[ooka]

I am a Dutch national and will start working on a cruise ship (sailing under the Bermuda flag) 6 months/year. The other 6 months I will be living in California using a B2 visa.

First I like to make sure I understood things well. As I understand it:
- I will meet the Substantial Presence test in 2014 (because I already spend some time this year in the US and will spent 6 months in the US in 2014)
- Therefore I will have to pays taxes - even though the source of my income is non-US. I cannot claim an exemption based on double taxes, because Bermuda does not collect the taxes in this case.
- Although my employer is UK based and my bank account is in the Netherlands, it would be impossible not to declare my income in the US, since it is easy for the IRS to find out a) how much time I have spent in the US and 2) what my income is

Is the above correct?

What is completely unclear to me is whether I need to pay for medicare and social security. Please enlighten me!

[AtlantaTaxExpert]

Until you actually meet the Substantial Presence Test, the cruise income is NOT subject to U.S. taxes of any type because it is NOT U.S.-sourced.

Only AFTER the Substantial Presence Test is met does the income become taxable, so you should be okay for 2013, with NO U.S. taxes of any type owed.

For 2014, you will file a dual-status return and pay federal and California income taxes on world-wide income. However, since the income is earned while OUTSIDE U.S. borders, no FICA (Social Security ans Medicare) taxes will be due in 2014.

If you retain the job in 2015, you will begin filing as a resident of the U.S. under the Continuous Presence policy, and eventually the IRS would require you to pay self-employment tax on the cruise income to replace the FICA tax.