How Should Canadian Investors Declare Their Income for Tax?

Whether you’re earning interest from savings, dividends from stocks, or gains from crypto, the Canada Revenue Agency (CRA) expects you to report your income accurately. This guide walks you through what you need to declare, how you should classify different income types, and what forms to use, no matter what kind of investor you are.

Step 1: Separate Your Registered and Taxable Accounts

First, identify which of your accounts are taxable and which are registered. Only non-registered accounts, like a standard brokerage account, require annual reporting.

With RRSPs (Registered Retirement Savings Plans), your investments grow tax-deferred and aren’t reported yearly. TFSAs (Tax-Free Savings Accounts) are tax-free and also don’t require annual reporting, unless you’re exceeding limits or day trading inside them.

For everything outside of these accounts, you’ll need to report interest, dividends, and capital gains.

Step 2: Gather Your Tax Slips and Records

Start by gathering all your tax documents—that means your T3s and T5s, summaries from crypto exchanges, and any records showing sales or transfers you made during the year. If you’re trading on platforms like Wealthsimple or Binance, make sure to download those year-end reports they provide. And here’s something important to remember: even if you don’t get an official tax slip in the mail, you’re still on the hook for reporting that income to the CRA.

Step 3: Classify Each Type of Income

Once you have everything together, you’ll want to sort your earnings into different buckets. Interest income gets the full tax treatment and goes on Line 12100 of your return. Dividends from Canadian companies are a bit more tax-friendly—they go on Line 12000, and you might get a nice tax credit to help reduce what you owe. But you’ll pay full tax on foreign dividends without any credit.

If you sold any stocks or crypto during the year, those capital gains would need to be reported on Schedule 3. The good news is that only half of your capital gains are actually taxable. And if you sold something for less than you paid, those capital losses can help offset your gains this year, or you can save them to use against future gains. Remember, however, that even if you didn’t sell anything yourself, you might still receive a T3 slip showing capital gains distributions if you own mutual funds or ETFs.

Step 4: Know When Your Activity Is Business Income

If you’re actively trading crypto, creating and flipping NFTs, earning staking rewards, or doing frequent short-term speculation, the CRA may treat your profits as business income rather than capital gains. This means 100% of your profits get taxed as regular income instead of the more favorable capital gains treatment.

When your crypto activity looks like a business—frequent, structured, and profit-focused—you’ll report it on Form T2125, which also lets you deduct business-related expenses like equipment and software costs.

Step 5: Report Cryptocurrency Activity Correctly

Casual buying and selling of crypto is usually treated as capital gains. But mining, staking, or regular trading moves you into business income territory.

You’ll need to keep detailed records of everything—transaction dates, costs, sales, wallet addresses, and even gas fees. Don’t expect tax slips from most crypto platforms; the CRA expects you to track and report it all yourself.

Step 6: Declare Foreign Income and CFD Profits

If you’re trading on speculative platforms like CFD (Contract for Difference) brokers or selling crypto on global exchanges, you’ll need to convert everything to Canadian dollars using the Bank of Canada’s daily or annual average exchange rates.

Watch out for the $100,000 CAD threshold—if your total foreign assets exceed this amount at any point during the year, you must file Form T1135. This includes foreign brokerage accounts and potentially offshore crypto wallets, though the rules around crypto location are still murky.

Profits from speculative platforms like CFD brokers are usually considered business income. If trades are frequent or part of a structured strategy, you’ll need to report the income fully, even if no slip is issued and the platform operates offshore.

Step 7: Claim Business Deductions Where Eligible

If your income qualifies as business income, you can deduct costs like software, hardware, transaction fees, and part of your internet bill. These deductions don’t apply to passive investing or capital gains.

You’ll need actual receipts and detailed records to back up every deduction. The CRA won’t accept ballpark estimates or screenshots of your expenses, so keep those paper trails organized from day one.

Step 8: Maintain Records for Six Years

Save everything—transaction histories, receipts, platform exports, and any notes that back up what you’ve reported. For crypto, that means keeping wallet logs even from decentralized platforms where records can be harder to track down later.

The CRA can come knocking years down the road for an audit, so don’t count on remembering details or being able to pull up old app balances. What seems obvious now might be a complete mystery three years from today.

Step 9: File On Time to Avoid Penalties

Most people have until April 30 to file their taxes, but if you’re reporting self-employment income—like crypto mining or trading as a business—you get an extension until June 15. Just remember, any money you owe is still due by April 30, regardless of when you file.

Always file your return on time, even if you can’t pay the full amount. Late filing penalties add up quickly and will cost you way more than working out a payment plan with the CRA.

Step 10: Use the Right Forms

Each type of income has its own designated spot on your return, and getting these right matters:

• Interest: Line 12100
  
• Canadian dividends: Line 12000
  
• Capital gains: Schedule 3
  
• Crypto or business income: Form T2125
  
• Foreign holdings over $100K: Form T1135
  

Mistakes on forms or lines can trigger delays—or even an audit down the road.

File What’s Real, Keep What’s Clear

Filing taxes as an investor isn’t optional, but it doesn’t have to be overwhelming. The key is knowing where your income came from, how to classify it properly, and which forms to use for each type. Keep solid records that can back up everything you report.

Get those basics right, and you’ll stay ahead, confident, and audit-proof.