Business Income Tax Return

Here’s what you need to know about completing and filing the T1 Canadian income tax return as a business.

Whether your business is a sole proprietorship or partnership, you use the same income tax return to file your business taxes that you use to file your personal income taxes in Canada – the T1 income tax form. If your business is a corporation, you have to file a T2 income tax return.

You are declaring all your income using this form, being income from a job and a business or income from more than one business.

You will need; your business number, social insurance number, a copy of the Canada Revenue Agency’s Business and Professional Income Guide, and all your business records.

Steps to fill out your T1 Canadian income tax form:

  1. Fill out the Identification section of the T1 income tax form.
  2. Figure out your total income to calculate your business income. To do this you will need to fill out a T2125: Statement of Business or Professional Activities form, which is included in your T1 income tax form package. A T2125 form must be filled out separately for each business.
  3. Use the appendix of the Business and Professional Income Guide to find your business’s industry code. Then fill out the identification section of the form.
  4. Use your business records to complete the Income and Expenses part of the Statement of Business or Professional Activities income tax form.
  5. Go to the Total Income section of your T1 income tax form. Near the end of the Total Income section titled “Self employment income” enter your gross and net business, professional, or commission income on the appropriate line.
  6. Back at the top of the Total Income section; enter all your other income on the appropriate lines. When you’ve finished working through this section, you’ll have calculated your Total Income, including your business income.
  7. Continue filling out the rest of the T1 income tax form.

After following these steps, you will have completed your business income tax return and it will be ready to be filed.


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