How to change a past tax return

I have non-registered investment management fees from 2021 and 2022 that were not claimed on my returns for those years. Can they be deducted on my 2023 return? If not, is there another way to utilize those deductions now? —Ian

How to change a tax filing to claim investment management fees

If you pay investment management fees for your non-registered investment account, the fees are generally tax deductible, Ian. They can be claimed on line 22100—carrying charges, interest expenses and other expenses. Fees paid for tax-preferred accounts like tax-free savings accounts (TFSAs) or registered retirement savings plans (RRSPs) are not deductible.

According to the Canada Revenue Agency (CRA), two types of fees are eligible to deduct:

1. “fees to manage or take care of your investments,”
2. and “fees, other than commissions, 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.”

So, the second one would generally include a management fee paid as a percentage of your investment account, but not commissions or mutual fund management expense ratios (MERs).

In addition, the fees must be paid to a person or a company 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,” according to the CRA.

Can you claim a past expense on your current year’s tax return?

You generally cannot claim a receipt from a previous year on a current tax filing, Ian—at least not directly. It should be claimed for the year in which it was incurred.

There are some deductions and/or credits that can be carried forward after reporting them in the correct year to claim in a future year, like donations or capital losses, but these claims should still be reported for the year they arise.

How to amend a previous tax return

There are three ways you can adjust a previous tax return you filed.

1. Submit a T1-ADJ, T1 Adjustment Request to the CRA. This can be done using commercial tax software, or by mailing the form and supporting documents to the CRA tax centre that serves your area.
2. Send a letter signed by you to your tax centre requesting the adjustment.
3. Log into My Account, the CRA’s secure online service, and use the “change my return” option

How many years back can you go to change your tax return?

The CRA will generally accept an adjustment request for any of the previous 10 calendar years, Ian. For example, in 2024, you can request adjustments to your tax returns as far back as 2014.

The CRA may accept an adjustment to an earlier tax return, but you must submit the request in writing.

What if your adjustment results in tax owing?

If you made an error and/or omission to a previous tax return that may result in tax owing—for example, you didn’t report all your income—you may want to consider the Voluntary Disclosure Program (VDP).

The VDP is meant for taxpayers to voluntarily come forward to the CRA and fix a past oversight. The agency grants relief on a case-by-case basis, subject to meeting five conditions:

1. You made the application voluntarily and before the CRA took any enforcement action against you or a third party related to you.
2. You included all relevant information and documentation with your submission (including all returns, forms and schedules needed to correct the error or omission).
3. Your information involves an application or potential application of a penalty.
4. Your information is at least one year or one reporting period past due.
5. You included payment of the estimated tax owing or requested a payment arrangement (subject to the CRA’s approval).

To make a disclosure under the VDP, you can use Form RC199, Voluntary Disclosures Program Application or send a letter to the CRA.

Claiming management fees on a previous tax return

Your non-registered management fees should be tax deductible to you, Ian. If the expenses are from the past couple years, you can definitely request an adjustment electronically or in writing with the CRA.

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.