Reporting Business Income as a Sole Proprietor

As a sole proprietor, you report income or loss on a T1 income tax and benefit return. You or your authorized representative must file a T1 return if:

- You have to pay tax for the year
- You disposed of a capital property or had a taxable capital gain in the year
- You have to make CPP/QPP payments on self-employed earnings or pensionable earnings for the year
- You want to access EI special benefits for self-employed persons
- You received a demand from the CRA to file a T1 return
- You are claiming a tax refund, a refundable tax credit, GST/HST credit or the Canada Child Benefit.
- You are entitled to receive provincial tax credits.

Note that you may need to include financial statements or other forms that may be applicable to your tax situation. These forms may include Form T2125, Statement of Business or Professional Activities, Form T2042, Statement of Farming Activities or Form T2121, Statement of Fishing Activities.

If you are self-employed and need help filing your tax return, please contact us at KD! Our experts will be happy to help you out!

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