Q: What is T2125 and what is the deadline for income tax filing for self-employers?
A: T2125 is a form called Statement of Business or Professional Activities. Self-employers are required to report T2125 as part of their personal tax filing. Deadline for income tax filing for self-employers is June 15 of each year. However, it is recommended that self-employers file tax before April 30th since any tax owing after April 30 attracts interest (i.e. you will be required to pay tax owing plus interest if you have tax owing as of April 30). This year tax owing payment deadline changed to August 31, 2020.
Q: I am a new self-employer, which deduction I can claim in my T2125 form?
A: Generally, you can deduct the following business related expenses:
- Cost of Goods Sold (eg. Subcontracts, purchases)
- General Operational Expenses (eg. meals and entertainment, membership, professional fees, salaries and wages, travel, telephone and internet)
- Business use of car (eg. fuel, car insurance, maintenance and repair)
- Business use of home office (eg. home insurance, mortgage interest, property tax, utilities)
- Capital cost allowance of capital assets (eg. laptop, equipment, iphone, ipad, car)
Every business is different, please talk to our consultant so that we can help you for the following:
- Provide you a customized expenses list for your business for income tax purposes
- Determine percentage of business use of car
- Determine percentage of home office
- Calculate Capital cost allowance
- Review your numbers to do technical adjustments
Q: I was with another accountant last year. This year I want to go to you. What documents I shall bring when I come?
A: Please bring a copy of previous year T2125 and previous year notice of assessment, in addition to your current year slips, forms, numbers, etc.