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.
Budget 2026: one personal deadline, May 15 for filing and paying, is proposed from the 2027 tax year (first deadline May 15, 2028). Your 2026 return is unchanged: file by June 15, 2027 if self-employed, pay by April 30, 2027. The proposed May 15 deadline.
Most T2125 trouble is in what was claimed rather than in the arithmetic. See how a self-employed return is prepared, or ask about one expense.
When is my self-employed return due?
Self-employed filers get until June 15 to file, but not to pay. The date appears straight away.
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On this page
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 to have ready before you file
The delay is usually assembling what the form asks for, not the form. Before starting, have the year's business or professional income, expense records for each line, opening and closing inventory if you sell goods, and vehicle and home-office proportions with their basis.
Gathering it first also surfaces the problems early: a missing account number, a balance nobody has actually calculated, a date that does not line up. There is still time to fix them, rather than finding them after a filing has been rejected.
What catches people out
The two dates are the trap. File by 15 June if self-employed, but pay by 30 April, or interest runs from May. A 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.
How it is filed
It forms part of the personal return rather than standing alone, so it is filed on the T1 deadline that applies, and a self-employed filer gets to 15 June to file while the balance is still due 30 April.
Either way, keep the signed copy with its working papers; a review asks for the file showing how the figures were reached.
Worked example
Priya is a self-employed graphic designer in Surrey with a December 31 year-end. Her 2026 T2125:
| Line | Figure |
|---|---|
| Gross income (Part 3C) | $92,000 |
| Software, phone and professional fees | $3,900 |
| Motor vehicle, business share from the logbook | $1,800 |
| Net income before home office | $86,300 |
| Business-use-of-home (line 9945), 12.5% of eligible home costs | $3,100 |
| Net income (line 9946) | $83,200 |
The home-office line cannot create or increase a loss; whatever cannot be used carries forward to the next year. CCA on her computer is optional and claimed only if it helps.
Where it lands on the return
Gross income goes to line 13499 of the T1 and net income to line 13500 (professional income uses 13699 and 13700). CPP on self-employed earnings is worked out on Schedule 8 and added to the balance owing, both halves. The $3,100 home-office claim sits on line 9945 of the T2125 itself, and the business-use percentages for the vehicle and the home are kept with the return, not sent with it.
Deadline and penalty
For the 2026 tax year the return is due June 15, 2027 where you or your spouse carried on a business, but the balance is due April 30, 2027; interest runs from May 1. Filing late with a balance owing costs 5% of the balance plus 1% for each full month, to 12 months; a repeat late filer within the look-back period pays 10% plus 2% a month to 20 months. GST/HST registration becomes mandatory once taxable sales pass $30,000 in a quarter or over four consecutive quarters. How a self-employed return is prepared, or what a BC sole proprietor files.
Common questions about T2125
When is the T2125 due?+
Is the payment deadline the same as the filing deadline?+
Do I file a separate business return?+
Should I incorporate instead?+
Where this comes from
- CRA — Completing Form T2125 (lines 13499 and 13500)
- CRA — Guide T4002, Chapter 3 (line 9945 business-use-of-home, line 8523 meals)
- CRA — Late-filing penalty: 5% plus 1% a month, repeat 10% plus 2%
- CRA — 2027 tax deadlines for businesses and self-employed individuals
- CRA — T2125 form page
- CRA — Filing due dates for the personal return
General information current as of , not advice for your situation. Elections are unforgiving about dates — confirm yours before you file. Please speak with a CPA about your circumstances.
Related reading
- 2026 personal tax brackets
- Incorporating versus staying a sole proprietor
- When incorporating starts to pay
- All CRA forms we cover
Other CRA forms
Who does this work
T2125 is part of a T1, not a return of its own. If the business is growing, the more useful question is usually whether it should still be on a T2125 at all.
If that is where you are, the service page for file a personal return with business income sets out what the engagement covers and how it is quoted.
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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Every line on a T2125 is a total from somewhere, and the form is only as good as the records behind it — bookkeeping that produces the figures the form asks for is the other half of the job.
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