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Editorial templates for Canadian self-employed individuals and sole proprietors. Copy any template into a document, fill in your details, and use it. Statute-cited and reviewed against current CRA guidance.
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Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact CRA. Read our editorial scope →
CRA Late Filing Appeal Letter
Request penalty relief under the CRA's Taxpayer Relief Provisions when late filing was caused by circumstances beyond your control.
Reference: Income Tax Act s. 220(3.1); CRA Information Circular IC07-1R1
[Your Name] [Your Address] SIN: [Your Social Insurance Number] Canada Revenue Agency Taxpayer Relief Coordinator [Your Tax Services Office] Date: [Date] Re: Request for Taxpayer Relief — Cancellation or Waiver of Penalties and Interest Taxation Year(s): [Year(s)] SIN: [Your Social Insurance Number] To Whom It May Concern, I am writing to request relief from penalties and interest assessed against me for the [Year] taxation year under subsection 220(3.1) of the Income Tax Act, in accordance with the criteria set out in Information Circular IC07-1R1. Circumstances: [Briefly describe the extraordinary circumstance — e.g. serious illness, death in the family, natural disaster, CRA processing delay, financial hardship. Be specific about dates and how the circumstance prevented timely filing or payment.] Supporting documentation enclosed: - [e.g. medical records, death certificate, insurance claims] - [Any correspondence with CRA] I have since brought my filing obligations up to date and have taken steps to ensure future compliance, including [describe e.g. engaging an accountant, setting up pre-authorized debit]. I respectfully request that the CRA cancel or waive the penalties and interest assessed for the period described above. Sincerely, [Your Signature] [Your Printed Name] [Phone Number] [Email]
Self-Employment Vehicle Log (T2125)
CRA requires a contemporaneous logbook to support vehicle expense claims on Form T2125. Use one row per business trip; record odometer at year-end.
Reference: Income Tax Act s. 18(1)(h); CRA Interpretation Bulletin IT-521R
Vehicle: [Make / Model / Year / Plate] Odometer at January 1: ________ km Odometer at December 31: ________ km Total kilometres for year: ________ km Date | Destination | Business purpose | Odo start | Odo end | KM (business) -----------|--------------------------|-----------------------------------|-----------|---------|--------------- YYYY-MM-DD | Client / supplier / site | Meeting / delivery / inspection | | | YYYY-MM-DD | | | | | YYYY-MM-DD | | | | | YYYY-MM-DD | | | | | YYYY-MM-DD | | | | | Year-end totals: - Total business km: ________ - Total km driven: ________ - Business-use percentage: ________ % Notes: - Commuting between home and a regular place of business is personal, not business. - Keep fuel, insurance, repairs, licence, and CCA records to support the actual-cost method. - The simplified per-kilometre rate is only available to employees claiming on a T2200, not self-employed individuals filing T2125.
T2125 Business Expense Checklist
Categorized list of common self-employment deductions, organized by T2125 line. Tick each category you have records for before filing.
Reference: Income Tax Act s. 9, 18; CRA Guide T4002
T2125 BUSINESS EXPENSE CHECKLIST Line 8521 — Advertising [ ] Online ads (Google, Meta, LinkedIn) — keep invoices [ ] Print, radio, signage [ ] Website hosting and domain Line 8523 — Meals and entertainment (50% deductible) [ ] Client meals — keep receipts, note who was met and why [ ] Conference / training meals away from your business location Line 8590 — Bad debts written off in the year [ ] Invoices previously included in income that are now uncollectible Line 8690 — Insurance [ ] Business liability, professional indemnity, content insurance [ ] Business-use portion of vehicle insurance Line 8710 — Interest and bank charges [ ] Business loan interest [ ] Business credit card and account fees Line 8760 — Business taxes, licences, memberships [ ] Professional body dues [ ] Trade licences, municipal business licence Line 8810 — Office expenses [ ] Stationery, postage, small office supplies Line 8811 — Office stationery and supplies Line 8860 — Legal, accounting, professional fees [ ] Accountant, bookkeeper [ ] Lawyer for business matters Line 8910 — Rent [ ] Studio, workshop, storage (not home — that's BIH below) Line 8960 — Repairs and maintenance Line 9060 — Salaries, wages, benefits (non-arm's-length must be reasonable) Line 9180 — Property taxes (commercial premises only) Line 9200 — Travel Line 9220 — Utilities (commercial premises only) Line 9224 — Fuel costs (commercial premises only — vehicle fuel goes to motor vehicle expenses) Line 9275 — Delivery, freight, express Line 9281 — Motor vehicle expenses (see vehicle log) [ ] Fuel, insurance, licence, repairs, CCA — apply business-use % [ ] Lease payments (capped — see T4002) Line 9936 — Capital Cost Allowance (CCA) [ ] Class 50 (computers) — 55% [ ] Class 10.1 (passenger vehicles) — 30% on cost up to ceiling [ ] Class 8 (furniture, equipment) — 20% Line 9945 — Business-use-of-home expenses (BIH) [ ] Calculate business-use % (room area ÷ total area, hours of use) [ ] Apply % to rent, utilities, internet, insurance, mortgage interest, property tax, repairs [ ] Cannot create or increase a loss — carry forward unused portion RECORDS TO KEEP (six years from end of tax year) - All receipts and invoices, paper or scanned - Bank and credit card statements showing business transactions - Mileage log (contemporaneous) - Home office floor plan and bill copies for BIH claim - CCA schedule (Schedule 8 on T2125)
CRA Instalment Reminder Tracker
Self-employed individuals must pay tax instalments quarterly if net tax owing exceeds $3,000 ($1,800 in Quebec). Use this worksheet to plan and track.
Reference: Income Tax Act s. 156, 156.1; CRA Guide P110
CRA QUARTERLY INSTALMENT TRACKER Due dates (each calendar year): March 15 | June 15 | September 15 | December 15 Who must pay instalments: You must pay instalments if your net tax owing was over $3,000 ($1,800 in Quebec) in the current year AND in either of the two prior years. Three calculation options — CRA accepts the lowest: 1. Prior-year option Prior year's net tax owing ÷ 4 = quarterly instalment Net tax owing [Year-1]: $ __________ ÷ 4 = $ __________ 2. Current-year option Estimate this year's net tax owing ÷ 4 Estimated current-year net tax: $ __________ ÷ 4 = $ __________ 3. No-calculation option (CRA's reminder amount) CRA mails reminders in February and August. Pay the amount shown — safe harbour applies even if you under-estimate, provided you pay on time. Q1 (March 15) reminder amount: $ __________ [ ] Paid on __________ Q2 (June 15) reminder amount: $ __________ [ ] Paid on __________ Q3 (Sept 15) reminder amount: $ __________ [ ] Paid on __________ Q4 (Dec 15) reminder amount: $ __________ [ ] Paid on __________ Safe harbour: Paying the CRA-reminded amount on the due date avoids interest, even if your actual tax bill turns out higher. The other two options expose you to instalment interest if you under-pay. Late instalments: Interest is compounded daily at the prescribed rate plus 4%. A penalty also applies if the interest exceeds $1,000.
Year-End Tax Planning Checklist (October to March)
A printable timeline of self-employment year-end actions, from October planning through the March RRSP deadline and April 30 / June 15 filing.
Reference: Income Tax Act s. 150, 146(5), 207.01
YEAR-END TAX PLANNING CHECKLIST — SELF-EMPLOYED (CANADA) OCTOBER — Plan ahead [ ] Review YTD income vs. expenses; project net tax owing for current year [ ] If headed above $3,000 net tax owing — set aside funds for first instalment [ ] Decide on large equipment purchases (Class 50, Class 10.1 — CCA pro-rated) [ ] Top up RRSP if cash flow allows (deadline is end of February next year) NOVEMBER — Compensation decisions (CCPC owners) [ ] Salary vs. dividend split for current year — review with accountant [ ] Declare bonus before year-end if you want a current-year deduction [ ] Pay yourself any salary owing before Dec 31 to claim deduction DECEMBER — Pre-year-end actions [ ] Make charitable donations by Dec 31 for current-year credit [ ] Sell loss-position non-registered securities to crystallize capital losses (settlement date must be in December — usually means trading by ~Dec 24) [ ] Pay Q4 instalment by December 15 [ ] Pay outstanding business invoices to bring into current-year expenses (if cash basis is permitted — most self-employed are accrual) [ ] Top up TFSA up to limit (current-year and any unused room) JANUARY — Records & RRSP/TFSA [ ] Reconcile bank, credit card, and merchant accounts to December 31 [ ] Confirm CCA schedule — note new additions and dispositions [ ] TFSA: new annual room ($7,000 for 2025) becomes available January 1 [ ] Confirm RRSP contribution room from latest Notice of Assessment FEBRUARY — RRSP deadline and slips [ ] RRSP contributions for prior-year deduction — last 60 days of February (March 3, 2025 was the deadline for 2024 contributions) [ ] T4 slips to employees due February 28 [ ] T4A slips to subcontractors due February 28 [ ] T5 slips for dividends paid by CCPC due February 28 MARCH — Pre-filing [ ] Q1 instalment due March 15 [ ] Compile all T-slips received (T4, T4A, T5, T5008, T3, T4RIF, T4RSP) [ ] T5018 (construction subcontractor payments) due — six months after fiscal year-end [ ] Schedule appointment with accountant if filing is delegated APRIL — Balance owing deadline [ ] Any 2024 balance owing — paid by April 30, 2025 (this applies even though self-employed return is filed June 15) JUNE — Self-employment filing deadline [ ] T1 return (with Form T2125) due June 15 — file even with $0 owing [ ] Q2 instalment due June 15 DEADLINE SUMMARY - Prior-year RRSP: 60 days after year-end (≈ March 1) - Balance owing: April 30 - T1 + T2125: June 15 - Instalments: March 15, June 15, September 15, December 15 - T4 / T4A / T5 slips: February 28 - T5018: six months after fiscal year-end