The Canada Revenue Agency has an extensive list of carrying charges and interest you paid to earn income from investments. These fees can be claimed on your tax return on Line 22100 – Carrying Charges and Interest Expenses. Eligible expenses may include legal fees for support payments, fees for preparing your income tax return and management fees for your investments if you qualify.
Carrying Charges and Interest Expenses You Can Claim
You can claim the following carrying charges and interest you paid to earn income from investments:
- Fees to manage or take care of your unregistered investments. Fees you paid for services in connection with your Pooled Registered Pension Plan (PRPP), Registered Retirement Income Fund (RRIF), Registered Retirement Savings Plan (RRSP), or Tax-Free Savings Account (TFSA) do not qualify as these are “Registered Investments”.
- Fees for certain investment advice or for recording investment income. This CRA document explains in greater detail the qualifications: Interpretation Bulletin IT238R2 – Fees paid to investment counsel.
- Fees to have someone complete your Income Tax Return but only if you have income from a business or property, if accounting is a usual part of the operations of your business or property, and you did not use the amounts claimed to reduce the business or property income you reported.
For example, if you already claimed your tax preparation fees on your T2125 – Statement of Business Activities as an expense, you cannot claim them again on Line 22100. See Interpretation Bulletin IT-99, Legal and Accounting Fees for further explanation.
- Most interest you pay on money you borrow for investment purposes can be claimed, but generally only if you use it to try to earn investment income, including interest and dividends. If the only earnings your investment can produce are capital gains, you cannot claim the interest you paid as a carrying charge.
- If you incurred legal fees relating to support payments that your current or former spouse/common-law partner, or the natural parent of your child, will have to pay to you, you can claim these fees.
Carrying Charges and Interest Expenses You Cannot Claim
The following cannot be claimed as carrying charges and interest expenses on your tax return:
- Your student loan interest. This can be claimed on Line 31900 – Interest Paid on Your Student Loans instead.
- Any subscription fees you paid towards financial magazines, newsletters or newspapers.
- Any interest paid on money you borrowed for contributions to your Pooled Registered Pension Plan (PRPP), Registered Retirement Income Fund (RRIF), Registered Retirement Savings Plan (RRSP), or Tax-Free Savings Account (TFSA).
- Any commission or brokerage fees paid from buying or selling securities. These expenses are used when calculating your Capital Gains and Losses.
- Any legal fees paid to your lawyer for a divorce or separation agreement or to obtain custody of your child.
What Edition of TurboTax Is Right for Me?
Whether business income, investments or capital gains, TurboTax has the right software for you Answer a few simple questions on our product recommender and we can help guide you to the right edition that will reflect your individual circumstances.
You can always start your return in TurboTax Free, and if you feel the need for additional assistance, you can upgrade to any of our paid editions or get live help from an expert with our Assist & Review or Full Service*. But don’t worry, while using the online version of the software when you choose to upgrade, your information is instantly carried over so you can pick up right where you left off.
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