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Statement of Business or Professional Activities
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Form T2125 in short
Form T2125 is where self-employed people in Canada report income and expenses from a business or profession. It works out your gross income and your net income or loss, which you then carry to your income tax and benefit return. You fill in a separate T2125 for each business or professional activity.
| Issued by | Canada Revenue Agency (CRA) |
|---|---|
| Current version | 2025 version (checked 2026-10-25) |
| Who fills it in | Sole proprietors and partners who earn business, professional or commission income as self-employed people. Farming and fishing income use other forms (T2042 and T2121). The CRA says to fill in a separate T2125 for each business, and a separate one for business income and for professional income if you have both. |
| Who receives it | The Canada Revenue Agency, as part of your T1 income tax and benefit return. |
| Where to send it | The form says to send it with your income tax and benefit return. If you file electronically, your tax software includes it. Gross income from line 8299 goes on line 13499, 13699 or 13899, and net income from line 9946 goes on line 13500, 13700 or 13900, depending on the type of income. |
| Deadline | For the 2025 tax year, Guide T4002 says to file your return by June 15, 2026 if you have self-employment income (or your spouse or common-law partner does and you lived with them), but to pay any balance owing by April 30, 2026. Different dates apply if your business spending is mainly tax shelter investments. |
| Official links | Official page · Official PDF · Official instructions |
What changed
This is the 2025 version. Guide T4002 lists these 2025 changes: the Class 10.1 passenger vehicle limit rose from $37,000 to $38,000 before tax for vehicles acquired on or after January 1, 2025, and the maximum deductible leasing cost rose from $1,050 to $1,100 per month before tax for new leases from January 1, 2025. The guide also describes proposed capital cost allowance changes (the reaccelerated investment incentive) that were not yet law when it was published.
How to fill out Form T2125, line by line
| Part 1 | Identification Your name and social insurance number, business name, business number, address, fiscal period, whether this was your last year of business, main product or service, six-digit industry code from Guide T4002, and partnership details if any. |
| Part 2 | Internet business activities If your web pages or websites earn income, enter how many earn income, up to five main addresses, and the percentage of gross income they generate. Enter 0 if none. |
| Part 3A | Business income Only for business income. Gross sales, commissions or fees including GST/HST collected, minus GST/HST, PST, returns, allowances and discounts. There are extra lines if you use the quick method for GST/HST. |
| Part 3B | Professional income Only for professional income. Gross professional fees including work in progress (WIP) and GST/HST collected, minus the same kinds of adjustments as Part 3A. |
| Part 3C, line 8299 | Gross business or professional income Adjusted gross sales or fees on line 8000 plus other income such as line 8230. Report line 8299 on line 13499 (business), 13699 (professional) or 13899 (commission) of your return. |
| Part 3D | Cost of goods sold and gross profit For businesses that sell goods: opening inventory, purchases, direct costs and closing inventory, giving gross profit on line 8519. |
| Part 4 | Expenses and net income before adjustments Enter only the business part of each expense, such as advertising (8521), meals and entertainment (8523), insurance (8690), office expenses (8810), rent (8910), travel (9200), motor vehicle expenses from Chart A (9281) and capital cost allowance (9936). Line 9369 is net income (loss) before adjustments. |
| Part 5, line 9946 | Your net income (loss) Your share of line 9369, partnership adjustments, minus business-use-of-home expenses on line 9945. Report line 9946 on line 13500, 13700 or 13900 of your return. |
| Part 6 | Other amounts deductible from your share of partnership income For partners only: expenses the partnership did not reimburse you for. |
| Part 7 | Business-use-of-home expenses Heat, electricity, insurance, maintenance, mortgage interest, property taxes and other home costs, then the business part only. The allowable claim cannot create or increase a business loss; any excess carries forward. |
| Part 9 and Areas A to G | Equity and capital cost allowance Total business liabilities (line 9931), drawings in the current year (9932) and capital contributions (9933), then the CCA calculation by class, and additions and dispositions of equipment, buildings and land. |
| Charts A to C | Motor vehicle expenses Kilometres driven for business and in total, fuel, insurance, licence, maintenance, interest (Chart B) and leasing (Chart C). Only the business use part is allowed. |
Common mistakes to avoid
- Using one T2125 for two separate businesses, or for both business and professional income. The CRA says to fill in a separate form for each.
- Filling in both Part 3A and Part 3B. The form says to fill in only the part that matches your income type.
- Claiming the full amount of meals and entertainment. Guide T4002 says the maximum is generally 50% of the lesser of the amount incurred and a reasonable amount.
- Using business-use-of-home expenses to create or increase a loss. T4002 says the claim cannot be more than your net income from the business before these expenses.
- Claiming the personal part of vehicle or home costs. The form asks for the business part only, and Chart A works out business use from kilometres driven.
- Including GST/HST in expenses when you claimed input tax credits. The form says not to include GST/HST in that case, unless you use the quick method.
- Reporting a loss from a flipped property on the return. The form says that loss is deemed to be zero.
- Leaving out the industry code, or using a general code when a more specific six-digit NAICS code fits.
Questions about Form T2125
When is my return due if I am self-employed?
For 2025, Guide T4002 says June 15, 2026 for most people with self-employment income. Any balance owing is still due by April 30, 2026, so interest can start before you file.
I have two businesses. Do I need two forms?
Yes. The CRA says to complete a separate Form T2125 for each business or professional activity, and a separate one for business and professional income if you have both.
Can I deduct home office costs on the T2125?
Possibly. T4002 says you can if the work space is your principal place of business, or you use it only to earn business income and regularly meet clients there. You claim the business part in Part 7, and it cannot create or increase a loss.
Where do the totals go on my tax return?
Gross income from line 8299 goes on line 13499, 13699 or 13899. Net income from line 9946 goes on line 13500, 13700 or 13900. The line depends on whether the income is business, professional or commission income.
Do I need to send receipts with the T2125?
No. Keep them. T4002 says you are required by law to keep records that support your income and expense claims, and there are penalties for not keeping adequate records.
I am an employee who earns commission. Is this my form?
Usually not. T4002 says a self-employed commission salesperson is different from an employee who earns commission. Employees claim employment expenses on Form T777 with a T2200 from their employer.
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Sources
Checked against the official sources on 2026-10-25. PDF Editor Hub is not affiliated with the Canada Revenue Agency or any government agency. This page is general information, not legal or tax advice.
- https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2125.html
- https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t2125/t2125-fill-25e.pdf
- https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/completing-form-t2125.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002/t4002-2.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002/t4002-3.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002/t4002-4.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002/t4002-5.html
- https://www.canada.ca/en/transparency/terms.html