Are You an Alberta Snowbird Navigating Through U.S. Financial Territory?
One of the joys of retirement is the freedom to travel. Several of Alberta’s native’s enjoy the Snowbird lifestyle, flying south to America during Canada’s cold winter months. Before you pack your bags and take flight here are some tips to help you keep your money in your pocket and away from America’s Uncle Sam.
U.S. Tax Returns
If your average stay in the U.S. is less than 122 days per year then you have nothing to worry about. Remember to always keep documentation of when you leave and arrive in Canada. Also having documentation on your residence here in Alberta is a good idea to show boarder officials if they question what country you call home. Sometimes the maple leaf flag on your hat is not enough.
If you have overstayed your 122 days in the U.S. this is enough to make you a “resident alien.” To avoid having file income taxes in the U.S. submit IRS Form 8840. This form states you are a Canadian resident and pay taxes in your home country. For all tax matters we always suggest consulting with your professional financial advisor.
U.S. Estate Tax
If you own a vacation home in the U.S. or you directly own U.S. Stocks with a total value of more than $60,000 dollars your executor will have to file a U.S. Estate tax return upon your death. As the U.S Government is set to make changes to estate tax laws in 2013, it is possible that many snowbirds who own American property could see costly estate tax increases when they die. Keep this in mind when planning your final will and testament to help your loved ones pay for unplanned expenses when you pass.
92% of all Canadians who travel as Snowbirds to the U.S. purchase medical travel insurance. With the average cost of staying the night in a U.S. hospital exceeding $1,500 this purchase is a no brainier. In comparison most Canadian health insurance plans cover $75-$400 a day for a hospital stay. So an uninsured snowbird could expect to be paying the difference of $1,000 or more out of pocket.
To Sum It Up
Being able to fly south for the winter is a great luxury, but make sure you are financially prepared before you go. If you have any questions about the financial impact of your winter vacations in America please call Alpine Insurance or McClary Financial.
Article Source: The StarPhoenix, Snowbirds should fly home after 121 days, by Terry Mcbride, November 5,2012
Alpine Insurance & Financial Inc. – Alberta’s Trusted Advisors
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