If you do something regularly hoping to make money, the CRA calls it a business — registered or not. Form T2125 turns that work into one number, net income, and the whole job is keeping the gross honest and capturing the costs as they happen. The net takes care of itself.
Do I have a business?
Sooner than you think. There is no registration to fail, no card to carry, and no minimum to clear. If you sell on a marketplace, drive for a platform, tutor, or freelance — regularly, hoping for a profit — that is business income. It does not matter what the platform calls you. "Seller", "partner", "creator": the CRA reads them all the same way.
Two things people get wrong. First, small does not mean invisible. Every dollar counts, from the first one, and platforms now report what they pay you to the CRA. Second, the threshold you may have heard about is a GST/HST registration rule, not permission to skip reporting income. Clearing out the garage once is not a business. Doing it every weekend with an eye on the margin is.
How T2125 works
T2125 is a single form that files with your regular return. Gross income goes in at the top. Your costs come off below it, sorted into the CRA's expense categories. What is left is net income — one number that rides onto your T1 and is taxed with everything else. A sole proprietor files no separate business return.
Two tests decide whether a cost belongs: it must be reasonable, and you must have spent it to earn the income. The categories are how the CRA reads your year, and the full list follows this page. You don't file receipts — you file totals. The receipts are the proof behind them. So capture each cost the moment it happens. Dossier reads the payee, the date, the amount and the tax, suggests a category on T2125, and you confirm. By filing time the totals are already added up, with the evidence attached.
Working from home
A share of your home costs can count when the workspace is where you mainly do the work, or where you meet clients on a regular basis. The share usually follows the size of the space — the part of the home the work takes up.
That share is settled at filing time. What you keep all year is the bills behind it: the full amounts, for the whole home. Capture them as they arrive and file them to the workspace category; the split comes later. One limit to know: workspace costs cannot push the business below zero. Anything extra waits for a future year.
GST/HST
GST/HST is a second, separate obligation. Once your worldwide revenues pass a threshold the CRA sets, registering stops being optional: you charge GST/HST on your sales and send it in. Below the threshold you can still register by choice, and it can pay off — a registrant can often recover the GST/HST paid on business purchases.
Registered or not, keep the tax visible. Every business receipt shows the GST/HST you paid, and Dossier reads it off each one. If you register later, the habit is already in place. If you never do, the tax simply stays part of the cost.
The vehicle logbook
A vehicle is claimed by share of use: the kilometres you drove for the business, out of all the kilometres you drove that year. The logbook is the evidence the CRA expects — each business trip with its date, destination, reason and distance, plus the odometer at the start and end of the year.
Without the kilometre record, the rest is worth little. Fuel, insurance and repairs count only in proportion to the business share, and the logbook is the only thing that proves the share. Keep it as you go. A logbook is boring right up until the CRA asks for it — then it is the best thing you own.