Individuals with business or professional income generally use Form T2125 to report the activity’s income and expenses with their T1 return. Sole proprietors, freelancers and independent contractors may need it; the activity’s facts determine whether income is business or employment income. CRA Form T2125.
Who Needs to Fill Out a T2125? The Quick Test
If the activity is a source of business or professional income, you generally report it on T2125 with the individual T1 return; there is no minimum amount of business income before reporting applies. A corporation reports its own income on a T2, while its owner may have separate personal reporting obligations. Employment income is not automatically self-employment income. A personal endeavour may not be a business, but calling an activity a hobby does not settle its treatment; the facts and evidence of a source of income matter. CRA Form T2125.
If you run two unrelated activities — say, freelance writing and an e-commerce shop — CRA requires a separate T2125 for each distinct business, both filed on the same T1.
A business loss does not automatically make an activity a hobby or disqualify a deduction. Consider whether there is a source of business income and whether the expense is deductible in the actual circumstances; keep records supporting the activity and expenses. CRA business-income guidance.
Do I Need to Fill Out a T2125 if I Have a T4A?
A T4A box 048 reports fees for services; check the nature of the underlying income and CRA’s reporting instructions. A T4A slip by itself does not determine whether every amount is business income, and income without a slip can still be reportable. Scholarship and pension boxes have their own T1 treatment. CRA reporting fees for services.
Keep invoices and relevant slips together, avoid counting the same fees twice, and follow the CRA form instructions for each business or professional activity. CRA T2125.
How to Fill Out a T2125 Form? Step by Step
Use the CRA form and instructions for the year you are filing. Identify the business, enter sales or professional fees, complete the tax adjustments shown on the form, and record eligible business expenses and capital cost allowance where applicable. CRA’s business-income worksheet first includes GST/HST collected or collectible in gross sales, then applies the form’s adjustments; the Quick Method has additional rules. CRA T2125 business-income instructions.
How do I fill out a T2125 form? The same way each year: keep receipts and a mileage log as you go rather than reconstructing them at tax time — the expense categories on the form only hold up under review if you can back each one with a record.
Income Tax vs. GST/HST: Don’t Confuse the Two Rules
Reporting business income on T2125 and registering for GST/HST are separate obligations. Generally, the GST/HST small-supplier test considers worldwide taxable supplies, including those of associates, over one calendar quarter and over four consecutive calendar quarters. If the $30,000 threshold is exceeded in one quarter, status ends immediately and GST/HST applies to the supply that takes you over. If exceeded over four consecutive quarters but not one quarter, status ends at the end of the following month; tax applies from your effective registration date, which is no later than the first taxable supply after that. Register within 29 days of the effective date. Taxi and commercial rideshare operators are among the exceptions that must register regardless of the threshold. CRA registrant guide.
Deadlines and Quebec Filers
For a 2025 T1 return, CRA generally listed June 15, 2026 for a person carrying on a business or their spouse/common-law partner who lived with them during the year, with an exception where the business expenditures relate mostly to a tax shelter investment; the balance was due April 30, 2026. Check the dates and conditions for the tax year being filed. GST/HST annual filing is a separate rule. CRA 2025 filing dates.
Québec residents reporting business or professional income may also need Revenu Québec form TP-80-V with their provincial income-tax return; farmers and fishers use a different form. Check the Revenu Québec instructions for the relevant year and your circumstances.
Related guides
Sources
Sources checked October 17, 2026.