When should I register for a GST/HST number?

You are required to register for a GST/HST number once your total taxable revenue exceeds $30,000 in a single calendar quarter or over four consecutive quarters. This threshold applies to most sole proprietors and side hustlers in Canada. Once you cross it, you have 30 days to register with the CRA. NorthOS tracks your revenue and alerts you when you are approaching the $30K threshold so you are never caught off guard.

Does NorthOS support T2125 and T776 tax forms?

Yes. NorthOS is built around the T2125 (Statement of Business or Professional Activities) and T776 (Statement of Real Estate Rentals) forms. Every expense category in NorthOS maps directly to a line on these forms, so when tax season arrives, your data is already organized the way the CRA expects it.

What is the "Idea Incubator" in NorthOS?

The Idea Incubator is a dedicated workspace inside NorthOS for business ideas you are still developing. You can log expenses, track early revenue, and document your concept before it becomes a formal business. This helps you build a paper trail from day one — which is useful if you ever need to demonstrate a profit motive to the CRA.

Does NorthOS use the Quick Method or Regular Method for GST/HST?

NorthOS supports both the Quick Method and the Regular Method for GST/HST remittance. When you set up your account, you choose which method applies to your business. NorthOS then calculates your net tax owing accordingly. If you are unsure which method is right for you, our resources section explains the difference and when each method makes financial sense.

NorthOS — GST/HST Bookkeeping for Canadian Sole Proprietors

Before you start — what you need

Your SIN
Your business name and address (if you have one)
Your gross revenue for the year — total income before expenses
All your business expense receipts organized by category
Your home office square footage if you work from home
Your mileage log if you drove for business
Last year's T2125 if you have CCA carry-forwards

Step 1 — Identification (top of the form)

Fill in your name, SIN, and business name. For Industry Code — this is a 6-digit code from CRA's T4002 guide that describes your main business activity. Common ones: 541100 (Legal services), 541800 (Advertising/PR), 711500 (Independent artists/writers), 454110 (Electronic shopping/eBay resellers). If you're unsure, search "CRA industry code" + your profession.

For fiscal year — most sole proprietors use January 1 to December 31.

For accounting method — most sole proprietors use cash method (you record income when received, expenses when paid).

Step 2 — Internet Business Activities (Part 2)

Only complete this if you earn income through a website. Enter the URL and the percentage of your gross income that comes from online sales or services. Most freelancers who invoice clients directly can skip this section or enter 0%.

Step 3 — Business Income (Part 3A)

This is where you report your revenue. Key lines:

Line 8000 — Gross Sales, Commissions, or Fees

Your total revenue before expenses and before GST. If you're GST-registered, do not include the GST you collected — that's not your income. Add up every payment you received from clients during the year.

Line 8299 — Gross Profit

For most service businesses with no inventory, this equals Line 8000. If you sell physical products, subtract your cost of goods sold first.

Step 4 — Business Expenses (Part 4)

This is the largest section and where most of your tax savings come from. For each expense category, enter the total amount you spent during the year for business purposes only.

Line	Category	What to enter
8521	Advertising	Total spent on ads, website, business cards, social media
8523	Meals & Entertainment	50% of client meals and entertainment — enter the already-reduced amount
8690	Insurance	Business insurance premiums
8710	Interest & Bank Charges	Business bank fees and loan interest
8760	Business Taxes, Licences	Business registration fees, professional dues
8810	Office Expenses	Small office supplies (pens, stamps, printer paper)
8811	Supplies	Materials used directly in your work
8860	Professional Fees	Accounting, legal, bookkeeping fees
8910	Rent	Office or studio rent
9060	Salaries & Wages	Payments to employees or subcontractors
9200	Travel	Business travel (flights, hotels, transit)
9220	Telephone & Utilities	Business portion of phone and internet
9270	Other Expenses	Software subscriptions, platform fees, anything else
9281	Motor Vehicle	Business portion of vehicle costs (requires mileage log)
9936	Capital Cost Allowance	Depreciation on equipment — calculated in Area A

Note: For meals and entertainment — the 50% limit is already built into the form. Enter 50% of what you actually spent, not the full amount.

Step 5 — Home Office Expenses (Part 7)

If your home is your principal place of business, calculate your workspace percentage: divide your workspace square footage by your total home square footage. Apply that percentage to your eligible home expenses for the year: heat, electricity, home insurance, cleaning supplies, property taxes, and rent (or mortgage interest if you own).

Home office example:

200 sq ft workspace in a 1,000 sq ft home = 20% business use.
Annual home expenses: $18,000.
Home office deduction: $18,000 × 20% = $3,600.

Important note: your home office deduction cannot create or increase a business loss. Any unused amount carries forward to next year.

Step 6 — Capital Cost Allowance (Area A)

If you bought equipment, computers, or other business assets during the year, they go here instead of in the regular expenses section. You can't deduct the full cost in year one — it's depreciated over time.

Computers and electronics (Class 50)

55% per year, but only 27.5% in the first year (half-year rule). Example: $2,000 laptop → claim $550 in year one (27.5%).

Other equipment (Class 8)

20% per year, 10% in year one. Example: $1,000 camera → claim $100 in year one.

Enter the CCA amount on Line 9936 in Part 4.

Step 7 — Net Income

Subtract your total expenses (including home office and CCA) from your gross profit. The result is your net business income. This number flows into your T1 personal tax return as self-employment income, where it's taxed at your combined federal and provincial marginal rate plus CPP contributions.

Common mistakes to avoid

Including GST in your revenue

If you're GST-registered, Line 8000 is pre-tax revenue only. Never include GST collected.

Forgetting the 50% meals rule

Enter 50% of what you spent on client meals, not the full amount.

Expensing equipment in full

Computers and equipment must go through CCA depreciation, not directly into expenses.

Missing the home office deduction

If you work from home full time, this is one of your largest deductions. Don't skip it.

NorthOS prepares your T2125 automatically

Every transaction you log in NorthOS is mapped to the correct T2125 line. At year end your workpapers are ready — organized exactly the way your accountant or tax software expects them.

Try NorthOS free →

This article is for informational purposes only and does not constitute tax advice. CRA forms and rules can change — always verify with the CRA T4002 guide or a qualified tax professional.

How to Fill Out Form T2125 — Step by Step