How to amend a previous tax return

How to Amend a Tax Return to Claim Investment Management Fees

When you pay on your investment management fees unregistered investment account, the fees are generally tax deductible, Ian. They might be claimed by calling 22100 – additional costs, interest expenses and other expenses. Fees paid for tax-deferred accounts, akin to: tax-free savings accounts (TFSAs) or Registered Retirement Savings Plans (RRSPs) are usually not deductible.

According to the Canada Revenue Agency (CRA), two forms of fees are deductible:

1. “Fees for managing or maintaining your investments”
2. and “Fees, other than commissions, paid for advising on the purchase or sale by the taxpayer of a particular stock or security or for the administration or management of the taxpayer’s stock or securities.”

So the second fee generally features a management fee paid as a percentage of your investment account, but doesn’t include commissions or mutual funds Administrative Expense Ratios (MERs).

Additionally, the fees should be paid to an individual or company whose “principal business is advising others on the purchase or sale of certain stocks or whose principal business involves the administration or management of stocks or securities,” in response to the CRA.

Can you claim past expenses in your tax return for the present yr?

In general, Ian, you may’t claim a receipt from a previous yr on a current tax return – at the least indirectly. It should be claimed for the yr during which it was created.

There are some deductions and/or credits that might be carried forward after reporting in the right yr to be claimed in a future yr, e.g Donate or Capital lossesbut these claims should still be reported for the yr during which they arise.

How to amend a previous tax return

There are 3 ways to regulate a previous value tax declaration You submitted.

1. Submit T1-ADJ, T1 adjustment request to the CRA. This might be done with Business tax softwareor by sending the shape and supporting documents by post to CRA Tax Center that serves your area.
2. Send a signed letter to your tax office requesting the adjustment.
3. login in My accountthe CRA’s secure online service and use the “Modify My Return” option.

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How a few years back are you able to amend your tax return?

The CRA generally accepts one adjustment request for every of the last 10 calendar years, Ian. For example, in 2024 you may request adjustments to your tax return in 2014.

The CRA may accept an adjustment to a previous tax return, but you should submit the request in writing. (Read: Can you file income tax for multiple years at the identical time in Canada?)

What happens in case your adjustment ends in tax liabilities?

If you made an error and/or omission on a previous tax return that might end in tax liability (e.g., not reporting your whole income), you must consider the Voluntary Disclosure Program (VDP).

The VDP is meant to permit taxpayers to voluntarily contact the CRA and proper a previous oversight. The agency grants relief in individual cases provided five conditions are met:

1. You submitted the appliance voluntarily before the CRA took enforcement motion against you or a 3rd party related to you.
2. You have attached all relevant information and documentation to your submission (including any returns, forms and schedules crucial to correct the error or omission).
3. The information you provide is an application or possible imposition of a penalty.
4. Your information is at the least one yr or reporting period overdue.
5. You have indicated payment of the estimated tax owed or requested a payment arrangement (subject to CRA approval).

To make a disclosure under the VDP you should utilize Form RC199, Application for Voluntary Disclosure Program or send a letter to the CRA.

Claiming administration fees in a previous tax return

Your unregistered management fees needs to be tax deductible to you, Ian. If the expenses are from the previous few years, you may definitely request an adjustment from the CRA electronically or in writing.

Read more about Income tax:

• Should you claim your partner in your taxes?
• What the brand new bare trust tax return rules mean for Canadians
• Should you purchase life insurance to repay tax debt within the event of death?
• “Where do we pay income tax if we retire abroad?”

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