Tax Season Checklist: Take a Look at Your Portfolio

Many of us are preparing our income tax return, which means you should check in with your portfolio.

That’s because income you earn when investing can be taxable, so you’ll need to find out if you have taxable investment income.

In this post, we’ll go through the basics of checking in with your portfolio, and some key information to know when reporting your investment income.

Filing Deadlines for the 2020 Tax Season

The deadline to file your individual 2020 income tax return is April 30, 2021. Click here for a full list of filing due dates in Canada.

How to Check Your Portfolio

Regular account statements from investment firms, and from the companies you’re investing in, will provide you with information on how your investments are doing.

Request Investment Account Statements

You can get information on how your portfolio is performing by checking your regular investment account statements. If you’re working with a registered investment advisor, their firm must provide you with account statements at least every three months (or every month if you request them). The firm must also provide you with an annual investment performance report. Click here to see a sample report.

You can also watch this video to learn more about the details of your investment performance report.

Determine the Value of Your Investments

This short video explains what you can expect to see on your investment account statements. Knowing the value of your investments on a regular basis can help you determine if your portfolio is still working for you and is meeting your financial goals.

Check in with Your Registered Advisor

Having the information above can help you monitor your portfolio, and make it easier to talk to your registered investment advisor about your portfolio. Together you can determine if your mix of assets are working for you.

There are some considerations to go over with your advisor when deciding on changes to your portfolio. Here are some key questions you should ask before buying or selling an investment.

Social distancing is in place across Canada to help curb the spread of COVID-19, which means you may not be able to meet with your registered advisor in person. The Mutual Fund Dealers Association of Canada (MFDA) has provided some tips to help you meet with your advisor in effective, secure ways.

Tips on Working Remotely with Your Advisor During COVID-19

  1. Meet remotely. Use videoconferencing services to connect with your registered advisor. Popular services include Skype and FaceTime. Try to familiarize yourself with your preferred service before using it to call your advisor. This will help reduce the number of technological hiccups that could occur during your appointment.
  2. Find a quiet place. Try to set up your meeting away from others so that your privacy and other sensitive information remains protected.
  3. Send information securely. If you need to send private, sensitive, and/or confidential information to your advisor, do not send it using unsecured websites or e-mail services. Private information like your SIN is best communicated directly over the phone, or via other secure methods.

Why You Should Check Your Portfolio

As mentioned earlier, it’s important to check in with your portfolio during tax season so that you can determine whether you have taxable investment income to report. Outside of tax season, monitoring your portfolio regularly is a good investing habit to build. Let’s explore three additional reasons why monitoring your portfolio matters.

1. You Can Determine Whether Your Investments Are Still Right For You

Investment account statements generally set out the cost and market value of each investment.  By checking your account statements regularly, this information can help you determine if your investments are still aligned with your financial goals. You may find that your goals or your financial situation changed over time, and your investment plan may need to be updated.

2. You Can Take Steps To Stay On Track

If you think your portfolio is off track or no longer suits your short- or long-term goals, work with your registered investment advisor to figure out what’s happening. Then you can determine whether you need to take action. Diversifying so that you hold a mix of investments is one tactic you can use to refresh your portfolio.

3. You Can Better Understand Investment Fees and Charges

If you’re monitoring your investments statements regularly, you will become better informed about the investment fees and charges you’re paying. When you understand your fees, you can evaluate the true cost of your investments, as well as the services you receive from your registered investment advisor. Learn more about fees and charges.

If you feel like you’re paying too much in fees, it may be a good time to talk to your registered advisor about other options that may be more cost-effective, but still fit with your goals.

Reporting Income Earned Through Investments

Income you earn through investments makes up a component of your taxable income. It is calculated in with the income you earn from employment and other sources. There are a couple of points to be aware of when reporting your investment income.

Not All Investment Income is Taxed at the Same Rate

When it comes to investing, the income you earn can come in various ways, and the Canada Revenue Agency (CRA) taxes income types differently.

For example, income earned from interest may be taxed differently than income earned from dividends. In some cases, investment income isn’t taxed at all. For instance, if you hold investments in a Tax-Free Savings Account (TFSA), the amount contributed as well as the income gained from investments in the account is tax-free, even on withdrawal.

Talk to your registered advisor and/or a tax expert to understand how your investments will be taxed.

Some Investment Fees and Charges May Be Tax Deductible

Many BC investors want to know if their broker or investment advisor fees, mutual fund management fees, and any trailing commissions they incur are tax deductible in Canada.

The rules vary widely, but it’s helpful to know that some types of investment fees and charges are tax deductible. For more information, it’s best to speak with an accountant or another tax expert, or contact the CRA.

Report a Concern

If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393, or through e-mail at [email protected]. You can also file a complaint or submit a tip anonymously using BCSC’s online complaint form. is the British Columbia Securities Commission’s investor education website. Subscribe to receive email updates from BCSC InvestRight.

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