Taxes and the Liveaboard

[kptmorgan04]

Does anyone know about filing as a "Non-Resident" of a state?
My mailing address is in NJ, at my parents owned home.
I work offshore every other month in the Gulf of Mexico and for most of the month I am off of work I am full time cruising. The boat is registered in NJ, but not kept there or anywhere for that matter.

[artbyjody]

Originally Posted by kptmorgan04

Does anyone know about filing as a "Non-Resident" of a state?
My mailing address is in NJ, at my parents owned home.
I work offshore every other month in the Gulf of Mexico and for most of the month I am off of work I am full time cruising. The boat is registered in NJ, but not kept there or anywhere for that matter.

Most full time RVers use TX as their state of residence due to the laws of the land there.. most of it has to do with the liberal exclusion of tax policies but do not quote me -

[hellosailor]

Contact the NJ tax authorities to find out what they will do if the IRS reports that you are using a NJ address and have no other residence or domicile on file. NJ may declare you to be a resident and have to pay taxes as one. Then they seize your assets and freeze your accounts and give you the chance to prove otherwise in tax court--until which time, things stay frozen to pay for their assessment of your taxes. (Pretty much all tax departments work that way.)

Not a lawyer nor an accountant, not authorized to give tax advice or even to play a tax advisor on TV. Just commenting on what I've seen, and been told by the folks who do have those credentials.

[kptmorgan04]

Thanks... that is what I was guessing, being that someone wants my money. I submitted the question to H&R Block after reading this description of resident and non-resident status from their website:

"Full-year resident: Generally, you're a full-year resident of the state where you maintain a permanent home for the entire year. This is true even if you leave the state temporarily but intend to return. If you maintain a home in more than one state, these are some questions to consider in determining where your permanent home is:
Where do you spend the most time?
Where do maintain your primary bank accounts?
Where are items that have significant sentimental value kept?
Where are your employment / business connections?
Where are your close family ties?
Where are you registered to vote?
Where do you maintain a driver's license?
Part-year resident: You're a part-year resident of a state if you move into or out of a state during the year, establish a new permanent home, and do not intend to return to your prior permanent home. Part-year residents are taxed on income from all sources during their period of residency.

Nonresident: You're a nonresident of a state if you did not live in the state at any time during the year or you lived in the state on a temporary or transitory basis. Nonresidents are taxed only on the income derived from that state. Types of income that are taxable to nonresidents include:
Wage income (see reciprocity agreements below)
Trade of business income
Rental income
Farm income
Income from the sale of real property
*Interest and dividend income is not taxable unless related to a trade or business.

If you earned income in Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming, no tax return is required. These states do not have an income tax. "

[hellosailor]

"Hailing from Stone Harbor, NJ"
That by itself might be enough to have you declared a resident of NJ, since it implies that you are permanently and primarily based out of that harbor.

Taxmen don't believe in vagabonds.

[petegingras]

Shack,

you're on to something there, and yes you're free to "claim" the portion of the boat/domicile that is dedicated to a legitimate business, and you're correct regarding the %, and yes the % applies to electricity, docking, wireless costs, etc.

The standard for the IRS regarding home office is that the portion of the home office must be dedicated to the office, they draw the line, literally with a bed, or in our cases berth, as in V-berth. There is a longstanding ruling that a bed in a home office will disqualify the home office deduction, as it’s not dedicated “totally” to, and thus lost as a home portion if you can birth a human there. I’m not aware of an IRS audit on a live-aboard vessel but be aware there will be a protest of the claim if there’s bedding on that berth.

An IRS audit is not big deal if you’re above board, and stick to your assertions that it’s 1) legitimately a business, and 2) you’ve lost the use of the V-berth due to those business activites.