Form T2125 is where Canadian freelancers, contractors and sole proprietors report business income and expenses. This is the complete line reference — bookmark it, or skip the manual work entirely: our free generator fills the form from your numbers, and the categorizer sorts your bank transactions onto these exact lines.
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Income — line 8299
Line 8299 — Gross business or professional income. Everything you invoiced in the year (accrual basis: invoiced, not just collected), excluding any GST/HST you collected — that tax belongs to the CRA, not to your income. Business income flows through Part 3A, professional income through 3B; both land on 8299.
Expense lines, in form order
8521 — Advertising
Ads, promotion, finder's fees. Google/Meta ads, business cards, your mailing-list tool. Gotcha: ads in Canadian newspapers/TV/radio must meet Canadian-content rules to be fully deductible — the restriction doesn't apply to foreign websites, so online ads are generally fine.
8523 — Meals and entertainment
Client meals and entertainment at 50% of the lesser of what you paid and what's reasonable. The 50% haircut also applies to meals while travelling. Solo lunches at your desk don't qualify.
8590 — Bad debts
An invoice you already reported as income that has genuinely become uncollectible this year. You can't write off an invoice you never reported.
8690 — Insurance
Commercial policies: liability, E&O, business property. Home insurance for a home office goes on line 9945 instead; vehicle insurance goes into your line 9281 vehicle costs.
8710 — Interest and bank charges
Interest on money borrowed for the business + business account fees. Gotcha: interest on a passenger-vehicle loan is capped (CRA Chart B) — you can't always deduct all of it.
8760 — Business taxes, licences and memberships
Trade licences, annual professional dues, municipal business taxes. Not the place for software subscriptions (that's 8810) or income tax (never deductible).
8810 — Office expenses
Small consumables not tied to your workspace: pens, paper, stamps — and in practice, software subscriptions and SaaS tools. Gotcha: capital items (a desk, a filing cabinet, a laptop) are NOT office expenses — they're capital property claimed through CCA (line 9936).
8811 — Office stationery and supplies
Materials consumed providing your goods or services — the CRA's own examples are a veterinarian's medications and a plumber's cleaning supplies. Hardware-store consumables for client work fit here.
8860 — Professional fees (legal and accounting)
Your accountant, bookkeeper, lawyer — including fees for preparing this very return and your GST/HST filings. (Accountants charge roughly $350–$1,200 for a T2125 return; being organized is most of what you're billed for.)
8871 — Management and administration fees
Third-party management/admin fees. Most solo freelancers leave this at zero.
8910 — Rent
Rent for business premises — a studio, co-working membership, storage. Gotcha: rent for the business share of your HOME does not go here — that's line 9945.
8960 / 8963 — Repairs and maintenance
Labour and materials for minor repairs to income-earning property. You can't deduct your own labour, and capital-nature repairs go through CCA instead. Home-workspace repairs belong on 9945.
9060 — Salaries, wages and benefits
Gross pay + employer CPP/EI for actual employees. Gotcha: money you pay YOURSELF is never a salary expense here — sole proprietors take draws, which aren't deductible.
9180 — Property taxes
Property tax on business premises. Home property tax for a home office? Line 9945 again.
9200 — Travel expenses
Transportation fares, hotels, and meals while travelling for business (meals still limited to 50%). Local trips in your own car are line 9281, not travel.
9220 — Utilities (including telephone)
Telephone and utilities incurred to earn income. Gotcha straight from the guide: the BASIC monthly rate of your home phone isn't deductible — business long-distance on it is, and a separate business line or the business share of your cell plan is.
9275 — Delivery, freight and express
Couriers, shipping, postage for delivering your work or products.
9270 — Other expenses
Legitimate business costs that don't fit a named line — professional development and training that maintains skills for your current business commonly lands here.
9281 — Motor vehicle expenses (not including CCA)
Fuel, insurance, repairs, licence fees × your business-use percentage (keep a km log — it's the first thing the CRA asks for). The vehicle itself depreciates through CCA.
The totals everyone confuses
Line 9368 — Total expenses. The sum of all the expense lines above. Line 9369 — Net income (loss) before adjustments = line 8299 minus line 9368. They sit next to each other and get mixed up constantly — 9369 is a RESULT, not an expense total.
The back of the form
Line 9936 — Capital cost allowance (CCA). Depreciation on capital property (laptop, camera, vehicle, furniture) claimed by class through the CCA charts — you spread the cost over years instead of expensing it. Full walk-through: Area A and line 9936, decoded.
Line 9945 — Business-use-of-home expenses. The workspace share of rent or mortgage interest, utilities, home insurance, property tax, and maintenance. Two rules: the workspace must be your principal place of business (or used regularly for meeting clients), and 9945 cannot create or increase a loss — the excess carries forward to next year. Our generator applies the loss-limit automatically.
Line 9946 — Your net income (loss). The number that flows to your T1 and drives your tax and CPP. Want to know what it means in dollars? The tax calculator takes it from here.
Common line-number mistakes (we've seen every one in the wild)
- "Line 8220" does not exist. Telephone and utilities are line 9220. This phantom line circulates in templates all over the internet.
- 8963 is repairs, not travel. Travel is 9200. (8960/8963 = repairs and maintenance.)
- 9060 is employee salaries, not your phone bill — and never money you pay yourself.
- 9180 is property taxes, not motor vehicle — vehicle costs are 9281.
- 9369 is not "total expenses" — that's 9368; 9369 is net income before adjustments.
- Home-office amounts scattered on the wrong lines. Home rent, home property tax, home insurance, and workspace repairs all belong on 9945 — not 8910/9180/8690/8963.
Go deeper: part-by-part guides
This page covers every line number; these companion guides walk through how each section of the form actually flows:
- Part 3 — Gross business or professional income: amounts 3A→3N, GST/HST in and out, WIP for professionals, cost of goods sold, line 8299.
- Part 5 — Your net income (loss): 9369 → 9946, the partnership lines, and where the result goes on your T1.
- Part 7 — Business-use-of-home: who qualifies, the workspace percentage, and the line 9945 loss limit.
- Area A — Capital cost allowance: which class your laptop, software, and car belong to, the half-year rule, and line 9936.
Skip the manual mapping. Upload your bank CSV and get every transaction on the right line — or generate the whole form.
Categorize My Expenses → T2125 Generator →FAQ
Do I need a separate T2125 for each business?
Yes — one form per business or professional activity, and business vs professional income use different parts (3A vs 3B). Two distinct activities means two forms.
Where do software subscriptions go?
In practice line 8810 (office expenses) — they're consumable operating costs, not capital property. Big one-time purchases like a laptop go through CCA (9936) instead.
What's the difference between 8810 and 8811?
8810 is general office consumables not tied to your workspace (pens, stamps, software). 8811 is supplies consumed directly in providing your goods or services — the CRA's examples are a vet's medications and a plumber's cleaning supplies.
Can line 9945 create a loss?
No. Business-use-of-home expenses can only reduce your net income to zero; anything beyond that carries forward to claim against the same business next year.
Line descriptions follow CRA Guide T4002 (verified 2026-07-02). This reference is for planning and organization — not tax, legal, or accounting advice. Confirm with the CRA or a qualified professional before filing.