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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 →

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    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