Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
I am trying to do my daughter's taxes. She earned income on a cruise ship in international waters. Her W2 shows her income and federal tax withheld, but no social security or medicare withheld. I called the American company that employed her to ask why and was told to consult a tax attorney. Supposedly, because the income was earned in international waters, she does not owe any federal or state taxes, social security or medicare on this income. No state tax was reported or withheld. I asked why they withheld any federal tax and was told that they were required to withhold those taxes.
I called the IRS and was told that she owed federal taxes, and her portion of social security and medicare. Because she was given a W2 instead of a 1098, she was not considered self-employed (which she was not).
Does anyone know any regulations that would support her not paying federal taxes, social security and medicare? She is an American citizen and the employment lasted 6 months.
Thanks for any help you can give me.
WithaT
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.