STATEMENT OF BUSINESS ACTIVITIES
What is a Statement of Business Activities?
The Statement of Business Activities (T2125 tax form) is a vital tool for self-employed individuals. It empowers you to determine your business or professional income accurately. By utilizing this form, you can assess your financial standing, claim appropriate deductions, and manage your taxes efficiently.
As a self-employed person, you have control over your work schedule, methods, and equipment. You bear the costs of rentals, maintenance, and operating expenses. Additionally, integrating your client’s activities into your own business activities demonstrates your entrepreneurial spirit.
On the other hand, if your employer dictates when, where, and how you work, sets your hours and salary, supervises your tasks, and evaluates your performance, you are considered an employee.
Why Do Lenders Require A Statement of Business Activities?
Lenders recognize the importance of the Statement of Business Activities when assessing loan applications. This document helps identify potential write-offs that can be added back to your income. By calculating your gross income and deducting business expenses such as advertising, rent, home office costs, and motor vehicle expenses, you determine your net income accurately.
Where Can I Find My Statement of Business Activities?
Your T1 general form, which includes the Statement of Business Activities, can typically be found in your tax file. However, you can also obtain or complete it through various channels. Consider reaching out to an accountant, a trusted tax company like H&R Block, or the individual who filed your taxes on your behalf.
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