T2125 Form Canada PDF Details

Do you need to report business income and expenses on your tax return? The T2125 form is a Canada Revenue Agency (CRA) form that does just this. It's an essential tool for any Canadian business owner since it can help you accurately calculate profits, losses, and the profits of your self-employed activities. In this blog post, we’ll cover everything you need to know about completing the T2125 Form in Canada—from what information it requires from a filer to potential deductions or expenses that may be claimed. By understanding how to fill out the T2125 form correctly, you’ll be one step closer to ensuring all applicable taxes are paid when filing taxes for your small business!

QuestionAnswer
Form NameT2125 Form Canada
Form Length5 pages
Fillable?No
Fillable fields0
Avg. time to fill out1 min 15 sec
Other namest2125, t2125e, cra form t2125 for 2019, t2125 fillable

Form Preview Example

Goods and services tax/harmonized sales tax (GST/HST) and provincial sales tax (PST)
(if included in fees above) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work-in-progress (WIP), end of the year, per election to exclude WIP (see Chapter 2 of the guide) Total of the above two lines

Statement of

Business or Professional Activities

For each business or profession, complete a separate Form T2125.

File each completed Form T2125 with your INCOME TAX AND BENEFIT RETURN.

For more information on how to complete this form, see Guide T4002, BUSINESS AND PROFESSIONAL INCOME.

Identification

Your name

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Your social insurance number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

–

 

 

 

 

 

–

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business name

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business address

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

City, province, or territory

Postal code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal period

 

Year

Month

Day

 

 

Year

Month

Day

Was 2008 your last year of business?

 

 

 

 

 

 

 

 

 

From:

 

 

 

 

 

 

 

 

To:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yes

 

 

 

 

No

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Main product or service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industry code (see the appendix in the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BUSINESS AND PROFESSIONAL INCOME guide)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax shelter identification number

 

 

 

 

Partnership filer identification number

 

 

 

 

Your percentage of the partnership

%

Name and address of person or firm preparing this form

Part 1 – Business income

2.

If you have business income, tick this box and complete this part. Do not complete parts 1 and 2 on the same form.

Sales, commissions, or fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minus

 

Goods and services tax/harmonized sales tax (GST/HST) and provincial sales tax (PST)

 

(if included in sales above)

 

 

 

 

 

 

 

Returns, allowances, and discounts (if included in sales above)

 

 

 

Total of the above two lines

 

 

 

 

 

 

Adjusted gross sales (line A minus line B)

 

Enter this amount on line 8000 in Part 3, below

 

A

B C

Part 2 – Professional income

3.

If you have professional income, tick this box and complete this part. Do not complete parts 1 and 2 on the same form.

Professional fees (includes work-in-progress) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minus

PlusSubtotal (line D minus line E) Work-in-progress (WIP), start of the year, per election to exclude WIP (see Chapter 2 of the guide) . . . . . . . . . . . . . . . . . . . . . . . . .

Adjusted professional fees (total of the above two lines)

Enter this amount on line 8000 in Part 3, below

D

E

F

Part 3 – Gross business or professional income

Adjusted gross sales (from line C in Part 1) or adjusted professional fees (from line F in Part 2)

8000

Plus

 

 

 

 

 

 

Reserves deducted last year

8290

 

 

 

 

 

 

 

 

8230

 

 

 

 

Other income

 

 

 

 

 

. . . . . . . . . . . . . . . . . .

 

 

 

 

 

 

Total of the above two lines

 

 

 

 

 

 

 

 

. . . . . . . . . . . . .Gross business or professional income (line G plus line H)

. . . . . . . . . . . . . . . . . . . .

. . . .

 

. . . . . . . . . . . .

. . . .

8299

G

H

Enter this amount on the appropriate line of your income tax and benefit return: business on line 162, professional on line 164, or commission on line 166

T2125 E

(Vous pouvez obtenir ce formulaire en français à www.arc.gc.ca ou au 1-800-959-3376.)

Page 1 of 5

Part 4 – Cost of goods sold and gross profit

If you have business income, complete this part. Enter only the business part of the costs.

Gross business income from line 8299 in Part 3 on page 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Opening inventory (include raw materials, goods in process, and finished goods)

8300

 

 

 

 

 

 

 

 

8320

 

 

 

 

Purchases during the year (net of returns, allowances, and discounts)

 

 

 

 

8360

 

 

 

 

Subcontracts

 

 

 

 

8340

 

 

 

 

Direct wage costs

 

 

 

 

 

 

 

 

 

Other costs

8450

 

 

 

 

 

 

 

 

 

Total of the above five lines

 

 

 

 

 

Minus

8500

 

 

 

 

Closing inventory (include raw materials, goods in process, and finished goods)

 

 

 

 

8518

 

 

 

Cost of goods sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (line I minus line J)

8519

I

J

Part 5 – Net income (loss) before adjustments

Gross profit from line 8519 in Part 4 above, or gross income from line 8299 in Part 3 on page 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Expenses (enter only the business part)

Advertising . . . .

8521

 

 

 

 

 

 

 

 

 

Meals and entertainment (allowable part only)

8523

 

 

 

 

Bad debts . . . .

8590

 

 

 

 

 

 

 

 

 

Insurance

8690

 

 

 

 

Interest

8710

 

 

 

 

Business tax, fees, licences, dues, memberships, and subscriptions

8760

 

 

 

 

8810

 

 

 

 

Office expenses

 

 

 

 

Supplies

8811

 

 

 

 

8860

 

 

 

 

 

 

 

 

Legal, accounting, and other professional fees

 

 

 

 

Management and administration fees

8871

 

 

 

 

8910

 

 

 

 

Rent

 

 

 

 

8960

 

 

 

 

Maintenance and repairs

 

 

 

 

 

 

 

 

 

Salaries, wages, and benefits (including employer's contributions)

9060

 

 

 

 

9180

 

 

 

 

Property taxes

 

 

 

 

Travel (including transportation fees, accommodations, and allowable part of meals)

9200

 

 

 

 

 

 

 

 

 

Telephone and utilities

9220

 

 

 

 

9224

 

 

 

 

Fuel costs (except for motor vehicles)

 

 

 

 

9275

 

 

 

 

 

 

 

 

Delivery, freight, and express

 

 

 

 

9281

 

 

 

 

Motor vehicle expenses (not including CCA) (see Chart A on page 5)

 

 

 

 

9935

 

 

 

 

Allowance on eligible capital property

 

 

 

 

9936

 

 

 

 

Capital cost allowance (CCA) (from Area A on page 4)

 

 

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

 

 

 

 

 

9270

 

 

 

 

 

 

 

9368

 

 

 

 

 

Total business expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) before adjustments (line K minus line L)

9369

K

L

Part 6 – Your net income (loss)

Your share of the amount on line 9369 in Part 5 above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minus – Other amounts deductible from your share of net partnership income (loss)

(from the chart on page 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9943 Net income (loss) after adjustments (line M minus line N) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minus – Business-use-of-home expenses (from the chart on page 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9945 Your net income (loss) (line O minus line P) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9946

Enter this amount on the appropriate line of your income tax and benefit return: business on line 135, professional on line 137, or commission on line 139

M

N O

P

Page 2 of 5

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.

Total (enter this amount on line 9943 in Part 6 on page 2)

Calculation of business-use-of-home expenses

Heat

Electricity

Insurance

Maintenance

Mortgage interest

Property taxes

Other expenses

Subtotal

Minus – Personal use part

Subtotal

Plus – Capital cost allowance (business part only)

– Amount carried forward from previous year

Subtotal

Minus – Net income (loss) after adjustments (from line O in Part 6 on page 2) – If negative, enter "0."

Business-use-of-home expenses available to carry forward (line 1 minus line 2) – If negative, enter "0."

Allowable claim (the lesser of amounts 1 or 2 above) – Enter this amount on line 9945 in Part 6.

 

 

Details of other partners

 

Share of

 

 

 

Percentage of

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

net income

 

 

 

 

 

 

 

partnership

 

or (loss)

$

 

 

and

 

 

 

 

 

 

 

 

 

 

 

 

address

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of

 

 

 

Percentage of

 

 

 

 

 

 

 

 

 

 

 

net income

 

 

 

Name

 

$

 

 

partnership

 

or (loss)

 

 

and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

address

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of net

 

Percentage of

 

 

 

 

 

 

 

 

 

income or

 

 

 

Name

 

 

 

 

partnership

 

(loss)

$

 

 

and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

address

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of net

 

Percentage of

 

 

 

 

 

 

 

 

 

income or

 

 

 

Name

 

 

 

 

partnership

 

(loss)

$

 

 

and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

address

 

 

 

 

 

 

 

 

 

 

 

Details of equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total business liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

9931

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drawings in 2008

 

 

 

 

9932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital contributions in 2008

 

 

 

 

9933

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

2

%

%

%

%

Page 3 of 5

Area A – Calculation of capital cost allowance (CCA) claim

1

2

 

3

 

4

 

5*

 

6

 

7

 

8

9

 

10

 

Class

Undepreciated

Cost of additions in

Proceeds of

UCC after additions

Adjustment for current-

Base amount for

Rate

CCA for the year

UCC at the end of

number

capital cost

the year

dispositions in the year

and dispositions

year additions

CCA

%

(col. 7 x col. 8 or an

the year

 

(UCC) at the

(see areas B and C

(see areas D and E

(col. 2 plus col. 3

1/2 x (col. 3 minus

(col. 5 minus col. 6)

 

adjusted amount)

(col. 5 minus col. 9)

 

start of the year

below)

below)

minus col. 4)

col. 4) If negative, enter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"0."

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total CCA claim for the year (enter this amount, minus any personal part and any

CCA for business-use-of-home expenses, on line 9936 in Part 5 on page 2**)

*If you have a negative amount in this column, add it to income as a recapture on line 8230, "Other income," in Part 3 on page 1. If no property is left in the class and there is a positive amount in the column, deduct the amount from income as a terminal loss on line 9270, "Other expenses," in Part 5 on page 2. Recapture and terminal loss do not apply to a class 10.1 property. For more information, see Chapter 4 in the BUSINESS AND PROFESSIONAL INCOME guide.

**For information on the CCA for "Calculation of business-use-of-home expenses," see Chapter 4 – "Special Situations" in the BUSINESS AND PROFESSIONAL INCOME guide.

Area B – Details of equipment additions in the year

1

Class

number

2

Property

details

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 – Details of building additions in the year

1

Class

number

2

Property

details

3

Total

cost

4

Personal part (if applicable)

5

Business part

(column 3 minus

column 4)

Total building additions in the year

9927

Area D – Details of equipment dispositions in the year

1

Class

number

2

Property

details

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)

Note: If you disposed of property from your business in the year, see Chapter 4 in the

Total equipment dispositions in the year

BUSINESS AND PROFESSIONAL INCOME guide for information about your proceeds of disposition.

 

9926

Area E – Details of building dispositions in the year

1

Class

number

2

Property

details

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)

Note: If you disposed of property from your business in the year, see Chapter 4 in the

Total building dispositions in the year

BUSINESS AND PROFESSIONAL INCOME guide for information about your proceeds of disposition.

 

9928

Area F – Details of land additions and dispositions in the year

Total cost of all land additions in the year

Total proceeds from all land dispositions in the year

Note: You cannot claim capital cost allowance on land.

9923

9924

Page 4 of 5

Chart A – Motor vehicle expenses

Enter the kilometres you drove in the tax year to earn business income

Enter the total kilometres you drove in the tax year

Fuel and oil

Interest (see Chart B below)

Insurance

Licence and registration

Maintenance and repairs

Leasing (see Chart C below)

Other expenses (please specify)

Total motor vehicle expenses: Add lines 3 to 10

 

line 1

:

 

 

 

 

Business use part:

(

 

 

)

line 11 :

 

$

 

line 2

:

 

 

 

Business parking fees

Supplementary business insurance

Add lines 12, 13, and 14

Allowable motor vehicle expenses: Enter the amount from line 15 on line 9281 in Part 5 on page 2.

Note: You can claim CCA on motor vehicles in Area A on page 4.

Chart B – Available interest expense for passenger vehicles

Total interest payable (accrual method) or paid (cash method) in the fiscal period

 

 

 

 

 

 

$10*

the number of days in the fiscal period for which interest

was payable (accrual method) or paid (cash method)

 

 

Available interest expense: amount A or B, whichever is less (enter this amount on line 4 of Chart A above)

$

 

 

 

* For passenger vehicles bought from 2001 to 2008.

 

Chart C – Eligible leasing costs for passenger vehicles

Total lease charges incurred in your 2008 fiscal period for the vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total lease payments deducted before your 2008 fiscal period for the vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total number of days the vehicle was leased in your 2008 and previous fiscal periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Manufacturer's list price

. . . . . . . . . . . . . . . . . . . . . .

. . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The amount on line 4 or ($35,294 GST* and PST, or HST on $35,294), whichever is more

 

$

 

 

85% =

 

[($800 + GST* and PST, or HST on $800) line 3]

 

line 2:

 

. . . . . . . . . . =

 

 

 

 

 

 

 

 

 

 

 

 

30

[($30,000 + GST* and PST, or HST on $30,000) line 1]

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . =

 

line 5

 

Eligible leasing cost: line 6 or 7, whichever is less

$

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Enter this amount on line 8 of Chart A above.)

 

*Use a GST rate of 5% or HST rate of 13% after December 31, 2007.

Use a GST rate of 6% or HST rate of 14% from July 1, 2006 to December 31, 2007.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

A

B

1

2

3

4

5

6

7

Printed in Canada

Page 5 of 5

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1. To begin with, once filling out the t2125 excel template, start with the form section that includes the following blank fields:

Writing segment 1 in t2125e

2. Once this selection of fields is done, go on to enter the applicable information in these - Part Professional income, If you have professional income, Professional fees includes, Minus Goods and services, Plus Workinprogress WIP start of, Subtotal line D minus line E, Total of the above two lines, Adjusted professional fees total, Enter this amount on line in Part, Part Gross business or, Adjusted gross sales from line C, Plus, Reserves deducted last year, Other income, and Gross business or professional.

Subtotal line D minus line E, Professional fees includes, and Plus Workinprogress WIP start of in t2125e

Always be very attentive when completing Subtotal line D minus line E and Professional fees includes, because this is where a lot of people make some mistakes.

3. Completing If you have business income, Gross business income from line, Opening inventory include raw, Purchases during the year net of, Subcontracts, Direct wage costs, Other costs, Minus Closing inventory include, Total of the above five lines, Cost of goods sold, Gross profit line I minus line J, Part Net income loss before, Gross profit from line in Part, Expenses enter only the business, and Advertising is essential for the next step, make sure to fill them out in their entirety. Don't miss any details!

Purchases during the year net of, Direct wage costs, and Expenses enter only the business in t2125e

4. This fourth part arrives with these particular blank fields to look at: Business tax fees licences dues, Office expenses, Supplies, Legal accounting and other, Management and administration fees, Rent, Maintenance and repairs, Salaries wages and benefits, Property taxes, Travel including transportation, Telephone and utilities, Motor vehicle expenses not, Allowance on eligible capital, Capital cost allowance CCA from, and Other expenses.

t2125e conclusion process outlined (stage 4)

5. This last stage to finalize this document is integral. You must fill in the necessary fields, particularly Your share of the amount on line, Minus Other amounts deductible, Net income loss after adjustments, Minus Businessuseofhome expenses, Your net income loss line O minus, Enter this amount on the, and Page of, prior to finalizing. Otherwise, it may contribute to a flawed and possibly nonvalid document!

Completing part 5 of t2125e

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