The Friendly Guide to Your T2125

March 21, 2015


A T2125 is a tax form you have to fill out to claim your business or professional activities, so most non-incorporated, service-based sole proprietors have to fill one out.

The form can be a little daunting but there’s no need to stress. Here you’ll find a line-by-line break-down of the form. You can access the T2125 form below along with information on each section.

This is intended as a guide only, and links to the CRA’s full instructions have been included. Since each business is unique if you have any specific questions it is always best to talk to an accountant.

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Identification
Your Name
Your Social Insurance Number
Business Name
Account Number
Business Address
City
Postal Code
Fiscal Period
Was 2014 your last year of business?
Main product or service
Industry Code
Tax Shelter Identification Number
Partnership Number
Your percentage of the partnership
Internet Business Activities

Business Income VS Professional Income

Part 1 – Business income
Line A
Line i
Line B
Line ii
Line iii
Line iv
Line C

Part 2 – Professional income
Line D
Line i
Line E
Line ii
Line iii
Line iv
Line v
Line F

Part 3 – Gross business or professional income
Line 8000/Line G
Line 8290
Line 8230
Line H
Line 8299

Part 4 – Cost of goods sold and gross profit
Line I
Line 8300
Line 8320
Line 8340
Line 8360
Line 8450
Line 8500
Line 8518
Line J
Line 8519

Part 5 – Net income (loss) before adjustments
Line K
Line 8521
Line 8523
Line 8590
Line 8690
Line 8710
Line 8760
Line 8810
Line 8811
Line 8860
Line 8871
Line 8910
Line 8960
Line 9060
Line 9180
Line 9200
Line 9220
Line 9224
Line 9275
Line 9281
Line 9935
Line 9936
Line 9270
Line 9368
Line L
Line 9369

Part 6 – Your net income (loss)
Line M
Line 9974/Line N
Line 0
Line 9943/Line P
Line Q
Line 9945/Line R
Line 9946

Part 7 – Other amounts deductible from your share of the net partnership income

Part 8 – Calculating business-use-of-home expenses
Heat
Electricity
Insurance
Maintenance
Mortgage
Property taxes
Subtotal
Minus
Subtotal
Capital cost allowance (business part only)
Amount carried forward from previous year
Line 1
Line 2
Business-use-of-home expenses availiable to carry forward
Line 3

Details of other partners

Details of equity
Line 9931
Line 9932
Line 9933

Area A – Calculation of capital cost allowance (CCA) claim
Column 1
Column 2
Column 3
Column 4
Column 5
Column 6
Column 7
Column 8
Column 9
Column 10

Area B – Details of equipment additions in the year
Column 1
Column 2
Column 3
Column 4
Column 5
Line 9925

Area C – Details of building additions in the year
Column 1
Column 2
Column 3
Column 4
Column 5
Line 9927

Area D – Details of equipment dispositions in the year
Column 1
Column 2
Column 3
Column 4
Column 5
Line 9926

Area E – Details of building dispositions in the year
Column 1
Column 2
Column 3
Column 4
Column 5
Line 9926

Area F – Details of land additions and dispositions in the year
Line 9923
Line 9924

Chart A – Motor vehicle expenses
Line 1
Line 2
Line 3
Line 4
Line 5
Line 6
Line 7
Line 8
Line 9/Line 10
Line 11
Line 12
Line 13
Line 14
Allowable motor vehicle expenses

Chart B – Available interest expenses for passenger vehicles
Line A
Line B

Chart C – Eligible leasing costs for passenger vehicles
Line 1
Line 2
Line 3
Line 4
Line 5
Line 6
Line 7
Eligible leasing cost

Identification:

Your Name – Your full legal name

Your Social Insurance Number – Your social insurance number

Business Name – Your business name

Account Number – Your 15 digit account number assigned to your by the CRA. If you don’t have you can see if you need or are eligible for one from the CRA.

Business Address – The address where your business is primarily run from or based out of

City and Province or Territory – The city and province/territory associated with your business address

Postal code – The postal code associated with your business address

Fiscal Period – The period your tax return covers. For the majority of small-businesses, this will be January 1st, 2014 – December 31st, 2014. It can be shorter than that if this is your first year in business but it cannot be longer than 12 months. Some self-employed individuals are eligible for different fiscal periods – if you’re unsure about your situation, you can check out the CRA’s website.

Was 2014 your last year of business? – If you ended your business in 2014, check the yes box. If you’re carrying on your business into 2015, check no.

Main product or service – What was the main service you provided or product you sold that produced your business income. For example, you could put “web design” or “massage therapy” here.

Industry code – A six digit code that represents the industry you work in. You can find a full list of codes here. For example, a caterer would use code 722320 or a photographer would use code 541920. If you can’t find a suitable profession of the list you can use one of the codes from a larger database maintained by Stats Canada.

Tax Shelter Identification Number – If you have a tax shelter, include its identification number on this line. For more information about tax shelters check out the CRA’s website.

Partnership business number – If you have a partnership business number enter it on this line. You would have received the number on your T5013 slip

Your percentage of the partnership – Enter your percentage of the partnership on this line. For more info about partnerships see the CRA’s guide.

Internet Business Activities – If your business has any online presence, you would want to include the number of sites you maintain as well as their URLs here. This could be anything from an online store, to a website, to a blog, to a Yelp listing. If these sites generate income for you, you’ll also need to specify what percentage of your income comes through them.

 

Business Income vs Professional Income

Business Income is any money you’ve received from the sale of goods, commissions, or fees. Generally, if you are inventory-based, you report your business income.

Professional income, on the other hand, is any money that you receive that is considered a professional fee.  As a professional you income usually includes the value of any work-in-progress.

Part 1 – Business income

Tick the box if you have business income. If you are going to claim professional income, leave this section blank. If you are claiming both, you must fill out two separate T2125s. For more information check out the CRA’s website.

Line A – Enter the total amount of money you collected as business income this year. Include any sales tax you collected as well.  The CRA goes into greater detail about how to count barter transactions if that applies to your business.

Line i – Enter the total amount of GST, HST, provincial sales tax, returns, discounts, allowances, and sales tax adjustments that were included in the total on Line A.

Line B – The amount on Line A minus the amount on Line i.

Line ii – If you use the Quick Method to handle your GST/HST remittances, you have to fill out this section. Otherwise you can leave it blank. If you are using the Quick Method, here you’ll need to enter the GST/HST collected on your eligible income.

Line iii – Multiply your total sales (including GST/HST) by your businesses remittance rate. If you’re not sure which rate to use, the CRA has a guide.

Line iv – The amount on Line ii minus the amount on Line iii

Line C – The amount on Line plus the amount on Line iv. If you don’t use the Quick Method and Line iv is blank, enter the amount of Tick the box if you have professional income. If you claimed business income, leave this section blank. If you are claiming both, you must fill out two separate T2125s. For more information check out the CRA’s website.

Line D – Total all of the money you received this year for professional services, regardless of when you actually provided the service.

(For example, any invoices you collected this year, even if you actually performed the service last year)

PLUS

Total of all outstanding invoices at the end of the tax year for services provided during that tax year

(For example, any invoices you sent this tax year, for services you performed this tax year, that you have not collected on as of the end of this tax year)

PLUS

The value of any work-in-progress from the end of the tax year for which you haven’t received any payment during the year

(For example, the value of any projects you were working on as of year-end (but have not completed and billed for), that you haven’t received any payment for as of year-end)

MINUS

All outstanding invoices at the end of your previous tax year

(For example, any outstanding invoices that you had at the end of your previous tax year that you would have included on your previous taxes)

MINUS

The value of any work-in-progress that was included as a professional fee at the end of your previous tax year.

Note: If you are an accountant, a dentist, a lawyer (including a notary in Quebec), a medical doctor, a chiropractor or a veterinarian you can choose to exclude your work-in-progress when calculating your income.

(For example, the value of any work-in-progress that you had at the end of your previous tax year that you would have included on your previous taxes)

For more info, check out the CRA’s guide

Line i – Enter the total amount of GST, HST, provincial sales tax, returns, discounts, allowances, and sales tax adjustments that were included in the total on Line D You also want to include any Work-In-Progress totals that you chose to exclude from Line D.

Line E – The amount on Line D minus the amount on Line i

Line ii -If you use the Quick Method to handle your GST/HST remittances, you have to fill out this section. Otherwise you can leave it blank. If you are using the Quick Method, here you’ll need to enter the GST/HST collected on your eligible income.

Line iii – Multiply your professional fees (including GST/HST) by your businesses remittance rate. If you’re not sure which rate to use, the CRA has a guide.

Line iv – The amount on Line ii minus the amount on Line iii

Line v – If you opted to exclude your work-in-progress from your total last year you would want to include that total here.

Line F – The amount on Line D plus the amount on Line iv and the amount on Line v. If either Line iv or Line v are blank, treat them as zeros.

Part 3 – Gross business or professional income

Line 8000/G – If you filled out Part 1, enter the amount on Line C here. If you filled out Part 2 enter the amount on Line F here. Check out the CRA for more details.

Line 8290 – Enter any reserves from your previous tax year. If you’re unsure wether this applies to you, the CRA has details.

Line 8230 – This is where you would include any other income you received that hasn’t been accounted for elsewhere. For example, you could include a bad debt you previously wrote off that you collected this year or any prizes you won because of your business activities. For more info about what you can include here, see the CRA’s website.

Line H – The amount on Line 8290 plus the amount on Line 8230. If either are blank, treat it as a zero.

Line 8299 – The amount on Line G plus the amount on Line H

Part 4 – Cost of goods sold and gross profit

If you completed Part 1 and are claiming Business Income, you must complete this section. If you completed Part 2 and are claiming Professional Income, you can leave this section blank.

If you have already remitted your GST/HST do not include GST/HST in the amounts entered in this section.

Line I – Enter the amount from Line 8299 on Line I

Line 8300 – Enter the total value of your inventory at the beginning of the tax year. If this is your first year in business you can leave this blank.  If this is not your first year in business this should be the same value that you listed as your closing inventory value on last year’s tax return. For more info see the CRA’s website.

Line 8320 – Enter the value of all the purchases you made in order to resell or to use in the manufacturing of items to sell. Enter the net value (total purchases minus any discounts you received). If you ended up using any of your purchases for personal use (instead of business use) make sure you also subtract their value. Check out the CRA’s website for more information.

Line 8340 – Include the wages paid to any employees who work directly in the manufacturing of your goods. Do not include any indirect wages, any salary paid to you or a partner, or any withdrawals you have made from the business. The CRA has more details.

Line 8360 – Enter the cost of any subcontractors you hired to perform tasks related to the product you sell.

Line 8450 – Any other expenses you incurred that directly relate to the purchase or production of goods to sell.

Line 8500 – Enter the total value of your inventory at the end of the tax year. If this is your first year in business the CRA gives you two options for assigning a value to your inventory. You can use either option but you have to use it consistently.

  • Fair Market Value – you would assign a value your entire inventory by the price you would pay to replace an item or the amount you would get if you sold an item
  • Value individual items in your inventory – you would assign a value to each item at their fair market value or their cost, whichever is less. The cost includes the purchase price of the item as well as any expenses incurred to bring the item to your business location and to put it in a condition so it is usable to your business.

For more information check out the guide published by the CRA.

Line 8518 – Add the amounts on Line 8300, Line 8320, Line 8340, Line 8360 and Line 8450. Take the total and subtract the amount on Line 8500. Enter the result on Line 8518.

Line J – Enter the value of Line 8518 on Line J

Line 8519 – The amount on Line I minus the amount on Line J.

Part 5 – Net income (loss) before adjustments

If you have already remitted your GST/HST do not include GST/HST in the amounts entered in this section.

Line K – If you claimed business income, enter the value from Line 8519 in Part 4. If you claimed professional income, enter the value from Line 8299 in Part 2.

Line 8521 – Enter the amount you spent on advertising your business. There are limits on the amount you can claim for advertising in periodicals – check out the CRA for details.

Line 8523 – Enter the amount you spent on meals and entertainment. You can claim 50% of food, beverage, and entertainment expenses you incur in the course of doing business. You can claim whichever of the two is less:

  • 50% of the actual amount incurred for the expenses
  • 50% of an amount that is reasonable in the circumstances

For more information on some of the intricacies of meal and entertainment expenses, check out this article from the CRA.

Line 8590 – You can enter any bad debts as long as long as your determined that it was a bad debt this year and you have already included the receivable as income. The CRA has more info about Bad Debts.

Line 8690 – You can claim any commercial insurance premiums from any buildings, machinery, and equipment you use in your business. If you have insurance premiums relating to your vehicle you would want to include it as a motor vehicle expense, not here. If you work from home and have home insurance, that would be claimed as a business-use-of-home expense. Generally life insurance cannot be claimed. For more information about which insurance premiums you can claim see the CRA’s guide.

Line 8710 – Enter the amount of interest paid on money borrowed for business purposes. Depending on the type of interest incurred or the type of loan it applies to, different rules apply. If you have interest you would like to claim, you are encouraged to read up on what the CRA has to say about interest expenses.

Line 8760 – Enter the amount you paid for any annual licenses or business taxes you incurred to run your business. You can also claim any annual dues or membership fees in a trade or commercial association. That being said, you cannot deduct membership or initiation fees is the club’s main purpose is dining, recreation, or sport.

Line 8810 – Enter the amount you spent on office expenses. Office expenses are any smaller items you purchased for use in your office, but were only used during this tax year. For example stamps, paper, and staples would be considered an office expense. Desks, chairs or even a stapler would be considered capital costs and could not be included here.

Line 8811 – Enter the amount you spent on supplies that your business uses indirectly to provide goods or services. For example, cleaning products a plumber uses would be included here.

Line 8860 – Include any professional fees you paid here, including consulting fees. You can include any accounting or legal fees you paid to get advice with record keeping, as well as any fees you incurred getting help prepping your tax return. For the nitty gritty about what other fees do or don’t qualify, check out the CRA’s website.

Line 8871 – This is where you would include any management and administration fees you’ve incurred. This could include things like bank charges but does not include salaries, property taxes, or rent.

Line 8910 – This is where you would include any rent you pay for your business, including any office space you rent. If you work out of your home, even if you rent your home, you would include that as a Business-use-of-home expense.

Line 8960 – Include the cost of any repairs to property you own that you use for business. This can include things like computer repairs or fixing a clogged toilet in your office space. You cannot deduct the value of your own labor though. If the repair was done to your home, you would want to include that expense as a Business-use-of-home expense instead of here. For more information check out the CRA’s website.

Line 9060 – If you have employees you can include their wages here. Do not include any wages that you included in your cost of goods sold or subcontracts. You should also not include owner’s draw or your own (or your partner’s) salary. The CRA has more information.

Line 9180 – You can claim property tax you incurred for property used for business. If you work from home, you would want to include that as a Business-use-of-home expense and not here.

Line 9200 – Include the expenses from public transportation fares, hotel accommodations and meals from travel you took for business. Meals included here are still subject to the 50% limit, so you can only claim half the price of your meal expenses.

Line 9220 – You can deduct any utilities you paid for – including gas, oil, electricity, water, Internet and telephone – so long as they were used for your business. If you work from home, any utilities that are split between your home and your business should be claimed as a Business-use-of-home expense.

Line 9224 – Include any amounts spent on fuel (included gasoline, diesel, and propane), motor oil and lubricants used in your business. If any of these were purchased for a motor vehicle include them on Line 9281. If you work from home and any of the expenses were split between your home and your business, include them as a business-use-of-home expense.

Line 9275 – Here you can include the cost of any delivery, freight, or shipping costs related to your business.

Line 9281 – See Chart A

Line 9935 – If you made any purchases that don’t physically exist but give you a lasting economic benefit, the CRA classifies these as eligible capital property. An example would be a license with an unlimited term. These purchases are not all that common, but if you think you have an expense you can deduct here, check out the CRA’s guide on how to claim it properly.

Line 9936See Area A

Line 9270 – This is where you would include any business expenses that you didn’t claim anywhere else. Some common examples are computer leasing costs or convention expenses. Check out the CRA’s website for more information.

Line 9368 – Add the all of the amounts from Lines 8521 through 9270. Enter the total sum on Line 9368.

Line L – Enter the value of Line 9368

Line 9369 – The amount on Line K minus the amount on Line L.

Part 6 – Your net income (loss)

If you have already remitted your GST/HST do not include GST/HST in the amounts entered in this section.

Line M – If you received a T5103 Slip (Partnership Information Return) enter the amount on that slip here. If you didn’t receive a T5103 but are in a partnership, enter the portion of the amount on Line 9369 that represents your portion of the partnership. If you’re a sole proprietor, enter the total of Line 9369 on Line M.

Line 9974/Line N – If you received a GST/HST rebate for partners this tax year enter the amount that relates to your eligible expenses. Don’t include any portion of the rebate that relates to any capital costs.

Line O – Add the amount on Line M to the amount on Line N.

Line 9943/Line P – See Part 7

Line Q – The amount on Line O minus the amount on Line P

Line 9945/Line R – See Part 8

Line 9946 – The amount on Line Q minus the amount on Line R

Part 7 – Other amounts deductible from your share of the net partnership income (loss)

If you aren’t running your business as a partnership you don’t have to worry about this section. If you are part of a partnership, this is where you could claim any other expenses you incurred to earn your share of the partnership’s income. For example, you could claim any expenses related to using your personal vehicle for the business. Enter this amount on Line 9943. For more info see the CRA’s information website.

Part 8 – Calculating business-use-of-home expenses

This is where, if you run your business from home, you can calculate how much to claim for business expenses relating to your home. You can only make these claims if you use your home as your primary place of business or using the space to earn business income and on a regular basis to meet clients. For more details on the deductions you can claim from your home check out the CRA’s website.

The CRA has a great example of how to fill out this section, so if you want to see their mockup, check out their website.

Heat – Enter the total amount you spent on heating your home.

Electricity – Enter the total amount you spent on electricity for your home.

Insurance – Enter the total amount you spent on insurance premiums for your home.

Maintenance – Enter the total you spent on maintaining or repairs for your home.

Mortgage interest – Enter the amount spent on interest on your mortgage.

Property taxes – Enter the amount you paid in property taxes for your home.

Subtotal – Add all of the values above to come up with your subtotal.

Minus: Personal-use part – Now you have to figure out how much of the above was used for personal use. The CRA recommends doing this by area.

What you need to do is calculate the area of your home. You then need to figure out how much of your home is used for business and how much is used for personal use. So for example, if you had a 1000 square foot home you might calculate that you used 100 square feet for business, and 900 for personal use.

Next, to calculate your personal use portion of the expenses, you want to divide your personal area by your total area number and then multiply that total by your total expenses. So lets say you had $8000 in expenses, your calculation would look like:

900 ÷ 1000 x 8000 = $7200

The result is the Personal-use part of your expenses, and should be entered on thais line.

Subtotal – This next subtotal line is calculated by taking the total expenses and subtracting the personal-use part. In the example about, that would be $8000-$7200, meaning the subtotal would be $800.

Capital Cost Allowance (business part only) – If you have any capital costs associated with your home and it’s business use this is where you would include them. The CRA has a guide about capital costs.

Amount carried forward from previous year – If you filed taxes last year and had a carry-over amount from your business-use-of-home expenses include it here.

Line 1 – Take the previous subtotal you had (which was the business portion of your expenses) and add the capital cost allowance and the amount carried forward to it. Place the result on this line.

Line 2 – Enter the amount from Line Q in Part 6.

Business-use-of-home expenses available to carry forward – The value of Line 1 minus the value of Line 2. If your result is a negative number, just enter zero on the line.

Line 3 –  Enter either the value of Line 1 or Line 2 – whichever one is less. You’ll also want to enter this value on Line 9945.

Details of other partners

If you have partners and you do not have to file Form T5013SUM, you have to fill out the details of your business partners. If you don’t have partners, or you filled out  T5013SUM, you can leave this blank. If you’re not sure where you fit, check out the CRA’s website.

Details of equity

If you are in a partnership that has to file a partnership information return, you do not have to fill out this section.

Line 9931 – Enter the total of all amounts your business owed as of the end of the tax year. Examples can include unpaid loans, unpaid salaries, or taxes you owe. For more examples see the CRA’s guide.

Line 9932 – Total of all drawings you have made during 2014. A drawing is any withdrawal from the business by the proprietor and can include salaries or any personal use of business assets. For more information see the CRA’s guide.

Line 9933 – Any contributions of cash or other assets you added to the business during the tax year. The CRA has more information.

Area A – Calculation of capital cost allowance (CCA) claim

Column 1 – Enter the class number of your property. If you claimed a CCA (Capital Cost Allowance) last year you can check last year’s form for your class number. If this is your first year, the CRA provides a list.

Column 2 – If this is your first year claiming CCA, skip this column. Otherwise, take the value from column 10 of last year’s form. From it, subtract any investment tax credit you claimed or were refunded and any you carried back to a year before last year. Also subtract any GST/HST input tax credit for a vehicle you use less than 90% of the time for your business. The CRA has more details.

Column 3 – See Area B and Area C

Column 4 – See Area D and Area E

Column 5 – Add the value of Column 2 to the value of Column 3. Then from that total, subtract the value of Column 4.

Column 6 – First take the value in Column 3 and subtract the value of Column 4. Next, divide that total by 2. If the final result is negative, enter 0 in this box.

Column 7 – The amount in Column 5 minus the amount in Column 6

Column 8 – Enter the rate based on the class of property. If you are unsure of which rate to use, check out the CRA’s list.

Column 9 – Multiply the amount in Column 7 by the rate in Column 8. If your calculator doesn’t let you multiply percentages, divide the percentage by 100. Then multiply the decimal you get by the amount in Column 7.

This is the maximum value you can include in Column 9, but you can opt to claim less than that (not more though).

Add all of the values in Column 9 together and enter the total on Line 9936.

Column 10 – The amount in Column 5 minus the amount in Column 9.

Area B – Details of equipment additions in the year

You only need to fill out this section if you need it for Column 3 in Area A. Equipment is considered any items you acquire to use in your business to earn income or for maintenance. A lawn mower, a server, or a cement mixer would all be considered equipment.

Column 1 – Enter the class number for your property. If you’re unsure which class number to use, check out the CRA’s list.

Column 2 – Enter any details of the property that you’re adding – what type of property is it and why did you add it to your business.

Column 3 – Enter the amount you spent to acquire the equipment.

Column 4 – Enter the portion of the equipment that is used for personal use. For example, if you purchase a laptop, for $500, that you use for work but also use on the weekends for personal use, you would need to enter an amount here. If you calculate that your laptop is used for personal use 30% of the time, then you would calculate that 30% of $500 is $150. Therefore you would enter $150 in Column 4 since that is the personal part of the cost.

Column 5 Column 3 minus Column 4. Enter this value in Column 3 of Area A.

Line 9925 – Add all of the values in Column 5 together.

Area C – Details of building additions in the year

Column 1 – Enter the class number for your property. If you’re unsure which class number to use, check out the CRA’s list.

Column 2 – Enter any details of the property that you’re adding – what type of property is it and why did you add it to your business.

Column 3 – Enter the amount you spent to acquire the building.

Column 4 – Enter the portion of the building that is used for personal use. For example, if you purchase a building, for $50,000, that you use for work but also use on the weekends for personal use, you would need to enter an amount here. If you calculate that your building is used for personal use 30% of the time, then you would calculate that 30% of $50,000 is $15,000. Therefore you would enter $15,000 in Column 4 since that is the personal part of the cost.

Column 5Column 3 minus Column 4. Enter this value in Column 3 of Area A.

Line 9927 – Add all of the values in Column 5 together.

Area D – Details of equipment dispositions in the year

You need to fill out this section if you sold or otherwise got rid of any equipment this year.

Column 1 – Enter the class number for your equipment. If you’re unsure which class number to use, check out the CRA’s list.

Column 2 – Enter any details of the equipment that you disposed of – what type of property was it and what was it used for

Column 3 – Enter the proceeds you received when disposing of the equipment. For example, if you sold a van that you used for your business, enter the amount you received for the van. If your proceeds were higher than the capital cost of the equipment, enter the capital cost. For more information check out the CRA’s guide.

Column 4 – Enter the portion of the equipment’s sale price that was personal. For example, if you sold a laptop, for $500, that you used for work but also used on the weekends for personal use, you would need to enter an amount here. If you calculate that your laptop was used for personal use 30% of the time, then you would calculate that 30% of $500 is $150. Therefore you would enter $150 in Column 4 since that is the personal part of the proceeds.

Column 5 – The amount in Column 3 minus the amount in Column 4. Enter this value in Column 4 of Chart A.

Line 9926 – Add all the values in Column 5 together

Area E – Details of building dispositions in the year

You need to fill out this section if you sold or otherwise got rid of any buildings this year.

Column 1 – Enter the class number for your building. If you’re unsure which class number to use, check out the CRA’s list.

Column 2 – Enter any details of the building that you disposed of – what type of property was it and what was it used for

Column 3 – Enter the proceeds you received when disposing of the building. For example, if you sold an office that you used for your business, enter the amount you received for the office. If your proceeds were higher than the capital cost of the equipment, enter the capital cost. For more information check out the CRA’s guide.

Column 4 – Enter the portion of the equipment’s sale price that was personal. For example, if you sold a building, for $50,000, that you used for work but also used on the weekends for personal use, you would need to enter an amount here. If you calculate that your building was used for personal use 30% of the time, then you would calculate that 30% of $50,000 is $15,000. Therefore you would enter $15,000 in Column 4 since that is the personal part of the proceeds.

Column 5 – The amount in Column 3 minus the amount in Column 4. Enter this value in Column 4 of Chart A.

Line 9928 – Add all the values in Column 5 together

Area F – Details of land additions and dispositions in the year

If you either acquired or disposed of land during this tax year you have to fill this section out. Otherwise you can leave it blank.

9923 – Enter the total cost of all land acquisitions you made this tax year

9924 – Enter the total proceeds from all land that you disposed of this year.

Chart A – Motor vehicle expenses

Line 1 – Enter the number of kilometres that you drove during the tax year for business purposes.

Line 2 – Enter the total number of kilometres that you drove during the tax year, including business kilometres and any personal kilometres.

Line 3 – Enter the total amount you spent on fuel and oil for your vehicle, not just the business portion.

Line 4 – See Chart B

Line 5 – List the total amount spent on insurance for your vehicle, not just the business portion.

Line 6 – Enter the total amount spent on the licence and registration for your vehicle, not just the business portion.

Line 7 – Enter the total amount spent on maintaining and repairing your vehicle, not just the business portion

Line 8 – See Chart C

Line 9/Line 10 – Any other expense for your vehicle that weren’t included anywhere else. For more information on what is and is not an acceptable expense you can check out the CRA’s website.

Line 11 – Add all of the amounts on Lines 3 through 10.

Line 12 – Divide the amount on Line 1 by the amount on Line 2. Multiple the result by the amount on Line 11.

Line 13 – Enter the total amount you spent on parking. Only include parking expenses that correspond to business use, not personal use.

Line 14 – If you have any supplementary business insurance for your vehicle include that expense here.

Allowable motor vehicle expenses – Add the values on Line 12, Line 13 and Line 14. Enter this amount on Line 9281 as well.

Chart B – Available interest expenses for passenger vehicles

Line A – If you accumulated any interest for your vehicle you would include either the amount payable (accrual method of accounting) or the amount paid (cash method of accounting) in the tax year.

Line B – Calculate the number of days in the year for which interest was payable (accrual method of accounting) or the number of days in the year for which interest was paid (cash method). Multiply that number by $10.

Available interest expense – Enter either Line A or Line B, whichever value is less. Enter this value on Line 4 of Chart A as well.

Chart C – Eligible leasing costs for passenger vehicles

Line 1 – The total amount you spent to lease you vehicle in the 2014 tax year.

Line 2 – The total amount you have deducted before this tax year for the vehicle.

Line 3 – The total number of days you have been leasing the vehicle

Line 4 – Manufacturer’s list price of the vehicle

Line 5 – Depending on which province you live in, you need to calculate what $35,294+GST(5%)+PST or $35,294+HST is. Then look at your amount you recorded on Line 4. Choose whichever number between the two is higher, and multiply it by 85%.

Line 6 – Depending on your province you first need to calculate what $800+GST(5%)+PST or $800+HST is. Then multiply that result by the amount you entered on Line 3. Divide that result by 30. Finally, take that result and subtract the amount you entered on Line 2.

Line 7 – Depending on your province you first need to calculate what $30,000+GST(5%)+PST or $30,000+HST is. Multiply that by the amount entered on Line 1. Divide that result by the amount entered on Line 5.

Eligible leasing cost – Either the amount on Line 6 or the amount on Line 7, whichever is less. Enter the lesser amount on Line 8 of Chart A.


about the author

Freelance Contributor Justine Grey empowers creative entrepreneurs to diversify their income with affiliate marketing. Join thousands in her AffiliateAce community getting doable affiliate experiments and action tips every week.