Snowbirds US Tax Return
Do you travel to the US for the winter for long periods of time? If so, you may need to file an exception to filing a US tax return that is due June 15 each year.
If you don’t want to face some possible penalties, you may need to file a form called the Closer Connection Exception Statement for Aliens, IRS form 8840.
Many people think that if you spend less than 180 days in the US, you do not need to file. But that is not completely correct. It depends on how many days you spent in the US in the past three calendar years. If you spent more than 121 days in each of the past three years (2023, 2022, and 2021) you should be filing for an exception.
Closer ties to Canada
The exception acknowledges that you had a significant presence in the US, but that you have closer ties to Canada.
Here’s how the formula works: calculate the number of days you were in the US in 2023 (for some snowbirds that is often January to March or April and sometimes November and December). Then calculate the number of days for 2022 and for 2021.
It may be easier to record each winter season first: October 2023 to April 2024, October 2022 to April 2023, October 2021 to April 2022, and October 2020 to April 2021. Then look at the actual dates for each calendar year.
Rember to add any additional days you went to the US the rest of the year. Do you go for a few days in the summer? To Fargo or Grand Forks or Minneapolis? Add those days too!
You need to file for an exception if you are considered to have a “substantial presence” in the US in the past three years. If it exceeds a total 182 days, you need to file.
The formula to calculate the days
The formula works like this: you include all the days in 2023, one third of the days in 2022 and one sixth of the number of days in 2021.
You are close to the 183 days if you spent 121 days in each of the three years (2023 – 121 days; 2022 is 40 days (1/3 of 121) and 2021 is 20 days (1/6 of 121). That totals 181. You are very close to having to file; remember the magic number is 183 days.
Why has this not been a big deal in the past? Well, it was harder for the US government to keep track of you. Remember we could cross the border with just our driver’s license and birth certificate. Now we need our passports. And don’t you think they are keeping track of when you came into the country and when you leave??
So, if you think you might qualify as having a “substantial presence” in the US, better get that form completed. You can find it on the US taxation (IRS) website: www.irs.gov/pub/irs-pdf/f8840.pdf
If you don’t have access to the internet, or you need some help, give me a call or drop by our office.
June 17 2024 Self Employed tax filing deadline
Final reminder to those of you that are self-employed. The filing tax deadline for us is June 17 (June 15 is a Saturday) to avoid any penalties. Of course, the interest on what we owed started accruing on April 30, and at an interest rate of 10% interest. So, get your tax information in soon. I still need to get mine filed before June 15 after I get everyone else’s looked after first!
Anni Markmann is a Personal Income Tax Professional and Certified Financial
Planner; living, working, and volunteering in our community. Contact Ste
Anne Tax Service at 204.422.6631 (phone or text!) or 36 Dawson Road in
Ste Anne (near Co-op) or info@sataxes.ca