Form T2125 (Canada)
Quick definition
Canada's equivalent of Schedule C. Where self-employed Canadians report motor-vehicle expenses to the CRA.
Form T2125 is the Canadian equivalent of Schedule C. Self-employed Canadians use it to report business income and expenses, including motor-vehicle expenses, on their annual T1 personal tax return.
Where mileage goes
Motor-vehicle expenses are reported in Part 5 of T2125. The CRA uses tiered rates that change at 5,000 km per year. See the CRA rate breakdown for current numbers.
Required documentation
A complete logbook for the year, receipts for actual expenses (gas, insurance, maintenance), and odometer readings at the start and end of the year. See the CRA logbook requirements.
Related terms
Schedule C
The federal form self-employed workers use to report business income and expenses, including the mileage deduction.
Logbook Method
Keeping a 12-week sample log to establish business-use percentage. Used by CRA in Canada and ATO in Australia.
Cents per Kilometre
Australia's simplest mileage deduction method. A flat per-km rate up to 5,000 km per year.
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