Hmmm…frost on the car this week, geese gathering and fattening up…sure signs of fall. That must also mean that the Snowbirds are getting ready to flock off south.
If you are one of those people fortunate enough to spend some of your winter in warmer climates, here are a few tips and suggestions.
Obviously, you already have your travel health insurance in place, as it would be foolhardy to travel to the excited states, land of private medical care and multimillionaire doctors, without a full medical jacket to protect you in the event of illness or accident.
Over the summer, I spoke with several people who had the “opportunity” to experience the medical system in the US firsthand. While all were highly complimentary of the service they received, nobody got off with a bill for less than $10,000, no matter how minor the ailment.
Don’t travel unprotected.
Check your dates
Remember that you are present in the US on a B-2 visitor’s visa. (You don’t have to apply for this, but that’s your actual status.) This only allows you to be in the US 183 days or less per year, or you may become a deemed resident, and be required to file a US income tax return.
With last year’s late spring, many people stayed longer than usual, and could therefore run afoul of this.
Also note that if you spend roughly 121 days per year in the US, you may have a “substantial presence”, and need to file IRS Form 8840, the “Closer Connection Exception Statement for Aliens”, to prove you have a closer connection to Canada than the US. This avoids the request for a tax return, and preserves other privileges you have a visitor.
The deadline to file this form is June 15 each year. Let me know if you need the details, and we will send you an article on this.
As of June 30, 2014, the two border services are collecting and sharing personal biographical data, so there’s no more fudging on the number of days.
Terry Ritchie, co-author of The Canadian Snowbird in America (ECW Press), has a great suggestion to avoid any concerns at the border with regard to residency status.
The kit includes required basics like your passport and any other travel documents, but Mr. Ritchie also suggests copies of most recent Canadian tax return or notice of assessment, a utility bill showing your home address in Canada and proof of ownership of property in Canada, if available.
These would provide very good proof to an overzealous border official that you really do reside in Canada, notwithstanding the fact that you are heading south to spend three or four months in a warm state. This can also be important on the way home.
I know you’ve taken my advice in the past, and always tried to hedge your travel money needs by holding US dollars, and exchanging more when the Canadian dollar is relatively high. That means you’re not concerned about currency fluctuations, or with the fact that the Canadian dollar is currently down around $.89.
However, if you missed the boat on such transfers, and you are heading south without any US dollars, I’d recommend exchanging at least half of your needs at this point, assuming you have the money available. You will at least be half right, instead of all wrong.
If you have purchased real estate in the US or plan to do so, that opens another series of complications on which you should definitely get specialized, expert advice. Renting out such a property immediately puts you in a different category and properties with substantial value could also make you eligible for US estate taxes.
It’s always something…
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Dollars and Sense is meant as an introduction to this topic and should not in any way be construed as a replacement for personalized professional advice.
Please consult legal, tax and investment experts for advice on your unique situation.
David Christianson, BA, CFP, R.F.P., TEP, CIMis a financial planner and advisor with Christianson Wealth Advisors, a Vice President with National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.