This guide covers the basics of completing your T2125 for small business and self-employment income. For more detailed information, refer to the CRA's in-depth guide.
Identification
Enter your business details:
- Business name (if registered)
- GST/HST number (if applicable)
- Income type (Commission or Business/Professional)
- Business address
- Partnership status
- Fiscal year (typically calendar year)
- Main product or service (optional, except for residents of Québec)
- Industry code
Partnership Information
If you're in a partnership:
- Answer "Yes" to "Is this a partnership?"
- Enter partner details in the Partnership information subsection
- Report full partnership amounts in the Income & Expenses, CCA, and Motor Vehicle Expenses (the partnership's vehicle) subsections
- Enter individual amounts for:
- Personal expenses not reimbursed by the partnership
- GST/HST rebate for partners
- Business-use-of-home expenses
- Motor vehicle expenses (your own vehicle)
Note: Use the Partnership Income section for partnership income reported on a T5013, not the Business, Professional, and Commission Income (T2125) section.
Income and Expenses
Report your business income and expenses:
- Enter gross revenues
-
Report GST/HST or PST collected
- Include returns, allowances, and discounts
- Report cost of goods sold (if applicable)
- Enter business expenses
Note: Keep detailed records of income and expenses.
Capital Cost Allowance (CCA)
Report capital expenses:
- Use the Additions and Dispositions table for new assets
- Most capital property is depreciable property
- Select the relevant CCA class
- Note: most Class 12 assets are not subject to the half-year rule
- Enter closing UCC balances from last year in the CCA calculation table
- Adjust the personal use rate if necessary
- Claim CCA as needed
- Note: if you have a recapture the software include this in your income
Limitations: Wealthsimple Tax doesn't support:
- Assets (other than Class 10.1 vehicles) that can be allocated to their own class (rather than grouped with items of the same class)
- Assets that are eligible for straight-line depreciation
- Classes in which you have a terminal loss
If any of these situations apply to you, or if you have already done the CCA calculations as part of your annual accounting, you can use the “report totals only” option and track your CCA manually. Reporting totals only will send the same information so it will not increase your audit risk.
Business Use-of-Home Expenses
Claim home office expenses:
- Ensure your home office qualifies
- Report expenses based on office size and business use time
- Enter rent in "Other Expenses" if you're a renter
Note: These expenses cannot be used to create a loss.
Motor Vehicle Expenses
Claim vehicle costs for business use:
- Keep detailed logbooks and receipts
- Report personal and partnership vehicles separately
Other Information
Include additional details:
- Tax shelter number
- T1139 information
- Balance sheet details
- Website information
For help entering T2125 information in Wealthsimple Tax please contact our support team. For specific advice on self-employment income reporting please consult a tax expert.
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