T2125 Statement of Business or Professional Activities
Form T2125 is how a self-employed person — a sole proprietor, freelancer, contractor or professional — reports business or professional income and expenses. It isn't filed on its own: it's part of your personal T1 income tax return.
Download the official T2125 form (canada.ca)Opens the current version on the Government of Canada website — always the up-to-date form, straight from the source.
What the T2125 is for
If you earn self-employment income — driving, trades, a salon, IT contracting, e-commerce, consulting — you report that income and your related expenses on the T2125. It calculates your gross and net business income, and that net figure flows into your T1 return alongside any other income you have.
You complete a separate T2125 for each business or professional activity. Business income and professional income go on separate forms if you have both.
What you can usually deduct
The form has lines for the common costs of running a small business — supplies, advertising, a portion of vehicle and home-office costs, insurance, subcontractors, and more. The rule of thumb is that expenses have to be reasonable and incurred to earn the income, and you should keep the receipts. Some costs (meals and entertainment, vehicle use, home office) have their own limits and calculations.
GST/HST is separate
The T2125 reports income tax. Once your self-employment revenue passes the CRA's small-supplier threshold (generally $30,000 over four calendar quarters) you may also have to register for and charge GST/HST — that's a separate obligation from this form. If you're near that line, it's worth checking where you stand.
Official CRA references
FAQ
No. It's part of your personal T1 return. Your net business income from the T2125 is added to your other income and taxed on your T1.
Generally, if you earned self-employment income you report it, even if it's small and even if you didn't get a slip for it. The amount doesn't change whether it's reportable — it changes how much tax it adds.
Roughly: professional income is from a profession that may have work in progress (like consulting or design engagements), business income is most other self-employment. If you have both, you file a T2125 for each. When it's unclear, we can help you classify it.
You can still claim reasonable expenses you can support. Part of what we do is reconstruct a clean set of business numbers from what you have, so you don't over- or under-claim.
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Other CRA forms
General information only, not tax advice. This is a copy of publicly available information about an official Government of Canada form; the form itself is published by the CRA. Verify details for your situation on canada.ca or with us.