T2125 Filing Guides (2025 & 2026)
Owner: Mahdi Moradi Status: Draft Version: 1.0.0 Last Updated: 2026-03-17 Applies To: Company
Disclaimer: This is a reference guide based on publicly available CRA information. Consult a qualified Canadian tax professional before filing.
Part 1: 2025 T2125 Filing Guide
Goal: Report $0 revenue + legitimate business expenses = clean business loss
Step 1: Start Your T2125
In Wealthsimple: Income → Self-Employment → Add a business (T2125)
| Field | Value |
|---|---|
| Business name | Your legal name (Mahdi Moradi) |
| Business address | Home address |
| Business type | Technology consulting, AI solutions, Shopify development, digital services |
| Fiscal period | Jan 1 - Dec 31, 2025 |
| First year? | Yes |
| GST/HST number? | No |
Step 2: 2025 Business Income
- Gross income: $0
- Work was done but payment not received until 2026
- CRA requires reporting income when received, not when earned
Step 3: 2025 Business Expenses
| Line | Category | Amount | Notes |
|---|---|---|---|
| 8521 | Advertising | $0 | Unless ads were run |
| 8523 | Meals & entertainment | 50% of any biz meals | Optional |
| 8811 | Office supplies | Estimate | Printer ink, small supplies |
| 8960 | Salaries (wife) | $500-$2,000 | Real work, paid in 2025 cash |
| 9180 | Phone & internet | ~$720 | 30% of $1,200 phone + $1,200 internet |
| 9200 | Other expenses | ~$245.70+ | Domains, hosting, Shopify, software |
| 9060 | CCA | Calculated | Desktop $300, monitors $80, desk $100, printer $40 |
| 9945 | Home office | $0 | Cannot claim — used $500 employment deduction |
Step 4: 2025 Net Loss
Expected: $1,000-$4,000 (reduces taxable employment income)
Step 5: Wife's Filing
- Reports wages received as "other employment income" on her T1
- No T4 required for spouse wages in a sole proprietorship
- Likely pays $0 or minimal tax
Part 2: 2026 T2125 Filing Guide
Goal: Report real business income + maximize legal deductions = target ~$20,000 loss
Step 1: Start Your 2026 T2125
Same as 2025 but: First year? No. Business continues normally.
Step 2: 2026 Business Income
| Source | Expected Amount |
|---|---|
| Shopify sales | $3,000-$5,000 |
| AI platform | $500-$1,500 |
| Consulting | $500-$2,000 |
| Cookie business | $500-$1,500 |
| Total | $5,000-$8,500 |
Step 3: 2026 Business Expenses
| Line | Category | Amount | Notes |
|---|---|---|---|
| 8521 | Advertising | $1,000-$3,000 | Facebook, TikTok, Google ads |
| 8523 | Meals & entertainment | $100-$300 (50%) | Business planning dinners |
| 8811 | Office supplies | As needed | Printer ink, packaging |
| 8960 | Salaries (wife) | $5,200-$15,600 | $20-30/hr, 5-10 hrs/week |
| 8960 | Salaries (kids) | $1,000-$2,000 | $12-15/hr, age-appropriate tasks |
| 9180 | Phone & internet | Business % | 30-50% of bills |
| 9200 | Other: Shopify | $700-$1,100 | Subscription + apps |
| 9200 | Other: Software | $1,000-$2,000 | ChatGPT, Canva, Adobe, GitHub, cloud |
| 9200 | Other: Domains/hosting | $300-$800 | All business domains |
| 9200 | Other: Cookie supplies | $400-$1,000 | Ingredients, packaging, shipping |
| 9060 | CCA (equipment) | $1,200-$2,000 | Laptop, phone, monitor, accessories |
| 9281 | Motor vehicle | $500-$1,500 | Business trips, KM log required |
| 9945 | Home office | $2,000-$3,000 | 10-15% of mortgage int, utilities, property tax, insurance |
Step 4: 2026 Total
| Item | Amount |
|---|---|
| Total Deductions | $13,600-$33,000 |
| Revenue | $5,000-$8,500 |
| Net Loss | $10,000-$20,000 |
Step 5: Filing
- Wife reports her wages as "other employment income" — likely $0 tax
- Wealthsimple applies business loss against employment income
- Wealthsimple optimizes credits between both returns
CRA Reasonable Expectation of Profit Letter
To Whom It May Concern,
This letter confirms that the business operated by Mahdi Moradi, under the trade name Bornara AI, has a clear and credible reasonable expectation of profit.
The business will generate at least $5,000 in revenue during the 2026 tax year through:
- Shopify gift sales (Giftifye.com)
- AI platform subscriptions
- Technology consulting services
- Cookie business sales
The business has a structured marketing plan, diversified revenue streams, and a documented growth strategy. All expenses incurred are directly related to revenue generation and business development. The business has a documented 5-year plan targeting profitability by 2027-2028.
Sincerely, Mahdi Moradi Sole Proprietor