T2125 Forms: 1  
Federal forms: 

Protected B when completed
 
  Statement of Business or Professional Activities  
 
  • Use this form to calculate your self-employment business and professional income.
  • For each business or profession, fill in a separate Form T2125.
  • Fill in this form and send it with your income tax and benefit return.
  • For more information on how to fill in this form, see Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

 Part 1 - Identification 
                       
Your name Demo EachTax     Your social insurance number    123456789
Business name   Business number (15 characters)  
Business address   City, province or territory   Postal code
   
Fiscal period
From:
  To:   Was 2023 your last year of business?   Yes  No
Main product or service   Industry code (6 digits)  (look up here)
(see Chapter 2 in Guide T4002)
 
Tax shelter identification number     Partnership business number (9 digits)  
Accounting method
(commission only)
Cash  Accrual   Your percentage of the partnership   %
Name of preparer  
Address of preparer  
 

Part 2 - Internet business activities
 
If your webpages or websites generate business or professional income, fill in this part of the form.
                     
How many Internet webpages and websites does your business earn income from? Enter "0" if none.
 
Provide up to five main webpage or website addresses:
 
http://
http://
http://
http://
http://
 
Percentage of your gross income generated from the webpages and websites.
(If no gross income was generated from the Internet, enter "0")
%
 
 

2
  Protected B when completed
Part 3A - Business income
Fill in this part only if you have business income. If you have professional income, leave this part blank and fill in Part 3B.
If you have both business and professional income, you have to fill out a separate Form T2125 for each.

Part 3B - Professional income
Fill in this part only if you have professional income. If you have business income, leave this part blank and fill in Part 3A.
If you have both business and professional income, you have to fill out a separate Form T2125 for each.
Note: New rules allow you to include your work in progress (WIP) progressively if you elected to use billed basis accounting for the last tax year that started before March 22, 2017. Generally, for the first tax year that starts after March 21, 2017, you must include 20% of the lesser of the cost and the fair market value of WIP. The inclusion rate increases to 40% in the second tax year that starts after March 21, 2017, 60% in the third year, 80% in the fourth year, and 100% in the fifth and all subsequent tax years. For more information, see chapter 2 of guide T4002.

Part 3A - Business income
1. Tick this box and complete this part if you have business income. Do not complete Part 3A and Part 3B on the same form.
Tick this box if amount 3A is commission income.
Government Service Contract Payments (from T1204 slips) (include this in amount 3G)   
 
Gross sales, commissions, or fees (including GST/HST collected or collectible)  3A 
GST/HST, provincial sales tax, returns, allowances, discounts, and GST/HST adjustments (included in amount 3A)  3B 
Subtotal: Amount 3A minus amount 3B  3C 
 
  If you are using the quick method for GST/HST - Government assistance calculated as follows:
  GST/HST collected or collectible on sales, commissions and fees eligible for the quick method  3D 
GST/HST remitted: (sales, commissions and fees eligible for the quick method plus GST/HST collected or collectible) multiplied by the applicable quick method remittance rate  3E 
  Subtotal: Amount 3D minus amount 3E    3F 
                 
Adjusted gross sales: Amount 3C plus amount 3F (enter on line 8000 of Part 3C).  3G 

Part 3B - Professional income
2. Tick this box and complete this part if you have professinal income. Do not complete Part 3A and Part 3B on the same form.
                 
Gross professional fees including work-in-progress (WIP) (include GST/HST collected or collectible)  3H 
GST/HST, provincial sales tax, returns, allowances, discounts, and GST/HST adjustments (included in amount 3H) and any WIP at the end of the year you elected to exclude  3I 
Subtotal: Amount 3H minus amount 3I  3J 
 
If you are using the quick method for GST/HST - Government assistance calculated as follows:
GST/HST collected or collectible on sales, commissions and fees eligible for the quick method  3K 
GST/HST remitted: (sales, commissions and fees eligible for the quick method plus GST/HST collected or collectible) multiplied by the applicable quick method remittance rate  3L 
  Subtotal: Amount 3K minus amount 3L    3M 
Work-in-progress (WIP), start of the year, per election to exclude WIP (see Guide T4002, Chapter 2) .  3N 
 
Adjusted professional fees: Amount 3J plus amount 3M plus amount 3N (enter on line 8000 of Part 3C)  3O 

Part 3C - Gross business or professional income
Software Note: Please tick box 1 in Part 3A or box 2 in Part 3B as applicable to calculate line 8000 in Part 3C.
                 
Adjusted gross sales (amount 3G) or Adjusted professional fees (amount 3O) 8000   
  Reserves deducted last year 8290   
  Other income (specify) * 8230   
Subtotall: Line 8290 plus line 8230    3P 
Gross business or professional income: Line 8000 plus amount 3P 8299   
Report the gross business or professional income from line 8299 on the applicable line of your income tax and benefit return as indicated below:
  • business income on line 13499
  • professional income on line 13699
  • commission income on line 13899
 
* You may have received assistance from COVID-related measures from the federal, provincial or territorial governments. For more information on how to report COVID-related assistance, go to canada.ca/en/revenue-agency/services/wage-rent-subsidies/report-subsidy-tax-return.html.
 

3
  Protected B when completed

For Parts 3D, 4, and 5, if GST/HST has been remitted or an input tax credit has been claimed, do not include GST/HST when you calculate the cost of goods sold, expenses, or net income (loss). If you are using the quick method for GST/HST, include the GST/HST paid or payable when you calculate the cost of goods sold, expenses or net income (loss).

Part 3D - Cost of goods sold and gross profit
If you have business income, fill in this part. Enter only the business part of the costs.
                 
Gross business income (line 8299 of Part 3C)    3Q 
  Opening inventory (include raw materials, goods in process, and finished goods) 8300  3R 
  Purchases during the year (net of returns, allowances and discounts) 8320  3S 
  Direct wage costs 8340  3T 
  Subcontracts 8360  3U 
  Other costs 8450  3V 
  Subtotal: Add amounts 3R to 3V   3W 
  Closing inventory (include raw materials, goods in process and finished goods) 8500   
  Cost of goods sold: Amount 3W minus line 8500  8518     
Gross profit (or loss): Amount 3Q minus line 8518  8519   

Part 4 - Net income (loss) before adjustments
Gross business or professional income (line 8299 of Part 3C) or Gross profit (line 8519 of Part 3D).  4A 
Expenses (enter only the business part)
  Advertising 8521  4B 
  Meals and entertainment (allowable part only) 8523  4C 
  Bad debts 8590  4D 
  Insurance 8690  4E 
  Interest 8710  4F 
  Business tax, fees, licences, dues, memberships, and subscriptions 8760  4G 
  Office expenses 8810  4H 
  Supplies 8811  4I 
  Legal, accounting, and other professional fees 8860  4J 
  Management and administration fees 8871  4K 
  Rent 8910  4L 
  Maintenance and repairs 8960  4M 
  Salaries, wages, and benefits (including employer's contributions) 9060  4N 
  Property taxes 9180  4O 
  Travel 9200  4P 
  Telephone and utilities 9220  4Q 
  Fuel costs (except for motor vehicles) 9224  4R 
  Delivery, freight, and express 9275  4S 
  Motor vehicle expenses (not including CCA) (amount 16 of Chart A) 9281  4T 
  Capital cost allowance (CCA). Enter amount ii of Area A minus any personal part and any CCA for business-use-of-home expenses. 9936  4U 
  Other expenses (specify) 9270  4V 
  Total expenses: Total of amounts 4B to 4V  9368  
Net income (loss) before adjustments: Amount 4A minus line 9368 9369
                 

Part 5 - Your net income (loss)
               
Your share of line 9369 or the amount from your T5013 slip, Statement of Partnership Income  5A 
Canadian Journalism Labour Tax Credit for partners received in the year  5B 
Plus: GST/HST rebate for partners that was received in the year 9974
Total: Amount 5A plus amount 5B plus line 9974    5C 
Minus: Other amounts deductible from your share of net partnership income (loss) (from Part 6) 9943
Net income (loss) after adjustments: Amount 5C minus line 9943  5D 
Minus: Business-use-of-home expenses (amount 7P) 9945
Your net income (loss): Amount 5D minus line 9945 9946
Report the net income amount from line 9946 on the applicable line of your income tax and benefit return as indicated below:
  • business income on line 13500
  • professional income on line 13700
  • commission income on line 13900
 
 

4
  Protected B when completed
Part 6 - Other amounts deductible from your share of net partnership income (loss)

Claim expenses you incurred that were not included in the partnership statement of income and expenses, and for which the partnership did not reimburse you. These claims must not be included in the claims already calculated for the partnership.

List details of expenses Expense amounts  
Total (enter this on line 9943 of Part 5) 
 

Part 7 - Calculating business-use-of-home expenses
Heat    7A 
Electricity  7B 
Insurance  7C 
Maintenance  7D 
Mortgage interest  7E 
Property taxes  7F 
Other expenses (specify):  7G 
Subtotal: Add amounts 7A to 7G  7H 
Personal-use part of the business-use-of-home expenses  7I 
Subtotal: Amount 7H minus amount 7I  7J 
Capital cost allowance (business part only), which means amount ii of Area A minus any portion of CCA that is for personal use or entered on line 9936 of Part 4.  7K 
Amount carried forward from previous year  7L 
Subtotal: Add amounts 7J to 7L  7M 
Net income (loss) after adjustments (amount 5D) (if negative, enter "0")  7N 
Business-use-of-home expenses available to carry forward: Amount 7M minus amount 7N (if negative, enter "0")  7O 
Allowable claim: The lesser amount 7M and 7N above (enter your share of this amount on line 9945 of Part 5)  7P 
               

Part 8 - Details of other partners Do not fill in this chart if you must file a partnership information return.
(Do not enter information of yourself.)
Last name First name Address Share of net income
or (loss) $
Percentage of
partnership
(%)
 
           

Part 9 - Details of equity
Total business liabilities 9931
Drawings in the current year 9932
Capital contributions in the current year 9933   
       

Line 67090 (T2039) - Air quality improvement tax credit allocated to you in the year
               
Air quality improvement tax credit allocated to you in the year
(reported in box 238 of T5013 slip or in a letter)
Note:
This credit is government assistance received immediately before the end of the tax year it relates. If the credit is received for the acquisition of a depreciable property, the capital cost (column 3 of Area B or C of this form) of the property is reduced by the amount of the assistance. For more information, read "Grants, subsidies, and rebates" under section "Special situations" in Chapter 4 of Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.
Software Note:
If the amount is reported on a T5013 slip, please enter it in box 238 of T5013 instead of here. If the amount is provided by your partnership in a letter rather than a T5013, please enter it on line 67090 here and leave box 238 of T5013 blank.
67090
 

 

5
  Protected B when completed
Area A - Calculation of capital cost allowance (CCA) claim
Software Note
  • Please enter only one entry per each class (number).
  • If there are equipment/building additions/dispositions in Area B, C, D and E, please ensure there is one (and only one) entry in Area A with matching class number for each class number in Area B, C, D and E. The software calculates based on matching class numbers.
  • To claim less than the calculated CCA, please override the calculated amount in column 18 per each class in Area A.

1
Class number
2
Undepreciated capital cost (UCC) at the start of the year
3
Cost of additions in the year
(see Areas B and C below)
4
Cost of additions from column 3 that are DIEPs (property must be available for use in the year)
Note 1
5
Proceeds of dispositions in the year
(see Areas D and E below)
6
Proceeds of dispositions of DIEP (enter amount from col. 5 that relates to DIEP from col. 4)
7**
UCC after additions and dispositions
(col. 2 plus col. 3 minus col. 5)
8
UCC of DIEP (col. 4 minus col. 6)
Note 2
9
Immediate expensing amount for DIEPs
Note 3
10
Cost of remaining additions after immediate expensing (col. 3 minus col. 9)
 
Total immediate expensing claim for the year: Total of column 9  i 

11
Cost of remaining additions from column 10 that are AIIPs or ZEVs
Note 4
12
Remaining UCC after immediate expensing (col. 7 minus col. 9) If negative, enter "0"
13
Proceeds of dispositions available to reduce additions of AIIPs and ZEVs (col. 5 minus col. 10 plus col. 11). If negative, enter "0"
Note 5
14
UCC adjustment for current-year additions of AIIPs and ZEVs (col. 11 minus col. 13) multiplied by the relevant factor. If negative, enter "0"
Note 6
15
Adjustment for current year additions subject to the half-year rule.
1/2 multiplied by (col. 10 minus col. 11 minus col. 5).
If negative, enter "0"
16
Base amount for CCA
(col. 12 plus col. 14 minus col. 15)
17
CCA
rate
%
18
CCA for the year
(col. 16 multiplied by col. 17 or a lower amount, plus col. 9)
19
UCC at the end of the year
(col. 7 minus col. 18)
 
Total CCA claim for the year  ii 
Personal part of the CCA and any CCA for business-use-of-home expenses***  -
Business part of the CCA claim for the year (enter the amount on line 9936 of Part 4)  =
** If you have a negative amount in column 7, add it to income as a recapture in Part 3C on line 8230. If no property is left in the class and there is a positive amount in this column, deduct the amount from income as a terminal loss in Part 4 on line 9270. Recapture and terminal loss do not apply to a Class 10.1 property unless it is a DIEP. For more information, read Chapter 3 of Guide T4002.
*** For information on CCA for "Part 7 Calculating business-use-of-home expenses," see "Special situations" in Chapter 4 of Guide T4002. To help you calculate the CCA, see the calculation charts in Areas B to G.
       

 

6
  Protected B when completed
Note 1 Columns 4, 6, 8 and 9 apply only to designated immediate expensing properties (DIEPs). See subsection 1104(3.1) of the federal Income Tax Regulations for definitions. A DIEP is a property that you acquired after December 31, 2021, and that became available for use in the current year. For more information, see Guide T4002.
Note 2 The proceeds of disposition of a zero-emission passenger vehicle (ZEPV) that has been included in Class 54, or a passenger vehicle bought after April 18, 2021, that has been included in Class 10.1, and whose cost is more than the prescribed amount will be adjusted based on a factor equal to its prescribed amount as a proportion of the actual cost of the vehicle. For dispositions after July 29, 2019, you will have to adjust the actual cost of the vehicle for any payments or repayments of government assistance that you may have received or repaid for the vehicle. If the passenger vehicle in Class 10.1 is not designated for immediate expensing treatment, this special rule does not apply. For more information on proceeds of disposition and prescribed amounts, read "Class 10.1 (30%)" and "Class 54 (30%)" in Guide T4002.
Note 3 The amount you enter in column 8 must not be more than the amount in column 7. If the amount in column 7 is negative, enter "0."
Note 4 The immediate expensing applies to DIEPs included in column 8. The total immediate expensing amount for the tax year (total of column 9) is limited to the lesser of:
  • the immediate expensing limit, which is equal to one of the following, whichever is applicable:
    • $1.5 million, if you are not associated with any other eligible person or partnership (EPOP) in the tax year
    • amount iv of Area G, if you are associated with one or more EPOPs in the tax year
    • zero, if you are associated with one or more EPOPs and an agreement that assigns a percentage to one or more of the associated EPOPs was not filed with the minister in a prescribed form
    • any amount allocated by the minister under subsection 1104(3.4) of the Regulations
  • the UCC of DIEPs in column 8
  • the amount of income, if any, earned from the source of income that is a property (before any CCA deductions) in which the relevant DIEP is used for the tax year
For more information, see Guide T4002.
Note 5 Columns 11, 13 and 14 apply only to accelerated investment incentive properties (AIIPs) (see subsection 1104(4) of the federal Income Tax Regulations for the definition), zero-emission vehicles (ZEVs), ZEPVs and other eligible zero-emission automotive equipment and vehicles that become available for use in the year. In this chart, ZEVs represent zero-emission vehicles, zero-emission passenger vehicles and other eligible zero-emission automotive equipment and vehicles. An AIIP is a property (other than a ZEV) that you acquired after November 20, 2018, and that became available for use before 2028. A ZEV is a motor vehicle included in Class 54 or 55 that you acquired after March 18, 2019, and that became available for use before 2028, or eligible zero-emission automotive equipment and vehicles included in Class 56 acquired after March 1, 2020, and that became available for use before 2028. For more information, see Guide T4002.
Note 6 The relevant factors for properties available for use before 2024 are 2 1/3 (Classes 43.1, 54 and 56), 1 1/2 (Class 55), 1 (Classes 43.2 and 53), 0 (Classes 12, 13, 14 and 15) and 1/2 for the remaining AIIPs.
 
For more information on AIIPs, see Guide T4002 or go to canada.ca/taxes-accelerated-investment-income.
       
Area B - Equipment additions in the year
1
Class number
2
Property description
3
Total cost
4
Personal part
(if applicable)
5
Business part
(column 3 minus column 4)
 
Total equipment additions in the year 9925
 

Area C - Building additions in the year
1
Class number
2
Property description
3
Total cost
4
Personal part
(if applicable)
5
Business part
(column 3 minus column 4)
 
Total building additions in the year 9927
 
 

7
  Protected B when completed
Area D - Equipment dispositions in the year
1
Class number
2
Property description
3
Proceeds of disposition
(should not be more than the capital cost)
4
Personal part
(if applicable)
5
Business part
(column 3 minus column 4)
 
Total equipment dispositions in the year 9926
Note: If you disposed of property from your business in the year, see Chapter 3 of Guide T4002 for information about your proceeds of disposition.
Area E - Building dispositions in the year
1
Class number
2
Property description
3
Proceeds of disposition
(should not be more than the capital cost)
4
Personal part
(if applicable)
5
Business part
(column 3 minus column 4)
 
Total building dispositions in the year 9928
Note: If you disposed of property from your business in the year, see Chapter 3 of Guide T4002 for information about your proceeds of disposition.
 
Area F - Land additions and dispositions in the year
Total cost of all land additions in the year 9923
Total proceeds from all land dispositions in the year 9924
       
Note: You cannot claim capital cost allowance on land. For more information, see Chapter 3 of Guide T4002.

Area G - Agreement between associated eligible persons or partnerships (EPOPs)
 
Are you associated in the fiscal period with one or more EPOPs that you have entered into an agreement with under subsection 1104(3.3) of the Regulations? Yes  No
 

If you answered yes, fill in the table below.

Enter the percentage assigned to each associated EPOP (including your business) as determined in the agreement.

This percentage will be used to allocate the immediate expensing limit. The total of all percentages assigned under the agreement should not be more than 100%. If the total is more than 100%, then the associated group has an immediate expensing limit of zero. For more information about the immediate expensing limit, see Guide T4002.

       
1
Name of the EPOP
2
Identification number
Note 7
3
Percentage assigned under the agreement
(%)
 
Total of percentage assigned: Total of column 3 
       
Immediate expensing limit allocated to your business: Multiply 1.5 million by the percentage assigned to your business in column 3 (see note 8) . iii
         
 
Note 7: The identification number is the EPOP's social insurance number, business number or partnership account number.
Note 8: If the total of column 3 is more than 100%, enter "0".
 

 

8
  Protected B when completed
 
Chart A - Motor Vehicle Expenses
Kilometres you drove in the fiscal period that was part of earning business income  1 
Total kilometres you drove in the fiscal period  2 
 
   Fuel and oil  3 
   Interest (use Chart B)  4 
   Insurance  5 
   Licence and registration  6 
   Maintenance and repairs  7 
   Leasing (use Chart C)  8 
   Electricity for zero-emission vehicles  9 
   Other expenses (specify)  10 
    11 
   Total motor vehicle expenses: Add amounts 3 to 11  12 
                       
   Business-use part: amount 1: ÷ amount 2: x amount 12: =  13 
 
   Business Parking Fees  14 
   Supplementary Business Insurance  15 
 
Allowable motor vehicle expenses: Add amounts 13 to 15 (enter this total on line 9281 of Part 4)  16 
Note: You can claim CCA on motor vehicles in Area A.
 
Chart B - Available interest expense for passenger vehicles
Total interest payable (accrual method) or paid (cash method) in the fiscal period  17 
   $10****  X  the number of days in the fiscal period for which interest was payable (accrual method) or paid (cash method) =  18 
 
Available interest expense: Amount 17 or 18, whichever is less (include this in amount 4 of Chart A)    19 
                 
**** For passenger vehicles bought after year 2000.
 
Chart C - Eligible leasing costs for passenger vehicles ****
                         
Total lease charges incurred in your current fiscal period for the vehicle  20 
Total lease payments deducted before your current fiscal period for the vehicle  21 
Total number of days the vehicle was leased in your current and previous fiscal periods  22 
Manufacturer's list price  23 
 
Year that the leases were entered into (see note 9, 10 and 11)   
 
Use a GST rate of 5% or HST rate applicable to your province.   
 
Amount 23 or ($42,353 + GST and PST, or $42,353 + HST), whichever is more (see note 9)
$  x 85% =  24 
 
[($950 + GST and PST, or $950 + HST)] (see note 10)
($  x amount 22) ÷ 30 =  25 
Amount 25: -   amount 21: =  26 
 
[($36,000 + GST and PST, or $36,000 + HST)] (see note 11)
$  x amount 20 = ÷ amount 24: =  27 
 
Eligible leasing cost: Amount 26 or 27, whichever is less (enter in amount 8 of Chart A above)    28 
**** Includes a vehicle that would qualify as a zero-emission passenger vehicle if you owned it.
 
         
Note 9: For leases entered into in 2022, it's amount 23 or ($40,000 plus GST and PST, or HST on $40,000), whichever is more. For leases entered into before 2022, it's amount 23 or ($35,294 plus GST and PST, or HST on $35,294, whichever is more.
Note 10: For leases entered into in 2022, amount 25 is equal to [($900 plus GST and PST, or $900 plus HST) multiplied by amount 22], divided by 30. For leases entered into before 2022, amount 25 is equal to [($800 plus GST and PST, or $800 plus HST) multiplied by amount 22], divided by 30.
Note 11: For leases entered into in 2022, amount 27 is equal to [($34,000 plus GST and PST, or $34,000 plus HST) multiplied by amount 20], divided by amount 24. For leases entered into before 2022, amount 27 is equal to [($30,000 plus GST and PST, or $30,000 plus HST) multiplied by amount 20], divided by amount 24.