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Claim your investment fees on your tax return

          

One tax deduction that is easily overlooked is called “carrying charges and interest expenses.” Carrying charges are expenses you incur for the purpose of earning investment income, although only expenses for non-registered accounts qualify.

You can report carrying charges and interest expenses on the Federal Worksheet in all provinces except Quebec. For Quebec, report your carrying charges on Schedule N.

What investment fees are tax deductible?

Carrying charges include fees to manage or take care of your investments; and fees for certain investment advice1 or for recording investment income.

Are RRSP management fees tax deductible?

No, you can’t claim carrying fees for any registered accounts, meaning RRSPs, registered retirement income funds, registered pension plans, segregated funds or tax-free savings accounts.

Are financial planning fees tax deductible?

Amounts paid for financial planning are generally not tax deductible. These include fees paid to an advice-only financial planner (i.e., one who doesn’t deal in specific investments). However, if you paid fees on a fee-based investment account that includes financial planning, the fees are generally tax deductible.

What about mutual fund management fees or stock purchases?

Mutual fund management fees are tax deductible in non-registered accounts, but commissions or trading fees to buy stocks and other investments are not tax deductible.

Are fees to complete my income tax return tax deductible?

If you have someone complete your tax return, the fees are tax deductible only if all of the following apply:

  • you have income from a business or property
  • accounting is a usual part of the operations of your business or property
  • you did not use the amounts claimed to reduce the business or property income you reported

Are you an MD Financial Management client with a non-registered account?

MD ExO® Direct

If you invest using this digital platform, the management fees are tax deductible in a non-registered account. You can find these fees in the “Account activity” section of your statements.

MD PlusTM account

The quarterly management and administration fee on your MD Plus account is tax deductible when incurred in a non-registered account. You can find your total fee for the year on your December statement. Note that if you hold 100% of your MD assets in an MD Plus account, you’ll have access to financial planning services free of charge.

MD Private Investment Counsel

If you are an MD Private Investment Counsel client, you can find your management fees for the year in your 2020 tax reporting package. Simply go to “Statement of fees charged to your account” and look for “Fees incurred.” Remember that management fees are only tax deductible when incurred in non-registered accounts.

Talk to a tax professional to ensure you’re taking advantage of all the tax deductions and credits available to you. For personalized financial planning advice, contact your MD Advisor*.

* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.

1 Specifically, the CRA says these are fees “paid for advice on buying or selling a specific share or security by the taxpayer or for the administration or the management of the shares or securities of the taxpayer. The fees must be paid to a person whose principal business is advising others whether to buy or sell specific shares or whose principal business includes the administration or management of shares or securities.”

The above information should not be construed as offering specific financial, investment, foreign or domestic taxation, legal, accounting or similar professional advice nor is it intended to replace the advice of independent tax, accounting or legal professionals.