If you’re self-employed, you probably earned income from a business that you operate either as a sole proprietor or with someone else as your partner. It could include income from a business, profession, commission sales, farming, or fishing activities.
The Canada Revenue Agency (CRA) says that business income is income from any activity you carry out for profit or with a reasonable expectation of profit. A business can be:
- a profession
- a calling
- a trade
- a manufacture
- an undertaking of any kind and
- an adventure or concern in the nature of trade
Note: If you’re incorporated (if you have the words Ltd., or Co. after your company name) you have to file a T2: Corporation Income Tax Return. In Québec, you will also need to file a CO-17: Déclaration de revenus des sociétés. Unfortunately, you can’t do this type of return online with H&R Block’s tax software. However, we’d be happy to help you in one of our offices; please use our Office Locator tool to find the office nearest you!
If you’re filing a federal return, you will need to report your self-employment or business income on the following forms:
- T2125: Business and Professional Activities
- T2042: Statement of Farming Activities
- T2121: Statement of Fishing Activities
If you’re filing a Québec return, you will need to also report your self-employment or business income on the following forms:
- *TP-80-V : Business or Professional Income and Expenses
- All related and applicable federal forms (T2125, T2121, and/or T2042)
*Note: The TP-80-V is combined with the T2125 in H&R Block’s tax software so you only need to enter your business and professional income and expenses once!
Where do I claim this?
Follow these steps in H&R Block’s tax software to file your 2016 taxes:
- Under the PREPARE tab, click the LET’S TALK ABOUT 2016 icon.
- Click the checkbox labelled I worked for myself and then select the province or territory you were self-employed in from the drop-down menu.
- Scroll to the bottom of the page and click Continue.
- Click the EMPLOYMENT icon. You’ll find yourself here:
- Under the BUSINESS AND SELF-EMPLOYMENT heading, select the self-employment activity that represents your situation. You’ll have to complete all the forms that relate to your particular type of self-employment income.
- When you arrive at the page for your self-employment activity, enter your information into the tax software.
Where can I learn more?
- Business expenses (CRA website)
- Small businesses and self-employed (CRA website)
- Self-employed persons (Revenu Québec website)
- TP-80-V : Business or professional income and expenses (Revenu Québec website)
- TP-80.1-V : Calculation of business or professional income, adjusted to December 31 (Revenu Québec website)
- Line 164 – Business income (Revenu Québec website)
- Self-employed fisher (Revenu Québec website)