Common Mistakes Mortgage Agents and Brokers Make
These issues appear every year. If any are familiar to you, pay extra attention to the relevant section.
- Reporting commission income net of brokerage splits without documentation to support the gross amount
- Missing referral fees received from other agents, lawyers, or financial advisors. These are taxable income regardless of whether a T4A was issued
- Not deducting referral fees paid out to other agents or non-registrants. These are a business expense when supported by documentation (for example, an invoice or written fee agreement and proof of payment)
- Missing provincial licensing fees, renewal fees, and continuing education costs as business deductions (for example, FSRA fees in Ontario)
- No vehicle mileage log despite significant client driving. Without a contemporaneous log, the deduction is at significant CRA risk
- Claiming 100% phone without allocation for personal use
- Missing desk fees, administration fees, and technology fees charged by the brokerage
- Missing E&O insurance premiums as a business expense
- Not tracking marketing and lead generation costs: digital ads, client seminar materials, co-branded referral marketing, signage, CRM subscriptions
- Reporting income on a cash basis when deals funded in late December may need to be reported in 2025 under accrual accounting, depending on when the commission was earned
- Missing lender volume bonuses or trailer fees that are not captured on a T4A
- Common Mistakes Mortgage Agents and Brokers Make
- 01. Income and Receivables
- □ T4A slips from all brokerages (if issued)
- □ T4 slip (if you also had employment income in 2025)
- □ Commission statements from all brokerages for 2025
- □ Referral fee income received in 2025 (if applicable)
- □ Lender volume bonuses, trailer fees, or incentive payments (if applicable)
- □ Business bank statements (PDFs or CSV export) for 2025
- □ Year-end unpaid commissions (deals funded but commission not yet received as of December 31, 2025)
- □ Personal investment slips (if applicable)
- 02. GST/HST
- □ GST/HST registration status: confirm whether you are registered
- □ Breakdown of income by type: mortgage brokering commissions vs. other services (if applicable)
- □ GST/HST returns filed in 2025 (if registered)
- □ Not registered? Flag if you have income streams that may not qualify as exempt financial services
- 03. Shared Expenses (Allocation Required)
- □ Mileage log for business vehicle use in 2025
- □ Total kilometres driven in 2025: business and personal
- □ Vehicle expense receipts or annual totals by category
- □ Vehicle lease agreement or financing statement (if applicable)
- □ Home workspace details, size and use
- □ Rent receipts (renters) or mortgage interest details (homeowners)
- □ Utility bills for 2025 (annual totals or monthly statements)
- □ Internet bills, annual total and your estimated business-use percentage
- □ Mobile phone and business phone bills, annual total and business-use percentage
- □ Home insurance annual premium
- □ Property tax bill (homeowners only)
- □ Business-use percentage notes for all mixed-use assets
- 04. Direct Business Expenses
- □ Provincial licensing fees, renewal fees, and registration costs
- □ Continuing education receipts (provincially required and voluntary)
- □ E&O (errors and omissions) insurance premium
- □ Brokerage fees, desk fees, and administration fees paid to your brokerage
- □ Referral fees paid out in 2025 (if applicable)
- □ Mortgage association and industry membership fees
- □ Marketing and advertising expenses
- □ CRM, mortgage origination, and productivity software
- □ Mortgage rate comparison and lender research tools (if paid)
- □ General business software and office tools
- □ Hardware and equipment receipts (2025 purchases)
- □ Accounting and legal fees
- □ Business banking fees and wire transfer fees
- □ Meals and entertainment (business-related only)
- □ Client appreciation and gift expenses (if applicable)
- □ Business travel expenses (if applicable)
- 05. People and Payments
- 06. Year-End Position
- 07. Prior Year and Planning
- □ 2024 Notice of Assessment, and prior-year return copy if available
- □ Prior-year CCA schedule showing UCC balances by class (if available)
- □ RRSP contribution receipts, for the applicable window
- □ FHSA contribution receipts (if applicable)
- □ CRA instalment reminders and instalment payment confirmations (if applicable)
- □ Prior-year GST/HST notices, assessments, or adjustments (if registered)
- □ Access to CRA My Account (and My Business Account if GST/HST registered)
- □ Foreign property reporting (T1135): flag if applicable
- □ 2025 filing and payment deadlines acknowledged
- □ Any CRA letters related to your 2025 taxes
- 08. Digital Records and Audit Protection
01. Income and Receivables
The goal here is a complete picture of all commission income, referral arrangements, bonuses, and related receipts earned in 2025. Mortgage agents often have income from multiple sources: T4A slips from one or more brokerages, referral fees with no slip, and lender bonuses that arrive separately. All amounts must be reported regardless of whether a T4A was issued.
□ T4A slips from all brokerages (if issued)
All commission income must be reported regardless of whether a T4A was issued. If you were registered with more than one brokerage during 2025, collect T4A slips from each.
□ T4 slip (if you also had employment income in 2025)
Required if you were employed and self-employed in the same year.
First-year agents: self-employment income triggers both the employer and employee portions of CPP contributions. CPP on self-employment income is calculated at filing based on your net self-employment income. The amount can be significant and should be planned for.
□ Commission statements from all brokerages for 2025
Include: Transaction date, funding date, gross commission, split percentage, brokerage fee or split amount, and net amount paid to you.
Commission income should be reconciled to gross commission earned and related brokerage deductions, with the final reporting approach confirmed against the brokerage commission statement or T4A and your own records. Do not report only the net amount without confirming which basis applies.
□ Referral fee income received in 2025 (if applicable)
Includes referral fees received from other agents, mortgage brokers, real estate agents, financial advisors, lawyers, or other referral sources.
Referral fees are business income and must be reported whether or not a T4A was issued. Obtain or retain documentation of the amount, payer, and date for each receipt.
□ Lender volume bonuses, trailer fees, or incentive payments (if applicable)
These amounts are taxable income and may not appear on a T4A from your brokerage. Collect any statements, letters, or direct deposits received from lenders. Flag if the timing of recognition is unclear.
□ Business bank statements (PDFs or CSV export) for 2025
Used to reconcile all deposits, identify missing commission payments, and confirm referral fee receipts not captured on T4A slips.
□ Year-end unpaid commissions (deals funded but commission not yet received as of December 31, 2025)
Under accrual accounting, income is reported when earned. If a deal funded before December 31 and commission was earned but not yet received, it belongs in the 2025 tax year (the year being filed). Confirm the funding date for deals near year-end with your brokerage commission statement. If you are providing this information in Section 06 as accounts receivable, do not duplicate it here.
□ Personal investment slips (if applicable)
T3, T5, T5008, and brokerage tax package.
Personal return items, not T2125 business income, but required for a complete T1.
02. GST/HST
GST/HST treatment for mortgage agents is materially different from most self-employed professionals and requires careful review. The core issue is that mortgage brokering services (arranging for the lending of money) are generally classified as exempt financial services under the Excise Tax Act. Exempt services are not subject to GST/HST, which also means no input tax credits (ITCs) can be claimed on related expenses. However, not all income a mortgage agent earns necessarily falls under the same treatment. Referral fees, consulting arrangements, and non-brokering services require separate review.
□ GST/HST registration status: confirm whether you are registered
Many mortgage agents are not registered for GST/HST because their core income (mortgage brokering commissions) is exempt from GST/HST. Registration may not be required and, in some cases, may not be appropriate. If you are unsure whether you should be registered, flag this for review before filing.
□ Breakdown of income by type: mortgage brokering commissions vs. other services (if applicable)
Relevant if you earned income in 2025 from consulting, training, speaking, coaching, or any non-brokering activity in addition to mortgage commissions.
Non-brokering services may be taxable supplies subject to GST/HST even when your brokering income is exempt. Mixed supply situations require a separate review of your GST/HST obligations.
□ GST/HST returns filed in 2025 (if registered)
Include: Filing confirmations, assessments and reassessments, and adjustment notices.
□ Not registered? Flag if you have income streams that may not qualify as exempt financial services
The $30,000 small-supplier threshold still applies to taxable supplies. If any portion of your income is from taxable services and the cumulative total of those taxable supplies exceeded $30,000 in a single calendar quarter or over four consecutive calendar quarters, registration may be required for that portion of your activity.
03. Shared Expenses (Allocation Required)
These expenses require a defensible business-use allocation before any deduction can be claimed. Vehicle use is typically significant for mortgage agents who meet clients at their homes, offices, or properties, and it is also the area CRA scrutinizes most closely. A mileage log is the single most important document many mortgage agents are missing.
□ Mileage log for business vehicle use in 2025
Include: Date, starting location, destination, business purpose, and kilometres driven for each trip.
Mortgage agents regularly drive to meet clients, attend brokerage meetings, visit lender offices, and complete document exchange. This is legitimate business driving that can be claimed, but only with documentation. A contemporaneous log (recorded at the time of each trip) is significantly stronger than a reconstructed estimate. If you do not have a log for 2025, flag this now so we can discuss your options before filing.
□ Total kilometres driven in 2025: business and personal
Used to calculate the business-use percentage applied to all vehicle expenses. The commute between your home and a fixed brokerage office is generally not deductible.
□ Vehicle expense receipts or annual totals by category
Fuel, insurance, repairs and maintenance, registration, business-related parking, loan interest
Annual totals by category are sufficient for initial intake. Retain individual receipts in case of CRA review.
□ Vehicle lease agreement or financing statement (if applicable)
Lease and interest deductions are subject to annual CRA limits. Do not estimate these independently. The limits change year to year.
□ Home workspace details, size and use
Include: Total home square footage, workspace square footage, and whether the space is dedicated or mixed-use.
Self-employed business-use-of-home expenses are allowed if the workspace is your principal place of business, or if you use the space only to earn business income and it is used regularly and on an ongoing basis to meet clients, customers, or patients. Many mortgage agents who do not have a fixed brokerage office use their home as their primary place of work. A mixed-use room may still qualify if it is the principal place of business, subject to reasonable allocation. Note: CCA should generally not be claimed on a home office within a principal residence. Doing so can result in the loss of the Principal Residence Exemption on that proportionate portion of the home when it is sold. Flag if CCA on the home has been claimed in any prior year.
□ Rent receipts (renters) or mortgage interest details (homeowners)
Homeowners: Provide a mortgage statement showing the interest and principal split.
Principal repayment is not deductible. Interest only.
□ Utility bills for 2025 (annual totals or monthly statements)
Electricity, heating, water
Annual totals are sufficient for initial intake. Retain underlying statements in case of CRA review.
□ Internet bills, annual total and your estimated business-use percentage
Allocation required. Do not assume 100% unless the connection is exclusively for business use.
□ Mobile phone and business phone bills, annual total and business-use percentage
Common uses: Client calls and text follow-up, lender and brokerage communication, document signing apps, mortgage calculator apps, navigation.
A separate business-only mobile line can be claimed in full. A shared personal plan requires a percentage allocation. Phone use is typically high for mortgage agents, and a well-supported allocation is more valuable than an unsupported 100% claim.
□ Home insurance annual premium
Allocation required. Relevant to the home office calculation.
□ Property tax bill (homeowners only)
Allocation required. Relevant to the home office calculation.
□ Business-use percentage notes for all mixed-use assets
For: Laptop, phone, tablet, and any equipment used for both personal and work purposes.
Provide a reasonable percentage estimate and a short rationale. The estimate must be defensible, not perfect.
04. Direct Business Expenses
These expenses are receipt-based and do not require a percentage allocation, provided they were used entirely or primarily for business. Licensing, insurance, and marketing costs are consistently the most significant categories for mortgage agents and are frequently under-documented at filing time.
□ Provincial licensing fees, renewal fees, and registration costs
Include: Your provincial regulator’s agent or broker licence renewal invoice and payment confirmation for 2025 (for example, FSRA in Ontario).
Licensing fees required to carry on your mortgage brokering business are deductible as a business expense on Form T2125.
□ Continuing education receipts (provincially required and voluntary)
Include: Course fees, exam fees, and registration fees for any professional development completed in 2025.
Continuing education required to maintain your licence is deductible. Keep receipts and a short note on business relevance for any voluntary course.
□ E&O (errors and omissions) insurance premium
Include: Policy invoice and annual premium total.
E&O insurance required for provincial licensing is deductible in full as a business expense.
□ Brokerage fees, desk fees, and administration fees paid to your brokerage
Include: Monthly or per-deal fee statements from your brokerage. Common forms include flat monthly fees, per-deal administration fees, technology platform fees, and compliance fees.
Watch for: Fees that are withheld from commission payouts rather than invoiced separately. Confirm the gross commission and all deductions with your brokerage commission statements. Fees embedded in the commission payout are still deductible as a business expense.
□ Referral fees paid out in 2025 (if applicable)
Fees paid to other agents, brokers, real estate agents, financial advisors, or other referral sources for client introductions.
Include: Invoices or written fee agreements, amounts paid, recipient name, and payment date.
Referral fees paid for client referrals are deductible as a business expense when supported by documentation. T4A reporting obligations for contract payments may apply to amounts paid to Canadian resident individuals or certain entities (generally reported in box 048). Under CRA administrative policy, a slip is generally required if total payments exceed $500 in the calendar year or if tax was withheld. Review payer obligations before filing.
□ Mortgage association and industry membership fees
CMBA, MBABC, IMBA, regional mortgage broker associations, and any other professional membership dues paid in 2025.
Membership dues for professional associations directly related to your mortgage brokering activity are deductible.
□ Marketing and advertising expenses
Digital advertising (Google, Meta, LinkedIn), social media management tools, website hosting and domain, printed materials (business cards, brochures, signage), open house costs, promotional items, lead generation platforms and services.
Keep individual receipts or consolidated statements by platform. Marketing costs for mortgage agents can be substantial and are often under-tracked.
□ CRM, mortgage origination, and productivity software
Salesforce, HubSpot, BrokrBindr, Filogix, Velocity, Scarlett, or any other CRM or mortgage origination platform subscription paid in 2025.
Watch for: Subscriptions billed annually that renew automatically and are not captured in bookkeeping.
□ Mortgage rate comparison and lender research tools (if paid)
Rate comparison platforms, lender portals with subscription fees, and market data tools.
□ General business software and office tools
Microsoft 365, Google Workspace, DocuSign or e-signature tools, scheduling tools, accounting software
□ Hardware and equipment receipts (2025 purchases)
Laptop, desktop, monitors, printer or scanner for document handling, tablet, headset, webcam
Include: Purchase date, vendor, amount, and estimated business-use percentage for any mixed-use item.
Hardware and equipment are often capital assets and must be claimed through CCA rather than as a current expense. The Immediate Expensing incentive that previously allowed many eligible depreciable properties to be fully deducted in the year of acquisition has expired or been significantly restricted for property acquired after 2024 for most taxpayers. For 2025 purchases, the standard half-year rule will generally apply in the year of acquisition, with the specific treatment depending on the CCA class. The exact purchase date is required to determine the correct class and available deduction. Do not assume any enhanced first-year treatment applies. Flag all hardware purchases for class-specific review.
□ Accounting and legal fees
Include: Invoices and proof of payment for professional fees paid in 2025.
□ Business banking fees and wire transfer fees
Pull from bank statements. Business account fees are deductible and often overlooked.
□ Meals and entertainment (business-related only)
Include: Receipt, business purpose, and names of attendees for each claim.
Deductible portion is generally 50% of the lesser of the amount incurred and a reasonable amount under the circumstances, subject to limited exceptions. Meals with clients or referral partners qualify. Do not claim the full cost.
□ Client appreciation and gift expenses (if applicable)
Closing gifts, referral thank-you gifts, holiday gifts to clients or referral sources.
Client gifts are a business expense. Retain receipts and note the business purpose and recipient. Gifts that include an element of entertainment may be subject to the 50% meals and entertainment restriction. Flag for review.
□ Business travel expenses (if applicable)
Flights, hotels, taxis, rideshare, and transit. Business travel only, separate from local vehicle expenses claimed in Section 03.
05. People and Payments
This section covers amounts paid to or on behalf of people, including assistants, co-agents, and health coverage paid for yourself and your family. Each has specific rules that determine how it is treated and how much can be claimed.
□ Payments to an assistant or administrative support person (if applicable)
Include: Invoices or payment records, total amount paid, and type of work performed.
If you paid an assistant as a self-employed contractor, fees-for-service slip reporting (T4A box 48 in most cases) may apply. If the person is treated as an employee, payroll and T4 obligations apply separately. Confirm the working arrangement before filing.
□ Private Health Services Plan (PHSP) premiums (if applicable)
Health and dental insurance plans for yourself, your spouse or common-law partner, and household members, paid through an eligible PHSP provider.
Include: Annual premium total and name of the plan provider.
Deduction is subject to CRA annual per-person limits and income-based restrictions. The plan must be through a qualifying insurance company, trust, or professional organization. The same premium cannot also be claimed as a personal medical expense.
06. Year-End Position
Mortgage agents filing Form T2125 generally use the accrual method of accounting under CRA rules. Under accrual accounting, income is reported when earned and expenses when incurred, regardless of when cash changes hands. Commission income earned on a deal that funded before December 31 belongs in 2025, even if the commission was not received until January. These items capture what was open at year-end and will not be visible from your bank account alone.
□ Year-end accounts receivable: commissions earned but not yet received as of December 31, 2025
Include: Deal funding date, brokerage name, amount of commission earned, and expected payment date.
Confirm the funding date of any deal that closed near year-end. Commission on a deal funded December 29 belongs in the 2025 tax year even if it is not paid by your brokerage until January 2026.
□ Year-end accounts payable: business expenses incurred but unpaid as of December 31, 2025
Examples: A brokerage fee invoice outstanding at year-end, a referral fee owed but not yet paid, an accounting invoice received in December and paid in January.
Under accrual accounting, an expense is deductible in the year it is incurred. If a legitimate business expense is owed at December 31 and supported by an invoice or agreement, the deduction belongs in 2025 regardless of when payment is made.
□ Sale or disposal of business assets in 2025 (if applicable)
Include: Date of disposition, proceeds received, original purchase date, and original cost.
May trigger recapture of CCA previously claimed, or a terminal loss, depending on the proceeds and the remaining undepreciated capital cost of the class.
□ Bad debts (if applicable)
If a commission or fee was included in income in a prior year and the deal later fell through or the amount became genuinely uncollectible, it may be deductible. Requires documentation and review.
07. Prior Year and Planning
These items do not affect every client, but when relevant, they can significantly affect the return. Commission income for mortgage agents is often irregular. A strong Q4 can create a large tax liability that benefits from instalment planning and RRSP review. The RRSP deadline is a hard date. Do not miss it.
□ 2024 Notice of Assessment, and prior-year return copy if available
Confirms carry-forward amounts, unused RRSP room, and any outstanding balances with CRA.
□ Prior-year CCA schedule showing UCC balances by class (if available)
Required if you previously claimed CCA on a vehicle, hardware, or other depreciable assets. The undepreciated capital cost (UCC) balance by class from last year is the starting point for this year’s calculation.
□ RRSP contribution receipts, for the applicable window
Include receipts that fall within the contribution window for the 2025 return.
The 2025 RRSP contribution deadline is March 2, 2026. Contributions made between January 1 and March 2, 2026, fall within the 2025 RRSP contribution window and must be reported for the 2025 filing cycle (Schedule 7), whether or not they are deducted for 2025.
Time-sensitive: March 2, 2026 deadline
□ FHSA contribution receipts (if applicable)
Can affect tax planning in high-income years.
□ CRA instalment reminders and instalment payment confirmations (if applicable)
Mortgage agents with irregular or growing commission income frequently owe quarterly instalments. Missed or underpaid instalments result in CRA interest charges that are not deductible. If you received instalment reminders in 2025, include all related payment confirmations.
□ Prior-year GST/HST notices, assessments, or adjustments (if registered)
Carryover or filing mismatch issues can affect the current year return.
□ Access to CRA My Account (and My Business Account if GST/HST registered)
Confirms instalment balances, outstanding correspondence, account status, and carry-forward amounts. Review before filing.
□ Foreign property reporting (T1135): flag if applicable
Applies if the cost of specified foreign property exceeded $100,000 CAD at any time during 2025. This includes foreign investment accounts and foreign shares held outside a registered plan.
T1135 is a separate filing obligation from the T1 return, generally due on or before the due date of your income tax return. Penalties for non-compliance apply.
□ 2025 filing and payment deadlines acknowledged
Self-employed individuals have a filing deadline of June 15, 2026. However, any balance owing is generally due April 30, 2026. Interest on late payments begins accruing after April 30, regardless of the extended filing deadline.
This distinction matters. The filing extension does not extend the payment deadline. If you expect to owe tax for 2025, plan for payment by April 30, 2026 to avoid interest charges.
□ Any CRA letters related to your 2025 taxes
Review letters, reassessments, requests for information, instalment reminders.
These can change what must be filed or explained. Provide all of them without filtering.
08. Digital Records and Audit Protection
CRA audits and review requests can arrive years after filing. The documents you gather now may need to be produced in 2027 or 2028. These two items protect the deductions you have claimed and reduce the risk of disallowance if CRA asks questions later.
□ Digital backup of all physical receipts
Scan or photograph all paper and thermal receipts before submitting originals or filing. This applies especially to gas station receipts, restaurant receipts, and any printed receipts for meals, parking, or tolls.
Thermal paper receipts fade within 12 to 18 months and are frequently illegible by the time CRA requests them. A faded or blank receipt provides no audit protection. CRA generally accepts a clear digital image of the original as a supporting document, provided the image is legible and complete. Store backups in a cloud folder organized by tax year.
□ Master commission statement from your brokerage showing the full flow of funds
If you are reporting gross commission income with brokerage fees and splits deducted separately as business expenses, obtain the brokerage’s master commission statement showing gross commission earned, fee deductions applied, and net amount paid to you for each transaction.
This is the key document that reconciles your reported gross income against the T4A your brokerage issued. If CRA questions the difference between your reported income and the T4A amount, this statement is your primary support. Confirm with your brokerage whether this report is available in your agent portal before filing.