The Most Overlooked Tax Deduction Canadians Forget Every Year

Let’s face it: when tax season rolls around, most of us just want to get it over with. You grab your T4, punch the numbers into your software, cross your fingers for a refund, and call it a day. But in the rush to file, thousands of Canadians miss out on deductions that could shave hundreds (even thousands) off their taxable income.

And one of the most overlooked?

Carrying charges and interest expenses.

Yes, that boring little line on your tax return could be worth more than you think.

Wait—What Are Carrying Charges?

The CRA (Canada Revenue Agency) lets you deduct certain fees you pay for the purpose of earning investment income. These aren’t your everyday bank charges, but the specific costs tied directly to investing. For example:

• Investment loan interest – If you borrowed money to invest in non-registered accounts (stocks, ETFs, rental property partnerships, etc.), the interest is often deductible—provided the investment could generate taxable income like dividends, interest, or rent. (Borrowing for RRSPs, TFSAs, or crypto with no yield? Sorry, no deduction.)

• Investment counsel fees – Fees paid directly to a portfolio manager, investment advisor, or even robo-advisor may qualify. But not commissions, trading costs, or the MERs embedded in mutual funds.

• Accounting fees – If you hired a professional to prepare financial statements for your rental property, summarize investment income, or handle the “business” side of your investments, those costs can be deducted. (General T4-only tax prep? That doesn’t count.)

  
  

Why Do People Miss It?

Three reasons:

1. Confusion – Taxpayers often assume “bank fees” means all bank fees. Nope. That $15 monthly chequing fee won’t fly.

2. Paperwork fear – Claiming investment loan interest means tracking down your loan statements. Many skip it because it feels like a hassle.

3. Low awareness – The deduction isn’t heavily advertised. CRA isn’t exactly putting up billboards saying, “Hey, don’t forget line 22100!”

A Quick Story

A client once asked me if she should bother entering her $3,000 in investment loan interest. “It won’t make much of a difference, right?”

Well, she was in the 40% marginal tax bracket. That “little” deduction saved her $1,200 in taxes. Enough to pay for a vacation flight. Suddenly worth the paperwork!

How to Check If You’re Missing Out

Here’s a simple checklist:

• Do you have a line of credit, investment loan, or margin account tied to non-registered investments?

• Do you pay fees directly to a financial advisor or robo-advisor (not embedded in mutual fund MERs, and not for RRSP/TFSA accounts)?

• Have you hired an accountant to prepare financial statements for rental or investment purposes?

If you answered “yes” to any of the above, there’s a good chance you’re leaving money on the table.

The Bottom Line

Taxes aren’t just about compliance, they’re about strategy. The carrying charges and interest deduction is a prime example of how small details can add up to big savings.

So next time you file, don’t let line 22100 gather dust. Pull out those loan statements, advisor invoices, and receipts. A few minutes of effort could mean hundreds back in your pocket.

Because let’s be honest, wouldn’t you rather that money fund your next investment (or maybe your next patio set) than just disappear into the tax abyss?

Tax tip: CRA is picky. If you’re not sure what qualifies—or if your claim is on the larger side—talk to a tax professional. It’s better to file clean than to face a reassessment later.

Don’t leave money on the table this tax season. Let Anker RETax help you uncover deductions you might be missing—book a consultation today!

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Disclaimer: This content is for general information only and shouldn’t be taken as tax, legal, or investment advice. Always check with a qualified professional before acting on these strategies.

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