2025 Tax Documents Checklist for Trades Contractors

This checklist covers the most common documents needed to prepare your 2025 personal tax return (T1) as a self-employed trades contractor in Canada. Edge cases, specialized credits, and unusual situations may require additional documents not listed here. It covers your business income and expenses (Form T2125), GST/HST records, investment income, registered plans, and personal deductions in a single document.

Who this is for
Sole proprietors and self-employed trades contractors filing a T1 return with Form T2125, including electricians, plumbers, HVAC technicians, general contractors, carpenters, roofers, welders, and other skilled tradespeople working on contract or project-based arrangements.

Incorporated?
This checklist is for sole proprietors filing a T1 personal return with Form T2125. If you operate through a corporation, a T2 corporate return is also required and your personal T1 income picture is different. Contact us before gathering documents or filing either return. If you incorporated to provide services to a general contractor or construction company where you would otherwise be considered an employee, your corporation may be classified as a Personal Services Business (PSB) by CRA. PSB status significantly limits deductible expenses and increases the effective corporate tax rate. This is a common and costly error for tradespeople who incorporate without a full review. Flag this during intake.

Employee of a contractor receiving a T4?
This checklist does not apply if you were on payroll and received a T4 from a general contractor or construction company. T2200 employment expense rules are separate from sole-proprietor self-employment rules. If you have both employment income and self-employment income in 2025, separate documentation may be needed for each.

First time filing with us?
Include a copy of your 2024 T1 return and your most recent Notice of Assessment. This allows us to carry forward RRSP deduction room, any capital or non-capital losses, and your instalment history accurately.

Not sure whether something on this list applies to you?
Email us before you start gathering. A five-minute question now is better than a revised return later.

Important: This checklist is for intake and planning purposes only. It is not legal or tax advice and does not create a client relationship. Your specific situation may differ from the scenarios described. Contact us to discuss your circumstances before you begin gathering documents.

See our 2025 Tax Return Services

Key CRA and Related References

T1 Personal Return | T4002: Business and Professional Income Guide | Form T2125 | GST/HST for businesses | Business-use-of-home | Motor vehicle expenses | CRA important dates

Filing Deadlines and Submission Window

Key dates for the 2025 tax year:

Balance owing deadline: April 30, 2026. Any amount owed to CRA for 2025 is due April 30 regardless of your filing deadline. Interest begins accruing on unpaid balances after this date.

T1 filing deadline (self-employed): June 15, 2026. Filing after this date when a balance is owing triggers a late-filing penalty of 5% of the unpaid balance plus 1% per additional month (higher rates apply for repeat failures in recent years).

RRSP contribution deadline: March 2, 2026. Contributions made by this date can be deducted on your 2025 return or carried forward.

2025 instalment deadlines: March 15, June 15, September 15, and December 15, 2025. Missed or underpaid instalments result in CRA interest charges that are not deductible. If any due date falls on a Saturday, Sunday, or public holiday, the deadline is the next business day.

Document submission deadline: Submit your complete document package by May 15, 2026. Returns submitted after May 15 cannot be guaranteed to be filed by the June 15 deadline.

Common Mistakes Trades Contractors Make

These issues appear every year. If any are familiar to your situation, pay extra attention to the relevant section.

• Not separating HST collected from job revenue in records, resulting in overstated income and an unexpected HST remittance bill at filing time.
• Missing the HST registration requirement after crossing the CAD $30,000 small-supplier threshold, sometimes months or years after the obligation arose.
• Incorrectly treating all project revenue as HST-taxable without reviewing whether any portion relates to new residential construction, which may be zero-rated or subject to the new housing rebate rules.
• Not tracking subcontractor payments separately. Amounts paid to subcontractors are a business expense and generally require T4A reporting (box 048) for payments over CAD $500 in a calendar year.
• Mixing cash receipts with invoiced project revenue. All income is reportable regardless of payment method, including cash.
• No vehicle mileage log despite significant driving between job sites. Without a contemporaneous log, the deduction is at significant CRA risk.
• Not claiming CCA on tools, equipment, and a work vehicle. These are capital assets with specific CCA class rules, not current expenses.
• Missing materials purchased for jobs that were paid personally and not run through a business account.
• Claiming 100% of a truck or van used for both work and personal driving without a mileage log to support the business-use percentage.
• Not deducting tool insurance, liability insurance, or contractor bonds as business expenses.
• Missing tradesperson’s tool deduction for eligible tradespeople employed under a T4 arrangement (separate from sole-proprietor T2125 deductions).
• CPP contributions on self-employment income not planned for; both halves are due on April 30, not June 15.

01. Prior Year Documents

☐ 2024 Notice of Assessment (NOA)

The NOA issued by CRA after your 2024 return was assessed. Contains your RRSP deduction limit, any unclaimed capital or non-capital losses carried forward, and your instalment threshold for 2025.

If you cannot locate your NOA, log in to CRA My Account at canada.ca to access it. If you do not have CRA My Account set up, contact us and we can assist through our representative access.

☐ Copy of 2024 T1 return (new clients only)

The full PDF of your filed 2024 personal return. Used to confirm carryforward amounts, review prior year deduction elections, and identify positions that should be continued or changed for 2025.

If your 2024 return was prepared by another accountant, request a copy before transferring to us. If you filed using tax software, export the PDF from the software portal.

☐ Prior-year CCA schedule showing UCC balances by class (new clients only)

If you previously claimed Capital Cost Allowance on a vehicle, tools, equipment, or other depreciable assets, provide the CCA schedule from your most recent filed return showing the undepreciated capital cost (UCC) balance by class as of December 31, 2024.

The prior-year UCC balance is the starting point for the 2025 CCA calculation. Trades contractors frequently have multiple CCA classes in use simultaneously: Class 10 or 10.1 for a work vehicle, Class 8 for tools and equipment over CAD $500, and Class 12 for small tools under CAD $500. Without prior-year UCC balances, we cannot accurately determine the maximum CCA claimable this year or identify any recapture or terminal loss exposure. Ask your prior preparer specifically for the CCA continuity schedule.

☐ 2025 tax instalment payment confirmation

Total amount paid to CRA in 2025 quarterly instalment payments and the date of each payment. Instalment payments are prepayments of your expected 2025 tax liability, due on March 15, June 15, September 15, and December 15.

Trades contractors with irregular project income frequently owe quarterly instalments. If you received instalment reminder notices from CRA but paid different amounts, provide both the notice amounts and the actual payments. This affects any instalment interest calculation. Confirm what CRA received via CRA My Account under Tax instalments.

☐ Access to CRA My Account and My Business Account confirmed

Confirm that you have active access to CRA My Account (for personal tax) and CRA My Business Account (if GST/HST registered) before submitting your document package.

CRA My Account allows you to confirm your RRSP deduction limit, outstanding balances, instalment history, prior year returns, and any correspondence on file. My Business Account confirms your HST account status, filing history, and any outstanding returns. Reviewing both before filing reduces the risk of inconsistencies between what we file and what CRA already has on record.

☐ Any CRA correspondence or reassessments from 2024 or 2025

Notices of Reassessment, requests for information, audit queries, or any letter from CRA related to your tax accounts. Provide all correspondence without filtering.

Trades contractors are frequently reviewed by CRA, particularly for HST compliance and worker classification. Reassessments also change your opening RRSP room, loss carryforward, and credit balances. All correspondence must be reviewed before the 2025 return is prepared to avoid compounding errors. If you have received any CRA contact, see our guide: What to Do When CRA Contacts You.

02. Personal Information

Provide updates only for items that changed during 2025. If nothing in this section changed from 2024, note that and move on.

☐ Province of residence on December 31, 2025

Your province of residence on December 31, 2025 determines which provincial tax rates and credits apply to your full 2025 return, regardless of where you worked during the year.

If you moved provinces during 2025, provide both the old and new province and the date of the move. For contractors who travel to job sites in multiple provinces, your province of residence is determined by where you live, not where the work was performed. Note that working in another province can create provincial tax filing obligations in some cases; flag this if you worked outside your home province for extended periods.

☐ Marital status as of December 31, 2025

Your status on December 31: single, married, common-law, separated, divorced, or widowed. If your status changed during 2025, provide the date and nature of the change.

Marital status affects spousal amount credits, the GST/HST credit, RRSP spousal contributions, and several provincial credits. CRA generally considers you common-law if you have lived in a conjugal relationship for 12 continuous months, or if you are in a conjugal relationship and are the parent of a child by birth or adoption.

☐ Spouse or common-law partner information (if applicable)

Name, SIN, and 2025 net income of your spouse or common-law partner. If Teplov CPA is preparing their return as well, we will coordinate. If not, provide their estimated 2025 net income.

☐ Dependant information (if applicable)

Name, date of birth, and SIN for each dependant. For children, note childcare expenses paid in 2025 and the name and SIN of each caregiver or daycare provider.

03. Employment Income

Complete this section if you received any employment income in 2025. If your only income in 2025 was from self-employment, skip to Section 04.

☐ T4: employment income from all employers

All T4 slips received for 2025, including from any unionized or non-union employer where you were on payroll alongside or before transitioning to self-employed contract work.

Many trades workers move between employed and self-employed arrangements within the same year, or hold union employment while also taking private contracts. The combination of T4 and T4A income in the same year requires careful coordination on the T1. CPP contributions remitted through payroll for the employed period are shown in Box 16 of your T4; for the self-employed period, you pay both halves through Schedule 8. These amounts must be coordinated to avoid over-contributing. The April 30 balance owing can be significantly larger than expected when employment withholdings from part of the year do not cover the full year tax liability once contract income is added.

☐ Union dues receipt or T4 Box 44 amount (if applicable)

If you are a union member and paid union dues in 2025, confirm the amount shown in Box 44 of your T4 or obtain a receipt from your union hall.

Union dues paid on employment income are deductible as an employment expense on Line 21200 of the T1. This is separate from any trade association memberships claimed as a business expense on T2125 for self-employment work. Do not claim the same dues in both places.

04. Self-Employment Revenue

The goal here is a complete picture of all project revenue, subcontract income, materials billings, and related receipts earned in 2025 reported on Form T2125. Trades contractors often receive income from multiple general contractors or direct clients, a mix of invoiced and cash payments, and sometimes materials billed on top of labour. All amounts must be reported regardless of payment method. Revenue received in cash carries the same reporting obligation as revenue received by cheque or e-transfer.

☐ T4A slips from general contractors and construction companies (if issued)

All T4A slips issued by any general contractor or company that paid you for subcontract work in 2025. If you worked for more than one GC during 2025, collect T4A slips from each. Confirm the total matches your invoicing records. CRA receives copies of all T4As issued in your name and may cross-reference them against T2125 reported revenue.

T4A slips must be reconciled against your gross revenue on T2125 before filing. Revenue received without a T4A must still be included in T2125 gross revenue. If you performed work for residential homeowners or small clients who did not issue a T4A, those amounts are equally reportable. The absence of a slip is not a defence for not reporting the income.

☐ All invoices issued in 2025

A complete list or export of all invoices issued during 2025, including invoice date, client name, project description, labour amount, materials amount (if billed separately), HST charged, and total billed. Include invoices for projects that were completed and invoiced but not yet paid as of December 31, 2025.

Under accrual accounting, revenue is earned when the work is performed and the invoice is issued, not when payment is received. A job completed and invoiced in December belongs in the 2025 tax year even if the client does not pay until January 2026. If you track income based on deposits to your bank account only, you may be missing year-end revenue that belongs in 2025. Confirm any outstanding invoices as of December 31 and include them in your document package.

☐ Record of cash and e-transfer payments received in 2025

A summary of any payments received by cash or e-transfer in 2025 that may not be fully captured in your bank deposit records, including the date, amount, client, and job description for each.

Cash income is fully reportable. CRA audits of trades contractors frequently focus on unreported cash income, particularly in residential renovation and repair work. If a portion of your work is paid in cash by homeowners and not run through your bank account, it must still be reported on T2125. Maintaining a job log or work order record for every job, including cash jobs, is the single most effective protection against a CRA net worth assessment.

☐ Materials billed to clients separately from labour (if applicable)

If you purchase materials and bill them to clients at cost or with a markup, provide the total materials revenue billed in 2025 and the corresponding materials cost. Both amounts are reported on T2125: materials billed as revenue, materials purchased as a cost of goods sold or direct expense.

Do not net materials billings against materials costs and report only the margin. Gross revenue on T2125 must include the full amount billed to clients for both labour and materials. The cost of materials is then deducted as a business expense. HST also applies to materials billed to clients when you are registered; ensure your invoices charge HST on the full amount including materials.

☐ Business bank statements for 2025

Complete bank statements for your business account for all 12 months of 2025. Used to reconcile all deposits against invoiced revenue, identify missing payments, and confirm that all income sources have been captured.

Maintain a dedicated business bank account separate from your personal account. Mixing personal and business transactions in the same account makes expense substantiation significantly harder and creates risk that legitimate business expenses are missed or that personal deposits are mistakenly treated as income. If your accounts are mixed, flag this and we will work through the reconciliation. CRA auditors routinely request bank statements for trades contractors and compare total deposits to reported income.

05. HST Records

HST compliance is one of the most significant and most frequently missed obligations for self-employed trades contractors in Ontario. Most trades work (labour and materials supplied together) is subject to HST at 13% in Ontario. Once your total taxable revenues cross CAD $30,000 in a single calendar quarter or over four consecutive calendar quarters, you are required to register for HST and begin collecting and remitting it. Many contractors miss this threshold or delay registration, creating retroactive collection liability. If you crossed the threshold at any point and have not registered, that is the first item to address before we prepare your return.

☐ HST registration status: confirm whether you are registered

Your Business Number (9 digits) and, if registered, your HST program account number (for example, 123456789RT0001), plus your registration and effective dates, and whether you file monthly, quarterly, or annually.

If you are not registered but your taxable revenues exceeded CAD $30,000 in a single calendar quarter or over four consecutive calendar quarters ending in 2025, contact us before filing. Late registration can create a deemed collection obligation retroactive to the date registration was required, meaning CRA may assess HST on revenue you collected without charging it to clients.

☐ Total HST collected from clients in 2025

The total HST charged on invoices to clients in 2025. If you use accounting software, provide the HST collected report. If you track manually, provide the total HST amount from all invoices issued during 2025.

HST collected belongs to CRA, not to you. It must be reported and remitted on your HST returns. A common error is treating HST collected as part of your personal income. Your T2125 gross revenue should reflect the total invoiced to clients before HST; HST collected is reported separately on your HST return and is not part of your taxable business income on the T1.

☐ Input tax credits (ITCs): HST paid on business purchases in 2025

The total HST paid on business expenses and purchases in 2025 that qualify as input tax credits. This includes HST on materials, tools, equipment, fuel, vehicle maintenance, and other business costs where you paid HST as part of the purchase price.

ITCs reduce the amount of HST you owe to CRA. To claim an ITC, you must have a receipt or invoice showing the supplier’s Business Number, the date, the total amount, and the HST amount (or a statement that HST is included). Receipts without a Business Number do not qualify for ITC claims. Keep all supplier receipts that include HST paid; they are required for both your HST return and your T2125 expense documentation.

☐ HST returns filed for 2025 and amounts remitted (if registered)

Copies of all HST returns filed for reporting periods within or overlapping 2025, including filing confirmations, any amounts owing or refunded, and payment records confirming remittance to CRA.

HST returns must be reconciled to invoiced revenue before filing your T1. The taxable revenue figure on your HST returns and the gross revenue on your T2125 should be consistent, with any differences explained (for example, zero-rated supplies or timing differences across fiscal periods). Unexplained gaps between the two figures are a common trigger for CRA review.

☐ New residential construction or substantial renovation work (if applicable)

If any of your 2025 work involved new home construction or substantial renovation of residential property, identify those contracts separately and note whether you were the primary contractor or a subcontractor to a GC.

HST applies differently depending on the type of work and your position in the construction chain. Subcontractors billing a registered GC for labour and materials generally charge HST at 13%. However, specific rules around new residential construction, the HST New Housing Rebate, and who is responsible for collecting and remitting HST can vary based on the contract structure. Flag any residential new construction work during intake for a separate review before filing your HST return.

☐ HST Quick Method election (if applicable)

If you elected to use the Quick Method of HST accounting, provide your election date and confirm the method has been applied consistently. Under the Quick Method, you remit a fixed percentage of gross sales including HST rather than tracking actual HST collected and ITCs separately.

The Quick Method can simplify HST compliance but may not always result in the lowest remittance amount, particularly for trades contractors with significant materials costs and large ITC claims. If you have not formally elected the Quick Method but have been remitting on that basis, flag this during intake. We will review whether the election was properly made and whether it remains the best approach for your situation.

06. Subcontractor Payments

If you hired other tradespeople or labourers as subcontractors in 2025, their payments are a deductible business expense on T2125. They also create a separate reporting obligation: payments for services over CAD $500 to an unincorporated individual in a calendar year generally require a T4A slip (box 048). This section is separate from your own labour revenue and relates only to amounts you paid out to others.

☐ Total payments made to subcontractors in 2025

A list of all individuals or businesses paid for subcontract labour or services in 2025. For each, provide the name, amount paid, SIN or Business Number, and type of work performed.

Reporting fees-for-service rules generally require service payments over CAD $500 in a calendar year to be reported on a T4A (box 048). T4A slips and the summary are due by the last day of February following the calendar year. If you have already issued T4As for 2025, provide copies. If not, flag this during intake so we can confirm your obligations before filing your own return. Failure to issue required T4As does not disqualify the deduction, but it creates a separate compliance risk.

☐ Worker classification: confirm subcontractors are not employees

For each person you paid as a subcontractor in 2025, confirm they operated independently, set their own hours and methods, used their own tools, and bore risk of loss on their work.

CRA may reclassify a subcontractor relationship as employment if the facts point to an employer-employee arrangement. The relevant CRA test focuses on control, tools ownership, chance of profit, risk of loss, and integration. Reclassification creates retroactive payroll obligations including CPP and EI remittances, plus penalties. If any subcontractor relationship is ambiguous, flag it during intake before filing.

07. Shared Expenses (Allocation Required)

These expenses require a defensible business-use allocation before any deduction can be claimed. Vehicle use is the most significant and most scrutinized shared expense for trades contractors. A truck or van used to travel between job sites, haul tools and materials, and pick up supplies is a legitimate business vehicle, but only the business-use portion is deductible and a mileage log is the required documentation. See our guide: Home Office and Vehicle Expenses: What Self-Employed Canadians Can Actually Deduct.

☐ Mileage log for business vehicle use in 2025

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

Trades contractors routinely drive to multiple job sites per day, make supply runs to hardware stores and suppliers, and travel to client meetings or estimates. All of this is legitimate business driving that can be claimed, but only with documentation. A contemporaneous log is the strongest support. Without one, vehicle deductions are at high risk of being reduced or denied on review. If you do not have a log for 2025, flag this now so we can discuss your options before filing. Travel between your home and a regular fixed job site that has become your principal place of work is generally not deductible; travel from one job site to another during the day is deductible.

☐ Total kilometres driven in 2025: business and personal

Used to calculate the business-use percentage applied to all vehicle expenses. Odometer readings at January 1, 2025 and December 31, 2025 are the most reliable source. If you did not record odometer readings, use your vehicle service records as a reference point.

☐ Vehicle expense receipts or annual totals by category

Fuel, insurance, repairs and maintenance, registration, business-related parking and tolls, and loan interest or lease payments. Annual totals by category are sufficient for intake; retain individual receipts in case of CRA review.

For a truck or van used primarily for trades work, the business-use percentage can be high, but it must be supported by the mileage log. Lease and financing interest deductions are subject to annual CRA limits that change year to year. Do not estimate these amounts independently; provide the lease agreement or financing statement and we will apply the correct limits.

☐ Home workspace details: size and use (if applicable)

Total home square footage, workspace square footage, and whether the space is dedicated to business use only or mixed-use. Relevant if you use a portion of your home for quoting, invoicing, scheduling, or storing business records.

Many trades contractors do not have a commercial office and manage all administrative work from home. A home office deduction is available if the workspace is your principal place of business or is used exclusively and regularly to meet clients. Storage of tools and materials in a garage or basement may also qualify for a partial home expense deduction depending on the facts; flag this during intake. Home office expenses cannot be used to create or increase a business loss; they can reduce net income to zero but no further. See our guide: Home Office and Vehicle Expenses: What Self-Employed Canadians Can Actually Deduct.

☐ Rent receipts (renters) or mortgage interest details (homeowners)

Renters: annual rent total or monthly receipts. Homeowners: mortgage statement showing the interest and principal split for 2025.

Only the interest component of mortgage payments is included in the home office calculation; principal repayment is not. Request the year-end interest summary from your lender rather than estimating from your monthly payment amount.

☐ Utility bills for 2025: annual totals

Electricity, heating, and water. Annual totals are sufficient for intake. Retain underlying statements in case of CRA review.

☐ Internet: annual total and estimated business-use percentage

Allocation required. Do not claim 100% unless the connection is used exclusively for business. A household internet connection shared with family members requires a reasonable allocation. The allocation must be defensible if reviewed.

☐ Mobile phone: annual total and business-use percentage

Common business uses for trades contractors: client calls, quoting and scheduling, supplier orders, navigation, photos of job site conditions, and communication with subcontractors.

A separate business-only line can be claimed in full. A shared personal plan requires a percentage allocation. Phone use is typically high for trades contractors who run their own jobs, and a well-supported allocation is more valuable than an unsupported 100% claim.

08. Direct Business Expenses

These expenses are receipt-based and do not require a percentage allocation, provided they were used entirely or primarily for business. Materials, tools and equipment, licensing, and insurance are the most significant categories for trades contractors and are frequently under-documented at filing time. Keep all receipts; for CRA review of trades contractors, documentation of materials and equipment purchases is particularly important.

☐ Materials and supplies purchased for jobs in 2025

All materials purchased for use in client projects in 2025: lumber, pipe, wire, fittings, hardware, concrete, paint, fasteners, HVAC components, electrical supplies, and any other trade-specific materials consumed on the job. Include supplier invoices, hardware store receipts, and lumber yard statements.

Materials costs are deductible as a direct business expense when consumed in the production of revenue. Keep all receipts organized by supplier. Materials purchased for a specific job and billed to the client should match the materials revenue reported in Section 04. Materials purchased for stock or general use are deductible in the year consumed, not necessarily in the year purchased; flag any significant year-end materials inventory.

☐ Small tools purchased in 2025 (cost under CAD $500 per item)

Hand tools, power tool accessories, measuring equipment, safety equipment, and any other individual tools or equipment purchased in 2025 with a cost of less than CAD $500 per item before tax.

Small tools with a cost under CAD $500 (Class 12) can be written off at 100% in the year of purchase and are not subject to the half-year rule. Keep all receipts with the purchase date and amount. Consumable supplies like drill bits, blades, and abrasives may qualify as a direct current expense rather than a capital cost, depending on the item.

☐ Major tools and equipment purchased in 2025 (cost CAD $500 or more per item)

Power tools, compressors, generators, ladders, scaffolding, trailers, welding equipment, diagnostic equipment, and any other equipment with a cost of CAD $500 or more per item. Include purchase date, vendor, amount, and whether the item is used exclusively for business or also personally.

Major tools and equipment are capital assets claimed through CCA, generally Class 8 (20% declining balance). Do not deduct the full cost as a current expense. For 2025 purchases, do not assume a full first-year write-off; provide receipts and we will confirm the correct class and first-year rule, including any applicable accelerated investment incentive. An item used for both business and personal purposes requires a business-use allocation before CCA is calculated.

☐ Tool insurance and equipment floater premiums

Annual premium for tool and equipment coverage, including any floater added to a commercial or personal property policy to cover tools at job sites.

Tool and equipment insurance is a deductible business expense. Retain the policy invoice and annual premium total. If your coverage is bundled into a broader commercial policy, request a breakdown of premiums by coverage type from your insurer.

☐ Commercial general liability (CGL) insurance premium

Annual premium for commercial general liability coverage required to work on job sites or for specific general contractors.

CGL insurance premiums are fully deductible as a business expense. Many general contractors require proof of CGL coverage before allowing a subcontractor on site; retain the policy invoice as both a tax record and a compliance document.

☐ Trade licence fees, permit fees, and certification costs

Provincial or municipal licence renewal fees for your trade (for example, Certificate of Qualification renewal, electrical contractor licence, refrigeration licence, gas technician licence), building permits pulled for client jobs and charged back, and any certification or recertification fees paid in 2025.

Licence and permit fees required to carry on your trade are deductible as a business expense on Form T2125. Permits pulled for client jobs and billed back to the client should be matched against the corresponding client billings in your revenue records.

☐ Continuing education and certification receipts

Course fees, exam fees, and registration fees for any safety certifications, trade updates, or professional development completed in 2025 (for example, WHMIS, Working at Heights, first aid, Red Seal exam preparation, or trade-specific code updates).

Training required to maintain certifications or improve skills required in your current trade is deductible. Keep receipts and a short note on business relevance for any course. Note that the Canada Training Credit may also apply to certain eligible training fees, but you cannot claim the same cost on both T2125 as a business expense and as a Canada Training Credit on the T1. We will determine the more advantageous treatment.

☐ Protective clothing and safety equipment

Work boots, hard hats, safety glasses, gloves, high-visibility vests, fall arrest equipment, respirators, and any other personal protective equipment purchased in 2025.

Protective equipment and safety clothing required for your trade and not suitable for everyday personal use are deductible. General-purpose work clothing (jeans, t-shirts) without trade-specific branding or protective function is generally not deductible even if worn only for work. Branded company uniforms may qualify.

☐ Fuel for equipment and generators (separate from vehicle fuel)

Fuel purchased for use in generators, compressors, pressure washers, or other equipment at job sites in 2025. Keep this separate from vehicle fuel claimed in Section 07.

Fuel consumed in operating equipment at a job site is a direct business expense, not a vehicle expense, and does not require a mileage-based allocation. Keep receipts and note the equipment the fuel was purchased for.

☐ Equipment storage, shop rental, and yard rental (if applicable)

Monthly or annual costs for renting a storage unit, garage, commercial space, or yard to store tools, equipment, and materials when not in use or between jobs.

Storage and workspace rental costs paid for a commercial premises or storage unit separate from your home are fully deductible as a business expense. Do not claim the same storage cost as both a commercial rent expense and as part of a home office calculation.

☐ Trade association and professional membership fees

ECAO, MCAC, SMACNA, OGCA, or other trade association membership dues paid in 2025 that are directly related to your contracting business.

Membership dues for associations directly related to your trade are deductible. Union dues paid on self-employment income are treated differently from union dues on employment income; flag any union dues paid in the context of your self-employed work during intake.

☐ Estimating, project management, and invoicing software

Jobber, Housecall Pro, ServiceTitan, BuilderTREND, or any other estimating, scheduling, dispatch, or invoicing platform subscription paid in 2025.

☐ Payments to an assistant or office support person (if applicable)

Invoices or payment records, total amount paid, and type of work performed (for example, bookkeeping, answering calls, scheduling).

Under fees-for-service reporting rules, payments over CAD $500 in a calendar year generally must be reported on a T4A (box 048). T4A slips and the summary are due by the last day of February following the calendar year. 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 premiums paid through an eligible PHSP provider for yourself, your spouse or common-law partner, and household members in 2025. Provide the annual premium total and the plan provider name.

PHSP premiums may be deductible as a business expense only if CRA conditions are met (including active engagement in the business and meeting the income tests described by CRA). You cannot deduct PHSP premiums if another person deducted them or if anyone claimed them as medical expenses. PHSP premiums must be paid to a third-party provider; you cannot simply write off out-of-pocket medical bills as a business expense without a qualifying plan in place.

☐ Accounting and legal fees

Teplov CPA fees for bookkeeping and tax return preparation, legal fees for reviewing or drafting subcontractor agreements or client contracts, and fees paid to other professionals for services related to your contracting business in 2025.

Accounting fees that relate to preparing your business income and expense reporting (including the T2125 and related bookkeeping) are generally deductible as a business expense. Legal fees for reviewing a subcontractor agreement or client services contract are deductible. Legal fees for a personal matter are not.

☐ Business banking fees

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

☐ Meals and entertainment (business-related only)

Receipts for meals and entertainment with a clear business purpose. Include date, amount, venue, names of attendees, and the business purpose for each claim.

Only 50% of eligible meal and entertainment expenses are deductible. The business purpose must be documented at the time of the expense. Meals with clients, GCs, or subcontractors for work-related discussions qualify. Meals purchased alone while working at a remote job site may also qualify depending on the circumstances. Do not claim the full cost.

☐ Business travel expenses (if applicable)

Flights, hotels, taxis, rideshare, and transit costs for travel to remote job sites, industry trade shows, or documented business meetings outside your regular work area. Separate from local vehicle expenses claimed in Section 07.

09. Investment Income

☐ T5: interest and dividend income

T5 slips from all financial institutions for interest earned on savings accounts, GICs, and bonds, and for dividends received from Canadian corporations in 2025.

Interest earned inside a TFSA is not reportable. Interest in a non-registered account is fully taxable. If you received dividends from your own corporation, the T5 issued by the corporation must be included here.

☐ T3: trust and mutual fund income

T3 slips from mutual funds, ETFs, and trusts for income allocations in 2025. T3 slips are typically issued in March and are sometimes delayed; do not file without confirming all T3s are in hand.

☐ T5008: securities transactions

Issued by brokerages for proceeds of securities sold in 2025. The T5008 shows proceeds only; you must also provide the adjusted cost base and transaction costs for each disposition to calculate the capital gain or loss.

☐ Foreign bank and investment accounts

If you hold any foreign financial account, confirm the year-end balance and whether the total cost of all specified foreign property exceeded CAD $100,000 at any time in 2025.

The CAD $100,000 threshold is measured at cost, not market value. Penalties for failure to file a required T1135 start at CAD $25 per day to a maximum of CAD $2,500. T1135 is a separate filing obligation from the T1 return, generally due on or before the due date of your income tax return.

10. Year-End Position

Business income is generally reported on the accrual method for tax purposes. If you track income and expenses based on bank deposits and payments, we may need year-end adjustments for work completed but not yet invoiced or paid, and for expenses incurred but not yet paid. These items will not be visible from your bank account alone.

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

A list of all invoices outstanding as of December 31, 2025 where the work was completed or substantially completed but payment had not been received. Include client name, invoice date, job description, and amount owing.

Under accrual accounting, revenue is earned when the work is performed and the right to receive payment is established. A job completed on December 20 belongs in the 2025 tax year even if the client does not pay until February 2026. This is a common gap for trades contractors who track income only from bank deposits. Confirm all outstanding invoices as of December 31 from your invoicing records or software.

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

A list of business expenses incurred before December 31, 2025 but not yet paid. Examples: a supplier invoice for materials delivered in December, a subcontractor invoice outstanding at year-end, an accounting invoice received in December and paid in January.

Under accrual accounting, an expense is deductible in the year it is incurred, not the year it is paid. 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.

☐ Year-end materials inventory (if applicable)

An estimated value of materials on hand as of December 31, 2025 that were purchased in 2025 but not yet consumed on a job. Include the type and estimated cost of materials held in your truck, storage, or shop.

Materials purchased but not yet consumed are not deductible until the year they are used in the production of revenue. If you purchased a significant quantity of materials in late 2025 that remain on hand at year-end, those costs should be held as inventory rather than expensed in 2025. For small amounts, CRA generally accepts the full cost as expensed in the year of purchase; flag any significant year-end inventory balance for review.

☐ Sale or disposal of business assets in 2025 (if applicable)

If you sold, traded, or disposed of any business asset in 2025 (a vehicle, tool, equipment, or trailer previously claimed on a CCA schedule), provide the date of disposition, proceeds received, original purchase date, and original cost.

Disposing of a business asset may trigger recapture of CCA previously claimed (taxable income) or a terminal loss (deductible) depending on the proceeds and the remaining undepreciated capital cost of the class. This applies to vehicles traded in at a dealership as well as equipment sold privately.

☐ Bad debts (if applicable)

If a client invoice was previously included in income on an accrual basis and has become genuinely uncollectible in 2025, it may be deductible as a bad debt. Provide the original amount, the year it was included in income, and documentation of the collection attempts made.

A bad debt deduction requires that the amount was previously reported as income, that you have taken reasonable steps to collect, and that the debt is genuinely uncollectible. Writing off an amount you simply chose not to pursue is not sufficient.

11. Registered Plans

☐ RRSP contribution receipts: 2025 and first 60 days of 2026

Official receipts for all RRSP contributions made between January 1, 2025 and March 2, 2026. Contributions in the first 60 days of 2026 can be deducted on your 2025 T1 or carried forward. Collect receipts from all institutions where RRSP accounts are held.

Your 2025 RRSP deduction limit is shown on your 2024 NOA. The 2025 maximum new contribution room is 18% of 2024 earned income to a maximum of CAD $32,490, minus your pension adjustment, plus unused room carried forward. Net self-employment income is earned income for RRSP purposes. Trades contractors often have no workplace pension, making RRSP and TFSA planning particularly important for long-term retirement savings. Over-contributing triggers a penalty of 1% per month on the excess; confirm your available room before contributing.

☐ RRSP deduction election: confirm amount to deduct in 2025

You are not required to deduct RRSP contributions in the year made. If your 2025 income is lower than expected due to a slow project year, it may be more tax-efficient to contribute now and deduct in a future higher-income year.

The contribution builds tax-free growth inside the RRSP regardless of when the deduction is claimed. We will model the deduction timing as part of your return preparation if you flag this as a question.

☐ First Home Savings Account (FHSA): contributions and withdrawals (if applicable)

If you opened or contributed to an FHSA in 2025, provide the T4FHSA slip. The 2025 annual contribution limit is CAD $8,000 with a lifetime limit of CAD $40,000. FHSA contributions are deductible and qualifying withdrawals for a first home purchase are tax-free.

☐ Home Buyers’ Plan (HBP) repayment (if applicable)

If you made an HBP withdrawal in a prior year, the required 2025 repayment amount is shown on your 2024 NOA. If the minimum repayment is not made by March 2, 2026, the shortfall is added to your 2025 taxable income. Note: the HBP withdrawal limit was increased to CAD $60,000 for withdrawals made after April 16, 2024, and the grace period before repayments must begin has been extended to five years for eligible withdrawals made between January 1, 2022 and December 31, 2025.

12. Deductions and Personal Tax Credits

☐ Tradesperson’s tools deduction (if applicable)

If you also have employment income on a T4 from a construction or trades employer and purchased eligible tools in 2025 for that employment, you may qualify for the tradesperson’s tools deduction on Line 22900 of the T1. The 2025 deduction limit and eligible tool cost threshold should be confirmed against the current CRA guidance before filing.

The tradesperson’s tools deduction applies to employed tradespeople (T4 income), not to tools claimed as a self-employment expense on T2125. These are separate and distinct deductions with different eligibility rules. If you have both T4 employment income and self-employment income in the same year, we will review eligibility for both separately. Do not claim the same tools under both the employment deduction and as a T2125 business expense.

☐ Medical expenses

Receipts for eligible medical expenses paid for yourself, your spouse, and dependants in any 12-month period ending in 2025. Request an annual statement from your pharmacy and dentist rather than gathering individual receipts.

Only the amount exceeding the lesser of the 2025 indexed threshold (CAD $2,834) or 3% of net income qualifies for the credit. If you have a PHSP through your business, confirm which costs were reimbursed through the PHSP and which were paid personally; costs already deducted as a PHSP business expense on T2125 cannot also be claimed as a personal medical expense credit on the T1.

☐ Charitable donation receipts

Official tax receipts for all charitable donations to registered Canadian charities in 2025. Include any unused donation carryforwards from prior years shown on your 2024 NOA. Donations can be pooled with a spouse and claimed on one return to maximize the amount above the CAD $200 base.

☐ Childcare expenses (if applicable)

Receipts for daycare, after-school care, summer day camps, and other eligible childcare expenses paid in 2025. Include the amount paid, the provider’s name, and the provider’s SIN or business number.

Childcare expenses are generally claimed by the lower-income spouse. The deduction limit is the lesser of actual expenses, CAD $8,000 per child under 7, CAD $5,000 per child aged 7 to 16, or two-thirds of the lower-income earner’s earned income. Net self-employment income is earned income for this purpose.

☐ Moving expenses (if applicable)

If you moved at least 40 kilometres closer to a new place of business or work in 2025, provide receipts for transportation, storage, travel, and temporary accommodation. Moving expenses can only be deducted against income earned at the new location.

☐ Ontario Trillium Benefit: property tax or rent paid

If you are an Ontario resident, provide the total property tax paid in 2025 on your principal residence, or total rent paid if renting. Include the address and landlord details if renting.

☐ Digital news subscription receipts

Receipts for eligible digital news subscriptions to qualifying Canadian news organizations in 2025. The federal credit rate and eligible subscription parameters should be confirmed against the 2025 CRA line guidance before filing.

13. Incorporation and Structuring Flags

These items do not require documents to gather; they are questions to answer before your return is prepared. The answers affect planning decisions made as part of the return, not after.

☐ Worker classification risk: independent contractor vs. employee

If you work primarily for one general contractor on an ongoing basis, follow their direction on how the work is done, use tools or equipment supplied by the GC, and do not take on risk of loss for deficiencies, flag the nature of the relationship before we prepare your return.

CRA may challenge whether a working arrangement constitutes self-employment or employment, and the construction industry is an active area of CRA focus. If reclassified as employment, T2125 self-employment deductions are disallowed and significant implications follow for both you and the GC including retroactive CPP and EI obligations. The relevant CRA test focuses on control, tools ownership, chance of profit, risk of loss, and integration. Flag this during intake if the arrangement is ambiguous.

☐ Personal Services Business (PSB) risk (if you are already incorporated)

If you currently operate through a corporation and provide services to a GC or construction company where you would otherwise be considered an employee, flag this before filing. PSB classification significantly limits deductible expenses and carries additional tax costs.

PSB risk is a common and costly error for tradespeople who incorporated to take on a single large contract without a full review of the structure. If you are already incorporated and this situation may apply, raise it at intake before filing the T2 corporate return or your personal T1.

☐ Incorporation timing question

If you are considering incorporating in 2026, flag it before your 2025 return is prepared. The tax filing position established on the 2025 T1, particularly around vehicle and equipment ownership and retained earnings equivalent, affects the optimal timing and structure of the incorporation.

For most trades contractors, the incorporation analysis becomes relevant when net self-employment income consistently exceeds CAD $80,000 to CAD $100,000 and a meaningful portion of income can be retained inside the corporation rather than withdrawn immediately. We will run the specific comparison for your numbers as part of the return preparation if you flag it. See our guide: Should I Incorporate? A Framework for Self-Employed Canadians.

14. Digital Records and Audit Protection

CRA audits and review requests can arrive two to four years after filing, and longer if CRA suspects misrepresentation or fraud, in which case there is no limitation period. Trades contractors are a higher-audit-risk category, particularly for HST compliance, unreported cash income, and worker classification. The records you gather now may need to be produced in 2027 or 2028. CRA generally requires business records and supporting documents to be kept for six years from the end of the last tax year they relate to. This section protects the deductions you have claimed and reduces the risk of disallowance if CRA asks questions later. See also: What to Do When CRA Contacts You.

☐ Job log or work order record for all jobs completed in 2025

A record showing each job performed in 2025: client name, address, description of work, start date, completion date, and amount invoiced. This can be a list, spreadsheet, or export from invoicing software.

A job log is the primary defence against a CRA net worth assessment, which compares your reported income to your estimated cost of living and asset accumulation. If CRA concludes your lifestyle is inconsistent with your reported income, they may assess additional income based on the gap. A complete job log showing all revenue sources makes this assessment much harder to sustain. It also provides the audit trail needed to match every deposit in your bank account to an invoiced job.

☐ Digital backup of all physical receipts

Scan or photograph all paper and thermal receipts before submitting originals or filing. This applies especially to hardware store receipts, fuel receipts, and any printed receipts for materials, 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.

☐ Mileage log retained with 2025 tax records

Store a complete copy of your 2025 mileage log alongside your tax records. If your log is kept in an app, export a PDF or CSV copy before filing.

Vehicle expenses are one of the most frequently reviewed deductions for self-employed tradespeople. A complete mileage log is the primary defence if CRA questions the business-use percentage applied. Apps that generate logs automatically are only useful if the underlying data was recorded contemporaneously; a reconstructed log from memory is significantly weaker.

☐ Subcontractor documentation retained: invoices and payment records

Store invoices received from all subcontractors and payment confirmations alongside your 2025 tax records. Confirm subcontractor names, Business Numbers or SINs, and amounts paid are available for T4A filing purposes.

Subcontractor payments are both a deductible expense and a T4A reporting obligation. The same documentation that supports the deduction also confirms the business purpose and the nature of the arrangement. CRA auditors reviewing a trades contractor return will routinely ask for subcontractor invoices and payment records.

☐ All 2025 records organized in a dedicated tax folder

Organize all 2025 tax records into a single cloud folder with subfolders by category: income and invoices, HST, subcontractors, shared expenses, direct expenses, tools and equipment, year-end position, prior year. Store a local backup copy.

CRA review requests typically give 30 days to produce documentation. A well-organized folder reduces that exercise from several weeks of searching to a single export. The folder structure should mirror the sections of this checklist so records can be located and produced by category without searching across multiple tools and email threads.