Anyone who has been working in the yachting industry for a decade or more would have noticed that the days of receiving foreign wire transfers with no W-2 or 1099 are becoming less frequent. Many crewmembers are now part of a formal payroll, regardless of the vessel's flag. If you are one of these crewmembers and you do not have a complicated tax situation, you might be surprised at how easy it is to prepare your own tax return. If you are interested in preparing your own tax return, it is important that you research the various solutions before making a software purchase.
Tax software programs are designed to help the average taxpayer accurately prepare and file state and federal income tax returns. If you need extra support, almost all tax software programs are equipped with tools to help you answer common questions regarding your return.
Some tax prep solutions may be better than others, depending on your individual situation. For example, some may find that TurboTax is better for stock investors as opposed to TaxSlayer, which may be preferred by selfemployed individuals.
The common solutions include but are not limited to the following:
Navigation is simple on some of these software programs and many will import data from a prior year tax return. Whenever you selfprepare a tax return, it is important that you carefully review the prior year return as many taxpayers have data that carry over from year to year. It is also important to keep in mind that if you have a basic situation with maybe a single W-2, you might be eligible for a free filing. Free filing solutions can be found on the internal revenue service website at irs.gov.
Although more maritime professionals are being treated as regular employees, there are many more with complicated tax scenarios and these situations may still require the assistance of a professional tax preparer. There are still many crewmembers being paid from foreign corporations with no W-2 or 1099, and many crewmembers are involved in cross-border transactions that may require the filing of complicated information returns that are not always available on some of these tax prep solutions named above.
Please note, we are not endorsing any particular software solution. The purpose of this column is to bring attention to some of the many options available to taxpayers. If at any time you are confronted with a situation that does not lend itself to an easy filing, we recommend you do your research for the appropriate solution.
This article originally ran in the February 2023 issue of Dockwalk.
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