Do You Have to Fill Out Income Tax Form T2125?
Tuesday February 17, 2009
In a word, yes, if you are running an unincorporated business.
Income Tax form T2125 replaces form T2124, the Statement of Business Activities form and T2032, the Statement of Professional Activities form. The new form combines the two previous forms, so if you have either business or professional income, you'll fill out income tax form T2125. Likr the previous forms it replaces, form T2125 will be included in your T1 income tax form package.
Here's what income tax form T2125 looks like.
Do You Have Business Income You're Not Declaring?
Some people get confused about the scope of business income. For instance, because they haven't registered a business, they think they don't have to fill out T2125 when they're completing their T1 income tax form.
Or they think that because they haven't sold much, what they've done doesn't count as business income.
But all the money you make counts, and if you've sold items for profit (even just a few!) you're engaging in business activities according to the Canada Revenue Agency. (See Surprise! You're Running a Small Business for more on this.)
Remember, it's your total world-wide income that the government expects you to declare (and will tax).
More on Preparing Canadian Income Tax
Income Tax form T2125 replaces form T2124, the Statement of Business Activities form and T2032, the Statement of Professional Activities form. The new form combines the two previous forms, so if you have either business or professional income, you'll fill out income tax form T2125. Likr the previous forms it replaces, form T2125 will be included in your T1 income tax form package.
Here's what income tax form T2125 looks like.
Do You Have Business Income You're Not Declaring?
Some people get confused about the scope of business income. For instance, because they haven't registered a business, they think they don't have to fill out T2125 when they're completing their T1 income tax form.
Or they think that because they haven't sold much, what they've done doesn't count as business income.
But all the money you make counts, and if you've sold items for profit (even just a few!) you're engaging in business activities according to the Canada Revenue Agency. (See Surprise! You're Running a Small Business for more on this.)
Remember, it's your total world-wide income that the government expects you to declare (and will tax).
More on Preparing Canadian Income Tax
- Your First Business Income Tax Return
- Getting Your Tax Records Ready for Your Accountant
- Top Canadian Tax Software Programs
Good article.
Which form to fill out the self-employment business expense? Is it T777?
I’m doing some part time IT consultant.
Thanks,
Charlie
http://sbinfocanada.about.com/od/incometaxcanada/a/firstincometax.htm
After read above post, I guess I only need to fill form T2125 part 5 – Net income (loss) before adjustment, am I right?
So I don’t have to worry about T777.
Thanks,
Charlie
That’s right, Charlie. It’s all recorded and figured out on the one form.
Thanks you Susan !
If I use Quicktax, is the Income Tax form T2125 incorporated into the software, or is this something I will have to do separately?
It’s incorporated into the software, Sara.
Does Simply Accounting Pro provide a T2125?