CRA form

T2125: Statement of Business or Professional Activities

Reviewed by EverStone CPA · August 2026

Quick answer: Form T2125 is how an unincorporated business reports income and expenses on a personal return. Self-employed returns are due 15 June, but any balance owing is still due 30 April — the two dates are not the same.

What the form is

T2125 is the Statement of Business or Professional Activities. The CRA describes it as the form used “to report either business or professional income and expenses”; it replaced the older T2124 and T2032, which split the two apart.

It is not a separate return. It is a schedule attached to your personal T1, which is why a sole proprietor has no corporate filing at all — the business income flows onto the individual’s return and is taxed at personal rates.

The form works through gross revenue, then cost of goods sold, then expenses by category, then capital cost allowance, and finishes at a net income figure carried to the T1.

Who files it

Sole proprietors and partners in a partnership — anyone earning business or professional income who has not incorporated.

Also anyone running a side business alongside employment. A T4 and a T2125 sit on the same return without difficulty.

The form at a glance

Item	Detail
What it is	A schedule to the personal T1 return, not a separate return
Who files	Sole proprietors and partners — unincorporated business
Filing due	15 June for a self-employed individual
Payment due	30 April — earlier than the filing date
Replaced	The former T2124 and T2032

What catches people out

The two dates are the trap. Self-employed individuals get until 15 June to file, but a balance owing is still due by 30 April. File on time and pay in June and interest has been running since the start of May. The later filing date is not a later payment date.

Everything on a T2125 is taxed at your personal marginal rate in the year it is earned. There is no ability to leave profit in the business and defer, which is the single largest structural difference from a corporation.

Capital cost allowance is optional here, as it is for a corporation. Claiming the maximum every year is not automatically right — in a low-income year the deduction may be worth more kept for later.

A late, amended or revoked election carries a penalty of the lesser of $8,000 and $100 for each complete month from the election’s original due date to the date the request reaches the CRA in a form it finds satisfactory. The CRA will generally not process the election until it is paid.

Common questions

When is the T2125 due?+

It goes with your personal return, which is due 15 June where you or your spouse or common-law partner carried on a business. Any balance owing is still due by 30 April.

Is the payment deadline the same as the filing deadline?+

No, and this is where people get caught. The return is due 15 June but the balance owing is due 30 April, so interest runs from 1 May on anything unpaid.

Do I file a separate business return?+

Not as a sole proprietor. The T2125 is a schedule to your personal T1 return, and the business has no return of its own.

Should I incorporate instead?+

It turns on whether you need all the profit personally. A corporation lets earnings be retained and taxed at corporate rates; a sole proprietorship taxes everything at your personal rate in the year earned, whether you spend it or not.

Where this comes from

General information current as of August 2026, not advice for your situation. Elections are unforgiving about dates — confirm yours before you file. Please speak with a CPA about your circumstances.

Filing one of these?

Elections are date-driven and unforgiving. Email us before the deadline rather than after — we quote the work in writing first.

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