Payments to subcontractors goes into the Inventory section, which is where it went in previous years. There is no "services" section regardless of whether you choose professional or business.
There is a space for Salaries, wages, and benefits (including employer's contributions) in the expenses section, but this is for amounts regarding employees.
Professional and business income are both reported on Form T2125. However, because of differences in the way professional income is calculated, not all businesses are considered professions for tax purposes. Professional includes the following:
- Architect
- Chartered or Certified Accountant
- Dentist
- Engineer
- Lawyer or Notary
- Management Consultant
- Physician, surgeon, or specialist
- Psychologist
- Veterinarian
- Other accounting or bookkeeping services
- Other health practitioner
- Other scientific or technical services
- Other social service practitioner
CRA considers other self-employment income (as long as it's not from farming or fishing) to be business income rather than professional income.
If you have both business and professional income, you have to fill out a separate Form T2125 for each.
