when it comes to your personal sense of where home is, there’s a different question that I feel more accurately identifies the place I call home: Where do you wash your laundry?

4. Sources. If you still have questions, you might want to read 46 U.S. Code § 11108 – Taxes (see Subtitle II – Vessels and Seamen). Alternatively, some additional sources which may prove useful and/or interesting are below:

http://www.consultantbarry.com/merchant_mariners_qa.pdf

http://scuttleorswim.com/category/merchant-marine-tax-deductions/

http://www.mkappcpa.com/www.sailortax.com/

http://maguiretaxes.com/onward/

http://taxshackinc.com/Seaman.htm

Case of Johnson, Marin I., (2000) 115 TC 210 / Westling, Jim L., (2000) TC Memo 2000-289

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 Coast Guard Press Release 1.29.14

In an effort to rapidly provide medical certificates for mariners sailing internationally, the National Maritime Center (NMC) has recently discovered that some mariners have been issued medical certificates which will expire between January and September 2014. To resolve this issue, the NMC is taking the following action: 

  • In order to mitigate additional obligations for those mariners impacted, the NMC will be issuing a new medical certificate with STCW expiration in 2015. This only applies to mariners whose Merchant Mariner Credential containing STCW endorsements was originally issued during the period of January to September 2012.
  •  Mariners who have medical waivers that have an annual submission requirement will still receive a time-limited medical certificate that corresponds with the appropriate required submission dates.

The NMC wishes to thank those mariners impacted for their patience while their medical certificates are corrected and sent to them. Please call 1-800-IASKNMC (1-800-437-5662) or email IASKNMC@uscg.mil for further information.

To read the press release, click here (PDF)

The US Coast Guard seeks comments on its merchant mariner medical evaluation program and possible alternatives. The Coast Guard is particularly interested in views as to whether it should establish a designated medical examiner program along the lines utilized by the Federal Aviation Administration or the Federal Motor Carrier Safety Administration. Comments should be submitted by 2 May. 78 Fed. Reg. 19725 (April 2, 2013).

Courtesy of Bryant’s Maritime Consulting

A working group of the Merchant Marine Personnel Advisory Committee (MERPAC), sponsored by the US Coast Guard, will meet in Piney Point, Maryland on June 11-15 to discuss Task Statement 76, “Review of Performance Measures (Assessment Criteria)” and Task Statement 77, “Development of Performance Measures (Assessment Criteria)”.

77 Fed. Reg.30304 (May 22, 2012).

A working group of the Merchant Marine Personnel Advisory Committee (MERPAC), sponsored by the US Coast Guard, will meet in Burlingame, California on March 12 to discuss Task Statement 76, entitled “Review of Performance Measures (Assessment Criteria)”. 77 Fed. Reg. 11142 (February 24, 2012).

[Editor’s note] Update 2.28.2012: They will be looking at STCW licensing and assessment

 

The US Coast Guard’s National Maritime Center (NMC) is conducting a Mariner Credentialing Program Customer Satisfaction Survey (PDF). The 12-question survey will provide US mariners with an anonymous method to provide feedback on the NMC’s credentialing process and the customer’s experience. (8/8/11).

The USCG National Maritime Center (NMC) issued its Performance Report for November 2010 illustrating its merchant mariner credential processing for the month. Overall, performance was down slightly from previous months, with the inventory of pending applications increasing and throughput decreasing. Net processing time has remained relatively steady. (12/2/10).

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