A Business Checklist For Personal Tax Return (T2125 Statement of Business or Professional Activities)
Preparing your own tax returns if you’re a small business owner or self-employed can be time-consuming, difficult, boring and incredibly tough if you are a newbie, especially if paperwork isn’t really your thing. You want to get back to the good stuff, which in your case, is running your business. A tax professional can help you avoid errors and guarantee your returns are done appropriately. To help you, the team at M.O.E. Commercial Accounting Network Inc has created a checklist that lists all the information and documents you need to file your return.
The T2125 form is used to report your business income and expenses, including self-employed commission sales. It is a schedule that goes along with your individual income tax return.
Your net business income is posted to your general income and benefit return and included in your taxable income. You must complete a separate T2125 for each business. The T2125 form is designed to lead you through the process of calculating your “true” business income, in that what is left when you have taken away your business expenses from the original (gross) amount you made. The point of the T2125 is to take all of the business income you earned and subtract all of your relevant business expenses in order to come up with your net business income (or loss).
Business income
You have business income when you do an activity for profit. It includes selling a product and providing a service. Business income includes sales, commissions or fees. You may or may not get a T-slip indicating that income.
Professional income
It is the same as business income, except that you are paid as a member of an officially recognized profession that has a governing body (i.e. engineer, health professional, lawyer, accountant, etc.)
Information you need to provide:
- Name and address of the business
- Business # if you have one
- Fiscal period – From and to (year, month, day)
- Indicate if it is your final year of business
- Indicate on summary if totals include H.S.T. or not
- Business income and or professional income
Once you have recorded your business and/or professional income, you would then need to calculate and report any relevant business expenses.
List of expenses:
- Advertising
- Meals and entertainment (Please make a note of who you are meeting with during these outings)
- Bad debt
- Insurance
- Interest and bank charges (If you have a business bank account)
- Business taxes, licenses and memberships
- Office expenses
- Office stationery and supplies
- Professional fees (Including legal and account fees)
- Management and administration fees
- Rent (Office)
- Repairs and maintenance
- Salaries, wages, and benefits (Including employer’s portion)
- Property taxes
- Travel expenses
- Utilities (List if the office is not in the home)
- Cell phone (% used for business if personal)
- Fuel costs (Except motor vehicles)
- Delivery, freight and express
Business use of home
- Square footage of home
- Square footage of the office in the home
- Heat
- Electricity
- Insurance
- Maintenance
- Mortgage interest (Copy of mortgage statement)
- Property tax (Copy of Final tax bill)
- Other expenses (Specify)
Motor vehicle expenses
- Year and make of vehicle (supply purchase papers)
- K.M. driven in the tax year to travel to earn business income
- Total K.M. driven in the tax year
- Fuel and oil
- Interest
- Insurance
- License and registration
- Maintenance and repairs
- Leasing costs
- Other expenses (Specify)
Miscellaneous
- Ending inventory, if any
- Purchases made during the year
- Direct wage costs
If you are a new client of ours, you will have to provide us with the prior year’s tax return, including the following:
- T2125 Statement of Business or Professional Activities
- Notice of assessment
- C.C.A. schedule
- Auto schedule
All personal information, including;
- D.O.B. (Date of birth)
- Marital status
- Dependents name and D.O.B.
Detail for other partners, if any:
- Name and full address
- Social Insurance Number
- % of the partnership
P.S. Indicate if H.S.T. is registered or not. If yes, then provide the documents.
If you are looking for accountants and bookkeepers in Timmins, Ontario, reach out to us at M.O.E. Commercial Accounting Network Inc. Our mission statement is to assist our clients in obtaining “Maximum Operating Efficiency in order to derive the profits they are entitled to.” Income tax clients were a natural complement to the growth of the Company. Our staff is proficient in various accounting software, including Sage50, Sage300, and QuickBooks, both on desktop and on the Cloud. We currently have five staff members who are certified with QuickBooks online. Our services include monthly, quarterly and annual bookkeeping, payroll services, budgeting and grant applications, online review for bookkeeping services, business consulting, completion of government reports, provision of management reports and income tax returns. We offer our services to clients across Timmins, Cochrane, Val Gagne, Matheson, Iroquois Falls, Foleyet, Gogama, and Moosonee, Ontario.
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