You need to know your Industry Code when you're filling out your T2125 Statement of Business Activities as part of your T1 income tax return. (See Canadian Income Tax: Must You Fill Out Form T2125? for more details.)
Here's the list of Industry Codes you get to choose from (Canada Revenue Agency).
The catch is that you need to choose the Industry Code that fits your main business activity best - which I always find a bit of a scavenger hunt as the powers-that-be haven't caught up to the Internet age and seem to have a limited view of professions.
For instance, there is no appropriate industry code for writers and/or editors under Professions - "541990 Other professional, scientific or technical services" is as close as it gets. Thinking about Web designers, bloggers and SEO experts, just to name a few professionals that work the 'Net, I can see that "519130 Internet Publishing and Broadcasting" is going to get a lot of use.
But remember, the Industry Code you choose doesn't have to describe exactly what you do or all of what you do. Choose the general category your main business activity fits into (such as business services, construction or retail stores) and work from there.
I, for instance, might sidestep the whole Internet questions and label myself as "an independent artist, writer and performer" - code 711500.Want more information on completing and filing the T1 income tax form? Your First Business Income Tax Return will lead you through the process.
If you want to use tax preparation software to check out different tax scenarios or prepare your own income tax, Top Canadian Income Tax Software presents what I think are the best choices for small businesses.
Learn More About Canadian Income Tax
- Canadian Income Tax Due Dates
- How Long Does a Tax Refund Take?
- Canadian Income Tax and Your Small Business
- Business Expenses Index for Canadian Businesses
- Canadian Income Tax FAQs for Small Businesses
- How to Complete the T1 Canadian Income Tax Form as a Business
- How to Calculate Capital Cost Allowance
- Guide to Income Tax for Canadian Corporations
- Investment Tax Credits for Canadian Small Businesses
- Top Canadian Tax Software Programs
Image (c ) Trinette Reed / Getty Images