Cross-border Banking & US Taxes

 

For anyone who spends time in the US, it's great to be able to go to an ATM machine and take out US cash if you run short.  However, if you spend several months at a time, banking fees and charges for money exchange can really add up.  The Toronto Star recently ran an article on the options for US bank accounts versus a Canadian account in US funds and the same options for credit cards.  Which one is right for you?    The article also discusses buying property in the US.  Check it out.    Just remember, you must keep track of the amount of time that you spend in the US, or you could end up having to pay US income and / or estate taxes.  Check out the US IRS web site for the calculation of the Substantial Presence test as well as the exemptions.  If you own property or other assets in the US, you may have other tax obligations. Please check with an accountant who specializes in this area. Addendum: Dec. 12, 2013 - Check out this article for a simple explanation of when a Canadian would be considered a resident by the US for US tax purposes.

I have a dream

I was at a BBQ last week and as I walked in, I noticed a Get Well Card that everyone was signing - so I asked who it was for. 

One of our friends was just diagnosed with an aggressive form of cancer and was in Princess Margaret Hospital undergoing treatment.  She is too ill to get out of bed - so obviously is not working.  Her husband was recently "downsized", so her self employment income has been supporting her family and it just came to a screeching stop.  Unfortunately, she never got around to purchasing disability or critical illness insurance.  The family is concerned about how they are going to pay their basic bills - let alone additional expenses that will come up because she is ill.

So. I have a dream (two actually):

1.    To wish my friend (any everyone else who is ill) a speedy recovery

2.     To make sure that everyone I come in contact with, reviews their insurance and financial plans, to minimize the risk that you and your family will be at financial risk if the "God Forbid" happens to you.

If you need assistance - give me a call.

 

Family

I recently got together with my 10 cousins (and their spouses) from one side of the family.  While we are all in touch with each other on a regular basis, we couldn’t remember an occasion (since we were teenagers) when we were all in the same room at the same time.    

We had a great long weekend – with a BBQ; exploring Rock City Park – the world’s largest exposure of quartz conglomerate in Oleans, NY; participating in a Murder Mystery aboard the RMS Tyranic in 1912; a visit to the Seneca-Iroquois National Museum; too much food and drink and a generally great time.

If you’re like me, you let life get in the way of the things that are truly important – keeping in touch with friends and family.  The week after I came back from the reunion, I took the time to call several friends who I had not spoken to recently.

So my challenge to each of you as summer gets underway and life slows down – contact at least one person who you haven’t seen or spoken to recently and catch up.

Wishing all of you a great July!

Some pictures from Rock City Park and the area around Allegany, NY where we stayed.

 

Travel Insurance

The following article was published in the April 2013 issue of The Insurance & Investment Journal.  It discusses some of the things that could go wrong when you travel out of your home province and what you need to do to protect yourself.

Build your Business to Sell It – Notes from a Workshop

The AIC Clarity Series: Build your Business to Sell It – a Workshop

May 27, 2013

Led by:

Cheryl Rankin

&

Heather Freed, CFP, CLU, CHS

These are notes from a workshop given at the Association of Independent Consultants on Monday, May 27, 2013.  

What to sell?

If you were to sell your business, what could you sell?  Some businesses are sold as a complete package and others can only sell specific pieces.  Many of these items will also affect the price that you are able to ask for your business.

-          stock (raw or finished product)

-          machines

-          client list (not the business cards, a list that is in Excel or some other format)

-          contact list

-          assets (e.g. bouncy tables)

-          property (e.g. land or buildings)

-          contracts / agreements

-          brand / name / website

-          intellectual property (patents, trademark, service)

-          revenue (1 year) / goodwill

-          book of business (financial  / insurance industries that give you customers and residual income / trailers)

-          phone number

-          process (how to get clients, process, staff – franchise)

-          training program

-          active employees (knowledge)

-          receivables

-          tax losses (special circumstances)

Who to sell to? (Plan)

Even though you may have an idea / plan of who you would like to sell your business to – the plan may not come together so you are best to have other options.

-          children take over

-          children buy it

-          existing management or employees buy it

-          competitor

-          client / customer

-          supplier / vendor

-          investor

-          sell to someone in transition (unemployed and just got a buy out)

-          sell and stay in business as employee or consultant

-          partner buy-out

-          someone buys in as a partner

-          foreign investor

-          immigrant

-          new business owner who does not want to start a business from scratch

In order to make your business sellable, it needs to be able to run without you.

Operating the business without you

The majority of small business owners are the main source of knowledge and work efforts, so if the business owner is not part of the business any more then the business is not as valuable and may not be able to run.  What do you need to do in order to have your business survive a week or a month without you?

-          document all procedures (operations manual / standard operating procedures SOP)

o   it’s not tangible if it’s not documented

o   critical checklists

o   suggestion to systemize everything with post-it notes

-          who can check voicemail and email?

-          list of contacts in one place

-          trained back-up

-          ** passwords** (do not share passwords but have a way to get someone passwords if it becomes necessary)

-          rotate employees in different positions

-          financial access – make sure someone else has access

-          virtual assistant / bookkeeper

-          list of current projects

-          signing authority (with appropriate restrictions)

-          key dates / key actions

-          assessment of existing employees and what they can / should be doing

-          communication plan

-          do a test run

-          buy to see the process through financial records / plans

Next step(s)

What do you plan to do to take your business a step forward to making it more sellable?  Here are some of the steps that AIC attendees stated that they need to take for their business to move forwards and make it more sellable.

-          Document client services procedures

-          Document business procedures

-          E-Myth  by Michael Gerber (book)

-          Bring contact list up to date

-          Keep task list up to date

-          Passwords

-          Clone themselves

-          Automate

-          Create systems

-          Document “what I do”

-          Set guidelines / restrictions for coverage

-          Key list of contacts – suppliers / partners

-          Get organized

-          Practice running the business from Florida (run itself)

-          Power of attorney

-          Signing authority (phone bill example)

-          Client list

-          Train / hire a consultant

-          Passwords – only if necessary

Travel Insurance - do you need it?

Vacation season is fast approaching and with it, comes the question – “Do I need to purchase travel insurance?” The simple answer is if you are travelling outside of Ontario, OHIP may not provide adequate coverage. For example, Cuba now requires proof of private Emergency Medical Insurance coverage before you can enter the country.

Travel insurance comes two ways – Emergency Medical only or Complete coverage that includes coverage if your bags are lost, you need to cancel the trip due to a medical emergency, the plane is delayed and you miss your connection to the cruise ship, as well as the Emergency Medical coverage.

If you are enrolled in a group benefits plan, you may have emergency medical coverage already – check your booklet. Similarly, it may be included on your Premium Credit Card (normally only if you are under age 65).

Should you need to purchase coverage for your trip, make sure to answer all medical questions completely. Most individual plans will not cover pre-existing conditions if they are not stable prior to your trip and may not provide any coverage (even unrelated) if you do not answer all questions fully.

So, if you’re travelling outside of Ontario this summer, talk to a lisenced insurance gent prior to your trip.

For more information, to help you decide if you need to buy Emergency medical travel insurance – check out these articles in the Toronto Star:

• Getting Sick in the States
• Protect yourself with a travel health insurance policy

10 Ways to Save Money

They say that if you continue to do the same thing the same way over again, you will end up with the same results.  

Here are 10 ways to save money or to get "free" money that you should consider. 

1. The 24-hour rule - Fight impulse purchases by waiting 24 hours before you buy it.

2. Comparison shop - I just purchased a new Toaster 

Oven and let my "fingers do the walking" on my computer before heading out.  I purchased the unit on sale for less than half price versus other stores and comparable units. 

3. Bundling - Bundling services gives the service provider more business in return for a better deal for you. So bring multiple services to your bank or cable company and negotiate. (I did recently and saved 30% on my cable, internet and cell phone.)

4. Pay bills on time: Paying late fees is a waste of money.

5. Use your perks: Your employer or association may offer perks or discounts. Check them out. But know your prices,sometimes you can do better on your own.

6. RRSP matching from your employer, RESP Grants, etc- Always take free money.

7. Shop with a list - the longer you spend in the grocery store, the more you spend

8. Borrow and share - for items that you only use occasionally, borrow, rent or check Kijiji or Craigslist.

9. Cut your energy usage - Turn off the lights, turn down the thermostat and don't wash your clothes or dishes during peak usage hours.

10. Weekly mortgage - If you pay your mortgage monthly, consider going bi-weekly or weekly. It shaves time and money off of your mortgage payments.