2025 Tax Filing Documents Checklist for trades contractors

01. Income and Receivables

The goal here is a complete picture of everything you were paid for work done in 2025. Trades contractors typically receive income from multiple sources: invoiced jobs paid by cheque or e-transfer, progress payments on larger projects, cash payments, and amounts held back by general contractors under construction lien legislation. All of it must be reported. The starting point is your invoices and bank accounts, but those alone may not capture everything.

□ T4A slips from general contractors or clients (if issued)

All business income must be reported regardless of whether a T4A was issued. General contractors are not always required to issue T4As to trades subcontractors. Do not assume your income total equals the sum of your T4A slips.

□ T4 slip (if you also had employment income in 2025)

Required if you worked as both an employee and a self-employed contractor in the same year. This is common in the trades, particularly early in a contracting career or during slow periods. Contact us before gathering your documents if this applies.

First-year contractors: 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.

□ Complete invoice list or job log for all work completed in 2025

Include: Client or general contractor name, job address, invoice date and number, amount billed, HST charged, and whether the invoice has been paid in full.

This is your primary income record when T4A slips are missing or incomplete. If you do not use invoicing software, a handwritten job log or spreadsheet covering all jobs completed is the next best option. The list must be complete, including jobs where payment was received in cash.

□ Cash receipts and records of all cash payments received in 2025

Include: A written record of each cash payment received, including the date, client name, job description, and amount. If you issued a handwritten receipt, retain a copy.

Cash income is taxable. CRA cross-references bank deposits against supplier records, material purchases, and subcontractor filings to identify unreported income. A cash payment that does not show up in bank deposits is not invisible to CRA. Report all cash income accurately and keep a contemporaneous record of each receipt.

□ Progress billing records for any multi-phase jobs active in 2025

Include: Progress billing schedule, amounts invoiced at each stage, payments received against each billing, and the status of the job at December 31, 2025.

Under accrual accounting, income is reported when earned. Work completed on a multi-phase job before December 31 is generally income in 2025, even if the progress billing or final invoice is not issued until January. Flag any jobs where significant work was completed in December but not yet billed.

□ Construction lien holdback records (if applicable)

Include: The gross contract amount, the holdback percentage withheld by the general contractor, and the holdback release date or expected release date for each applicable job.

Construction lien legislation requires general contractors to hold back a percentage of each progress payment until the holdback period expires. In Ontario, this is governed by the Construction Act and the holdback percentage is generally 10%. Holdback rules vary by province. The holdback amount is income when the work is done, not when the holdback is released. If you completed work in 2025 and a holdback is still outstanding at year-end, that holdback belongs in your 2025 income. Flag this for review.

□ Deposits received from clients before work began (if applicable)

Deposits received before work is completed may or may not be income depending on whether the related work was completed in 2025. Flag any deposit received in 2025 where work was not completed by December 31 and any deposit received before 2025 where the job was completed in 2025. The timing of income recognition for deposits requires review.

□ Business bank statements (PDFs or CSV export) for 2025

Used to reconcile all deposits against your invoice and job records, identify missing income, and confirm cash receipts that were deposited. Bank deposits are one of the primary tools CRA uses to reconstruct income if records are incomplete.

□ Materials billed through to clients and reimbursed (if applicable)

Applies where you purchased materials, charged them to the client at cost or with a markup, and the client paid you for those materials as part of the job invoice.

Materials billed through to a client and reimbursed form part of your gross revenue on Form T2125, with the underlying material cost recorded as a corresponding expense. Do not net these amounts against each other without review. The gross revenue and the expense must both be captured for the return to reflect your business accurately.

□ 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.

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02. GST/HST

Trades services are taxable supplies. Unlike some other self-employed professionals whose core income is exempt from GST/HST, a contractor providing labour or a combination of labour and materials is generally making taxable supplies and must register for GST/HST once the $30,000 threshold is crossed. GST/HST is a significant compliance area for trades contractors, and errors in collection, remittance, or recovery are common.

□ GST/HST registration number and filing frequency (if registered)

Include: Your registration number, the effective date of registration, and whether you file monthly, quarterly, or annually.

□ Total HST collected (or collectible) on all invoices in 2025

HST collected from clients must be kept separate from your service revenue on your books. It is not income. It is an amount collected on behalf of CRA and must be remitted. Confirm that HST was applied correctly to all taxable invoices and that the rate matches the province where the supply was made.

□ Total HST paid on business expenses (input tax credits)

Registered businesses can recover HST paid on most business purchases by claiming input tax credits (ITCs) on their GST/HST return. Materials, tools, equipment, fuel, and other business expenses that included HST all give rise to ITCs. Retain all receipts showing the HST amount paid. ITCs reduce the net amount owing to CRA on your GST/HST return.

□ GST/HST returns filed for 2025 reporting periods (if registered)

Include: Filing confirmations, assessments and reassessments, and adjustment notices.

□ Quick Method election or confirmation (if applicable)

The Quick Method allows eligible small businesses to remit HST at a fixed rate on gross sales instead of tracking HST collected and ITCs separately. It can simplify GST/HST compliance, but it changes how amounts are reported on both your GST/HST return and Form T2125. If you are using the Quick Method, confirm the election is in place and note this upfront.

□ Not registered? Flag if your revenue may have crossed the $30,000 threshold in 2025

Registration is required once worldwide taxable supplies exceed $30,000 in a single calendar quarter, or over four consecutive calendar quarters. If you crossed the threshold in 2025 and did not register, you may owe HST on supplies made after the threshold was crossed, regardless of whether you collected it from clients. Flag this immediately for review before filing.

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03. Shared Expenses (Allocation Required)

These expenses require a defensible business-use allocation before any deduction can be claimed. For most trades contractors, the vehicle is the most significant shared expense and the one CRA scrutinizes most closely. A truck or van used to get to job sites, hauling tools and materials, and making supply runs is doing real business work — but the personal use portion is not deductible, and the split must be supported by a mileage log.

□ Mileage log for business vehicle use in 2025

Include: Date, starting location, destination, business purpose, and kilometres driven for each trip.

Trades contractors drive constantly for business: to job sites, to supply houses, to pick up materials, to meet clients or general contractors, to dispose of waste. This is legitimate business driving and it can be substantial. Without a contemporaneous log recorded at the time of each trip, the deduction is at significant CRA risk no matter how obvious the business use seems. 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. Driving from home to a fixed shop or yard is generally not deductible. Driving from home directly to a client job site may be, depending on the circumstances. Flag if you are unsure about your specific situation.

□ Vehicle expense receipts or annual totals by category

Fuel, insurance, repairs and maintenance, registration, business-related parking, and 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 (if applicable)

Include: Total home square footage, workspace square footage, and whether the space is dedicated or mixed-use.

Many trades contractors do their quoting, invoicing, scheduling, and administrative work from home. A home office deduction may apply if the workspace is your principal place of business or is used exclusively and regularly to meet clients. A dedicated space used only for business is a stronger claim than a shared room. 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 when the home 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 bills, annual total and business-use percentage

Common uses: Client and general contractor calls, job scheduling, material orders, supplier follow-up, quoting apps, navigation.

A separate business-only mobile line can be claimed in full. A shared personal plan requires a percentage allocation. A well-supported allocation is more valuable than an unsupported 100% claim.

□ Home insurance annual premium (if claiming home office)

Allocation required. Relevant to the home office calculation.

□ Property tax bill (homeowners claiming home office only)

Allocation required. Relevant to the home office calculation.

□ Business-use percentage notes for all mixed-use assets

For: Any vehicle, phone, tablet, laptop, or equipment used for both personal and work purposes.

Provide a reasonable percentage estimate and a short rationale. The estimate must be defensible, not perfect.

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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. Tools, materials, licensing, and insurance are consistently the most significant and most frequently under-documented categories for trades contractors at filing time. Small purchases paid for in cash or on a debit card throughout the year add up quickly and are often lost entirely by the time tax season arrives.

□ Tools and equipment purchased in 2025

Power tools, hand tools, testing equipment, specialty tools, safety equipment, ladders, and any other equipment purchased for business use in 2025.

Include: Purchase date, vendor, item description, and amount for each purchase.

Tools costing less than $500 can generally be expensed as a current deduction in the year of purchase. Tools costing $500 or more are generally capital assets and may need to be claimed through CCA rather than as a current expense. First-year deductions can vary depending on the property class, acquisition date, and current tax rules. Provide the exact purchase date and cost for each item so the correct treatment can be determined. Do not assume any item can be fully deducted in the year of purchase without review.

□ Materials and supplies purchased for jobs in 2025

Lumber, pipe, wire, fittings, fasteners, adhesives, paint, concrete, gravel, and any other materials consumed in completing jobs in 2025.

Include: Supplier receipts, invoices, or account statements for all material purchases. If you have a trade account with a supplier, request an annual statement.

Materials purchased for a job and consumed in completing it are a current business expense. Materials billed to a client and reimbursed are treated differently and should be flagged separately (see Section 01). If you have leftover materials on hand at December 31 that were not used in completing any 2025 job, those may need to be treated as inventory or supplies on hand rather than expensed. Flag if you are carrying significant unused materials into 2026.

□ Small tools and consumable supplies (ongoing purchases throughout the year)

Drill bits, blades, sandpaper, tape, caulk, fasteners, safety glasses, gloves, disposable respirators, cleaning supplies, and other items that are used up on the job.

These purchases are often paid in cash or on a debit card and are consistently the most under-captured expense category in trades returns. Collect all receipts, including small ones. If receipts are lost, bank and card statements showing supplier names can provide partial support, but receipts are significantly stronger.

□ Provincial trade licence and certification fees

Include: Renewal invoices and payment confirmations for your provincial trade licence or certificate of qualification. In Ontario, this includes fees paid to the Ontario College of Trades (OCOT) or its successor body, or to TSSA for gas technician and oil burner technician licences, as applicable to your trade.

Licence fees required to carry on your trade are deductible as a business expense on Form T2125.

□ Safety training and certification costs

WHMIS, Working at Heights, First Aid, Confined Space Entry, Fall Arrest, and any other mandatory or voluntary safety certifications completed or renewed in 2025.

Include: Course fees and payment confirmation for each certification.

Safety training required to work on job sites or maintain your licence is deductible. Keep a short note on business relevance for any voluntary course.

□ WSIB premiums paid in 2025 (if applicable)

Include: WSIB account number, premium statements, and payment confirmations for all premiums paid in 2025.

Independent operators in most construction and trades classifications are required to register with WSIB and pay premiums on their own earnings. Those premiums are a deductible business expense on Form T2125. Confirm your WSIB classification and whether you are registered as an independent operator before filing.

□ Contractor liability insurance premium

Include: Policy invoice and annual premium total for your commercial general liability (CGL) policy or any other business liability coverage carried in 2025.

Contractor liability insurance required for your business or to access job sites is deductible in full as a business expense.

□ Work clothing and personal protective equipment (PPE)

Safety boots, hard hats, hi-vis vests, work gloves, safety glasses, hearing protection, dust masks and respirators, and other PPE required for the job.

Protective equipment and clothing required for safety on job sites or mandated by an employer or general contractor is deductible. General everyday clothing is not, even if worn to work. The distinction is whether the item has a personal use component. Safety boots with steel toes or metatarsal guards, hi-vis vests, and hard hats generally qualify. Standard work pants and shirts generally do not, even if they get dirty on the job. Flag any borderline items for review.

□ Trade association and union dues

Union dues, local association fees, and membership dues for any trade or industry association paid in 2025.

Union dues paid as a self-employed person are generally deductible as a business expense, not as an employment deduction. Confirm the correct treatment based on your specific arrangement.

□ Equipment rental and tool rental costs

Scaffolding, lifts, excavators, compactors, generators, pumps, and any other equipment rented for specific jobs in 2025.

Include: Rental invoices and payment confirmation for each rental.

□ Fuel costs for equipment and generators (separate from vehicle fuel)

Fuel purchased for job site generators, compressors, power washers, or other equipment run on gasoline or propane.

Keep separate from vehicle fuel if possible. Equipment fuel is a direct business expense. Vehicle fuel is part of the vehicle expense claim and subject to the business-use allocation from Section 03.

□ Waste disposal and dump fees

Bin rentals, landfill tipping fees, recycling depot fees, and any other job site waste disposal costs paid in 2025.

□ Storage unit or yard rental (if applicable)

If you rent a storage unit, yard, or shop space to store tools, equipment, or materials, those rental costs are deductible as a direct business expense. Retain lease or rental agreements and payment records.

□ Accounting and legal fees

Include: Invoices and proof of payment for professional fees paid in 2025.

□ Business banking fees

Pull from bank statements. Business account fees are deductible and often overlooked.

□ Business software and apps

Estimating and quoting software, job management apps, scheduling tools, invoicing software, and accounting software used for business in 2025.

□ Advertising and marketing costs

Google Business listing, online directory listings, social media ads, yard signs, truck lettering and vehicle wraps, business cards, and any lead generation platform subscriptions.

Vehicle lettering and wraps applied purely for business identification are generally deductible. If the same vehicle is used personally, the wrap cost may still be fully deductible as advertising rather than a vehicle expense, because advertising is not subject to the same business-use allocation as vehicle operating costs. Flag for review.

□ 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. Meals with clients, general contractors, or suppliers qualify. Do not claim the full cost.

□ Business travel expenses (if applicable)

Flights, hotels, taxis, rideshare, and transit for work outside your local area. Business travel only, separate from local vehicle expenses claimed in Section 03.

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05. People and Payments

This section covers amounts paid to other people for work on your jobs, including subcontractors and any employees. The reporting rules for subcontractors in the construction industry are different from most other self-employed businesses. Getting this wrong carries penalties that apply separately from the income tax return.

□ Payments to subcontractors in 2025 (if applicable)

Include: Name and address of each subcontractor, total amount paid in 2025, type of work performed, and whether payment was made by cheque, e-transfer, or cash.

Businesses in the construction industry that pay subcontractors for construction services are generally required to file Form T5018 (Statement of Contract Payments), not Form T4A, to report those payments. The T5018 filing deadline is six months after your fiscal year-end (for most sole proprietors, this is June 30, 2026 for the 2025 tax year). The filing threshold is generally $500 or more paid to a single subcontractor during the calendar year. Penalties apply for late or missing filings. Confirm your T5018 obligations before filing your income tax return. Do not assume T4As are correct for subcontractor payments in construction.

□ WSIB clearance certificates for subcontractors (if applicable)

If you hired subcontractors in 2025, you may be required to obtain WSIB clearance certificates confirming the subcontractor is in good standing before making payment. Without a clearance certificate, you may be liable for the subcontractor’s WSIB premiums if they are not registered or in arrears. Confirm clearance certificate requirements based on your industry classification and the nature of the work performed.

□ Payroll records for any employees (if applicable)

Include: T4 slips issued, payroll remittance confirmations, and Records of Employment (ROEs) for any employees paid in 2025.

If you have employees, payroll deductions and remittances are a separate compliance obligation from your income tax return. Confirm that all payroll obligations are current 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.

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06. Year-End Position

Trades contractors 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. Work completed before December 31 is income in 2025 even if payment arrives in January. These items capture what was open at year-end and will not be visible from your bank account alone.

□ Year-end accounts receivable: work completed but not yet paid as of December 31, 2025

Include: Client name, job description, invoice date, amount outstanding, and expected payment date.

Work completed before December 31 is income in 2025 even if payment has not been received. This includes unpaid invoices and the earned portion of jobs where a final invoice has not yet been issued. Do not wait until cash is received to report income if the work was done in 2025.

□ Holdbacks receivable as of December 31, 2025 (if applicable)

Include: General contractor name, job address, gross contract amount, holdback percentage, and amount being held as of December 31.

Holdbacks withheld by a general contractor under construction lien legislation represent earned income. The holdback amount is generally reportable in the tax year the underlying work was completed, not the year the holdback is released. If you are providing this information above in Section 01, do not duplicate it here.

□ Year-end accounts payable: business expenses incurred but unpaid as of December 31, 2025

Examples: A material supplier invoice received in December and paid in January, a subcontractor invoice outstanding at year-end, an equipment rental billed after job completion.

Under accrual accounting, an expense is deductible in the year it is incurred. If a legitimate business expense is outstanding at December 31 and supported by an invoice or agreement, the deduction belongs in 2025 regardless of when payment is made.

□ Materials on hand at December 31, 2025 (if significant value)

If you purchased materials in 2025 that were not used in completing any 2025 job and are still on hand at year-end, those materials may not be fully deductible in 2025. Flag any significant quantity of unused materials so the treatment can be reviewed. Small quantities of consumable supplies on hand are generally not an issue.

□ 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. Applies to tools, equipment, and vehicles sold or scrapped during the year.

□ Bad debts (if applicable)

If a job invoice was included in income in a prior year and the client has not paid and the amount is genuinely uncollectible, it may be deductible. Requires documentation and review.

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07. Prior Year and Planning

These items do not affect every client, but when relevant, they can significantly affect the return. Trades contractors with strong years often face large tax bills at filing time because no tax is withheld at source. RRSP planning and instalment management can make a meaningful difference. 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, tools, equipment, 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 higher-income years.

□ CRA instalment reminders and instalment payment confirmations (if applicable)

Trades contractors with consistent or growing income frequently owe quarterly instalments because no tax is withheld at source. 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 you are 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 total cost amount 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.

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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 several years from now. Trades contractors are among the most frequently audited self-employed groups in Canada because cash income, subcontractor payments, and vehicle deductions are all areas CRA prioritizes for review. The records in this section are the difference between a deduction that holds up and one that gets disallowed.

□ 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, hardware store receipts, lumber yard slips, and any printed receipts for tools, materials, meals, or parking.

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 and by category.

□ Job records and contracts for all 2025 jobs

Written quotes, contracts, or work orders for each job completed in 2025, plus any change orders or scope amendments issued during the job.

Job records serve two audit functions. First, they establish that income was earned through legitimate business activity. Second, they support the business purpose of materials, subcontractor payments, and other job-specific expenses. If CRA questions why you purchased a specific material or hired a specific subcontractor, a job record linking those costs to an identifiable client and job is your primary support. Contracts do not need to be formal documents. A written quote accepted by the client or a text exchange confirming the scope and price is better than nothing.

□ Mileage log saved and backed up

Save a copy of your mileage log in a cloud folder separate from any app or device where it was recorded. If you used a mileage tracking app, export the full year log as a PDF or CSV before the filing deadline.

A mileage log that exists only on a phone or in an app subscription is at risk. App accounts get closed, phones get lost, and subscription platforms change. The log is only useful if it can be produced when CRA asks for it, which may be two or three years from now. Export it and store it with your other 2025 tax records today.

□ Subcontractor records organized and retained

For each subcontractor paid in 2025: retain their name, address, business number (if provided), the invoices or payment records supporting the amounts paid, and a copy of any WSIB clearance certificate obtained.

Subcontractor payments in the construction industry are a focused CRA audit area. CRA looks for unreported income on the subcontractor’s side and may contact you as the payer to verify the amounts and nature of payments made. Complete subcontractor records also support your T5018 filing obligations and your own deduction claims. Retain these records for at least six years from the date of the related return.

□ Tool and equipment inventory list (recommended)

A simple list of major tools and equipment owned at December 31, 2025, including a description of each item, approximate purchase date, and estimated current value.

An inventory list is not required by CRA, but it serves two practical purposes. First, it helps ensure that CCA claims are complete and consistent from year to year. Second, it supports insurance claims in the event of theft or loss on a job site. A tool inventory that predates a loss is significantly more useful than one created after the fact. A photograph of major tools and equipment, timestamped and stored in a cloud folder, is a simple way to create this record.

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