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 to have ready before you file
Most of the delay on these is not the form, it is assembling what the form asks for. Have the business or professional income for the year, the expense records behind each claimed line, the inventory position at both ends of the year if goods are sold, and the vehicle and home-office proportions with the basis for each to hand before starting.
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 — while there is still time to fix them rather than after a filing has been rejected.
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.
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.
Whichever route applies, keep the signed copy and the working papers behind it together. An election is only as defensible as the file that shows how the figures in it were arrived at, and that file is what a review asks for rather than the form itself.
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 — T2125 form page
- CRA — Filing due dates for the personal return
- CRA — Penalty for accepting a late, amended or revoked election
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.
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.
Email us about T2125Have a question about this?
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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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