Working while liveaboard and filing taxes?

[KingGuppy]

Originally Posted by Shrew

The standard deduction in 2021 is $25,100 for married taxpayers filing jointly in the US.

I have worked from home for 15 years. I haven't been able to get my deductions, mortgage interest, boat loan interest and my entire office expenses to exceed he standard deduction in years.

How much over the standard deduction does your itemized deductions go?

The other side to deducting a home office is the capital gains tax you pay on that percentage of the property when you sell it. If you're home office is 15% of your property, you get to pay taxes on that 15% of the sale price of the property as a capital gains tax. Hopefully the returns from the itemized deduction exceeds the tax bill.

After all, if the standardized deduction is $25,100 and you itemize a deduction of $27,000. You're not saving the $1,900. Your saving paying the taxes on $1,900 (about $600 @ 32%). Sell a house for $300K, that 15% of office now translates to roughly $45,000 subject to a capital gains (%15 or roughly $6,750). It'll take you 11 years to reach the ROI of the capital gains based on the savings of the office deductions.

You can only pay taxes to one state. It will either be the state you work in or the state you live in, but it can't be both. If you choose to live in a state that doesn't have an income tax, but work in a state that does, or vice versa, the state that charges income tax will levy the tax since you're not paying in the other state. I lived in NH my entire life. I worked in Massachusetts for over 20 years. I paid Mass income taxes because NH didn't levy an income tax. That is simply how it works.

You're going to need drivers license. This typically requires that you declare residency in that state. Consider that if you choose to declare a non income state (NH, FL, etc) for residency and license purposes.

Tons of great info here. Thank you for taking the time to write it.

Do I need a physical address to officially live in Florida? or does a UPS store mailbox suffice for that?

[Montanan]

Originally Posted by KingGuppy

Appreciate all the advice here. I believe my main question was answered, but you guys brought up another interesting one.

As for deductions for living/working aboard, it seems unlikely. Maybe a "home office" in a cabin, but that's doubtful, and we don't want to risk it.

But now im wondering about the working from Bahamas and not having real address in Florida if we were to sell our home. We had planned on get a UPS address that our mail would go to, and I thought I'd just continue paying taxes as if I was a Florida resident. Is this not the case?

We plan on cruising florida/bahamas for most of the year, and then heading north for the hurricane months.

Bahamian residents don’t pay income tax, capital gains tax, or inheritance tax. Residency can be obtained by purchasing a property in the Bahamas.

As to Florida

You are considered a Florida resident …
when your true, fixed, and permanent home and principal establishment is in Florida. Filing a
declaration of domicile, qualifying for homestead exemption, or registering to vote in Florida can
establish residency. Other actions, such as obtaining a Florida driver’s license, only indicate the
intent to establish residency

196.015 Permanent residency; factual determination by property appraiser.—Intention to establish a permanent residence in this state is a factual determination to be made, in the first instance, by the property appraiser. Although any one factor is not conclusive of the establishment or nonestablishment of permanent residence, the following are relevant factors that may be considered by the property appraiser in making his or her determination as to the intent of a person claiming a homestead exemption to establish a permanent residence in this state:
(1) A formal declaration of domicile by the applicant recorded in the public records of the county in which the exemption is being sought.
(2) Evidence of the location where the applicant’s dependent children are registered for school.
(3) The place of employment of the applicant.
(4) The previous permanent residency by the applicant in a state other than Florida or in another country and the date non-Florida residency was terminated.
(5) Proof of voter registration in this state with the voter information card address of the applicant, or other official correspondence from the supervisor of elections providing proof of voter registration, matching the address of the physical location where the exemption is being sought.
(6) A valid Florida driver’s license issued under s. 322.18 or a valid Florida identification card issued under s. 322.051 and evidence of relinquishment of driver’s licenses from any other states.
(7) Issuance of a Florida license tag on any motor vehicle owned by the applicant.
(8) The address as listed on federal income tax returns filed by the applicant.
(9) The location where the applicant’s bank statements and checking accounts are registered.
(10) Proof of payment for utilities at the property for which permanent residency is being claimed.
History.—s. 2, ch. 81-219; s. 990, ch. 95-147; s. 8, ch. 2006-312; s. 3, ch. 2009-135.

THE BAHAMAS
The Bahamas has no income tax, choosing to earn its money from tourism instead. Residents of the Bahamas pay zero tax on the money they earn anywhere in the world, inside or outside of the Bahamas.

You can enter The Bahamas as a visitor and then apply for either temporary or permanent residence within two months of your arrival.

A renewable annual residence permit will cost you $1,000 each year. And even though it is not officially required, it is beneficial to have a home on the island to get approved.

After 20 years of temporary residence, you can apply for a permanent residence permit, OR you can speed up the process and get your permanent resident status right off the bat by investing at least $750,000 in real estate or a business that will create at least one local job.

If you would like to fast-track your application to get a guaranteed response from the Bahamas Immigration Department within 21 days, you can increase the investment amount to $1.5 million and pay a one-time fee of $10,000.

Then, if you have chosen to purchase a home on the island, you will be issued a Home Owner’s Card on an annual basis that allows you, your spouse, and any minor children to live in the Bahamas.

THE BRITISH VIRGIN ISLANDS
We joke around Nomad HQ that BVI is made up entirely of sexy, sophisticated words: “British”, “Virgin”, and “Islands”.

This British overseas territory applies no income tax, capital gains tax, inheritance or gift taxes, land or housing taxes, wealth tax, sales tax, or VAT.

While getting a work permit in the BVI can be a rather bureaucratic process, obtaining a residence visa as a self-sufficient person is quite easy and can be obtained in less than a month in most cases.

[redneckrob]

Originally Posted by Montanan

Bahamian residents don’t pay income tax, capital gains tax, or inheritance tax. Residency can be obtained by purchasing a property in the Bahamas.

As to Florida

You are considered a Florida resident …
when your true, fixed, and permanent home and principal establishment is in Florida. Filing a
declaration of domicile, qualifying for homestead exemption, or registering to vote in Florida can
establish residency. Other actions, such as obtaining a Florida driver’s license, only indicate the
intent to establish residency

196.015 Permanent residency; factual determination by property appraiser.—Intention to establish a permanent residence in this state is a factual determination to be made, in the first instance, by the property appraiser. Although any one factor is not conclusive of the establishment or nonestablishment of permanent residence, the following are relevant factors that may be considered by the property appraiser in making his or her determination as to the intent of a person claiming a homestead exemption to establish a permanent residence in this state:
(1) A formal declaration of domicile by the applicant recorded in the public records of the county in which the exemption is being sought.
(2) Evidence of the location where the applicant’s dependent children are registered for school.
(3) The place of employment of the applicant.
(4) The previous permanent residency by the applicant in a state other than Florida or in another country and the date non-Florida residency was terminated.
(5) Proof of voter registration in this state with the voter information card address of the applicant, or other official correspondence from the supervisor of elections providing proof of voter registration, matching the address of the physical location where the exemption is being sought.
(6) A valid Florida driver’s license issued under s. 322.18 or a valid Florida identification card issued under s. 322.051 and evidence of relinquishment of driver’s licenses from any other states.
(7) Issuance of a Florida license tag on any motor vehicle owned by the applicant.
(8) The address as listed on federal income tax returns filed by the applicant.
(9) The location where the applicant’s bank statements and checking accounts are registered.
(10) Proof of payment for utilities at the property for which permanent residency is being claimed.
History.—s. 2, ch. 81-219; s. 990, ch. 95-147; s. 8, ch. 2006-312; s. 3, ch. 2009-135.

THE BAHAMAS
The Bahamas has no income tax, choosing to earn its money from tourism instead. Residents of the Bahamas pay zero tax on the money they earn anywhere in the world, inside or outside of the Bahamas.

You can enter The Bahamas as a visitor and then apply for either temporary or permanent residence within two months of your arrival.

A renewable annual residence permit will cost you $1,000 each year. And even though it is not officially required, it is beneficial to have a home on the island to get approved.

After 20 years of temporary residence, you can apply for a permanent residence permit, OR you can speed up the process and get your permanent resident status right off the bat by investing at least $750,000 in real estate or a business that will create at least one local job.

If you would like to fast-track your application to get a guaranteed response from the Bahamas Immigration Department within 21 days, you can increase the investment amount to $1.5 million and pay a one-time fee of $10,000.

Then, if you have chosen to purchase a home on the island, you will be issued a Home Owner’s Card on an annual basis that allows you, your spouse, and any minor children to live in the Bahamas.

THE BRITISH VIRGIN ISLANDS
We joke around Nomad HQ that BVI is made up entirely of sexy, sophisticated words: “British”, “Virgin”, and “Islands”.

This British overseas territory applies no income tax, capital gains tax, inheritance or gift taxes, land or housing taxes, wealth tax, sales tax, or VAT.

While getting a work permit in the BVI can be a rather bureaucratic process, obtaining a residence visa as a self-sufficient person is quite easy and can be obtained in less than a month in most cases.

Pretty sure the Home Owners permit doesn't allow you to work. However I know for sure the permeant residency does. It just takes a looooong time to get. And keep in mind, that while the Bahamas doesn't have an income tax, as a U.S. citizen your worldwide income is taxed so you would still be liable for federal tax if you were in the Bahamas. The only exceptions, interestingly enough, are Puerto Rico and the USVI in certain narrow circumstances.