Key Things to Consider When Filing SR&ED Claims

Filing a Scientific Research & Experimental Development (SR&ED) claim in Canada can be a game-changer for your business. With the potential to recover up to 64% of qualifying R&D expenses, it’s one of the most generous tax incentives available to Canadian innovators.

But here's the catch: the claims process is complex, technical, and highly scrutinized by the CRA. Whether you're filing for the first time or refining a previous submission, here are the key things to consider before you submit that T661.

✅ 1. Is Your Work Actually SR&ED?

Many businesses mistakenly believe their product development counts — but CRA’s definition is very specific.

Your work must:

• Seek technological advancement

• Address scientific uncertainty

• Use a systematic investigation or experimentation process

Just writing code or improving a UI doesn’t qualify. But solving a problem no known solution exists for? That’s where SR&ED begins.

🧾 2. Documentation Isn’t Optional

The CRA expects more than just your word.

You’ll need to maintain:

• Time tracking for each employee involved in eligible activities

• Technical project documentation

• Experimentation records, tests, prototypes

• Invoices for materials, subcontractors, and overhead

If you’re scrambling to recreate this at year-end, your claim may be rejected or reduced. A CPA can help you systematize your tracking in real time.

📄 3. You Must File a T661 — Accurately

The T661 is the cornerstone of your SR&ED claim. It includes:

• A technical narrative

• Financial breakdowns

• Identification of eligible activities, staff, and expenses

One small error or vague explanation can delay your refund or trigger an audit.

💡 4. Your Corporate Tax Filing Must Align

Your SR&ED claim is tied directly to your T2 corporate return. That means:

• Your net income, payroll, and R&D expenses must align

• Any government assistance must be reported

• Improper allocation can reduce your credit or create CRA pushback

A CPA who handles both your T2 and SR&ED ensures that all the pieces line up — and that you're maximizing your return.

🛡️ 5. Be Audit-Ready from Day One

CRA reviews are getting stricter. If you’re selected for an audit:

• You’ll need to produce detailed documentation fast

• Your technical and financial narratives will be scrutinized

• Lack of evidence can result in a denied claim — or worse, penalties

Working with a CPA who understands the audit landscape ensures you’re never caught off guard.

👩‍💼 6. Not All SR&ED Help Is Equal

Many consultants focus solely on the technical side or charge a hefty percentage of your refund. At Lashley CPA PC, we offer:

• Flat-fee or success-based options

• End-to-end filing, including technical write-up and T661

• Tax integration, so SR&ED fits into your bigger financial picture

• Audit support, so you’re never on your own

📞 Ready to File With Confidence?

We help founders, engineers, and financial controllers take the guesswork out of SR&ED. Whether you're building software, prototyping hardware, or advancing tech in your industry — we can help.

👉 Book a Free Consultation
Let’s make sure your innovation gets the credit it deserves.

📊 The Importance of Tax Planning: A Comprehensive Guide for Toronto Business Owners

Published by Dru-Rae Lashley | Lashley CPA PC | Toronto, Ontario

Tax planning isn't just a year-end task, it's a year-round strategy that can have a profound impact on your business's financial health. For entrepreneurs and small business owners in Toronto, where costs and compliance obligations are always evolving, smart tax planning can mean the difference between thriving and surviving.

1. 🧾 Understand Federal & Ontario Tax Laws

Toronto business owners must navigate both federal CRA requirements and Ontario-specific tax credits and deductions. Examples include:

• Ontario Small Business Deduction for incorporated businesses

• Employer Health Tax exemptions

• Digital Media Tax Credits for creative professionals

A CPA ensures your business complies while also taking advantage of these province-specific opportunities.

2. 💰 Identify Savings Opportunities You’re Missing

A tax plan isn’t just about staying out of trouble, it’s about saving money. Some overlooked opportunities include:

• Accelerated Capital Cost Allowance (CCA) on new assets

• Split income planning with family members

• Optimizing salary vs. dividends for owner-managers

For self-employed professionals and startups in Toronto’s competitive landscape, these tactics can free up significant cash flow.

3. ⏱️ Leverage Timing to Your Advantage

From deferring income to accelerating expenses, timing can impact your tax liability:

• Year-end purchases of capital equipment can reduce current tax owing

• Prepaying expenses before December 31

• Planning RRSP contributions before the February deadline

Your CPA will help time these decisions to match your goals.

4. 📈 Align Tax Planning with Growth Strategy

Whether you’re planning to:

• Expand to a second location

• Hire your first employee

• Apply for government funding

Your tax plan should support your business trajectory. Strategic planning also helps avoid pitfalls like ineligible ITCs or payroll remittance issues.

5. 🗂️ Implement Better Record-Keeping Habits

In Toronto, CRA audits are increasingly digitized and data-driven. Good recordkeeping is your first defense. Use:

• Cloud-based accounting software (e.g., QuickBooks, Xero)

• Receipt capture tools

• Organized payroll and HST filings

We can help set up and maintain this foundation so you’re always audit-ready.

6. 📞 Stay in Touch with Your CPA Year-Round

Tax planning isn't just about tax season. We recommend:

• A quarterly check-in to reassess income, payroll, and remittances

• Scenario modeling for major business changes

• Real-time advice when purchasing equipment or signing new leases

✅ Final Thoughts for Toronto Business Owners

If you’re running a business in Toronto—whether you're a sole proprietor, incorporated professional, or nonprofit leader, you can’t afford to ignore tax planning. With rising costs, complex compliance rules, and rapid digital transformation, you need a trusted advisor in your corner.

At Lashley CPA PC, we specialize in proactive tax planning for small business owners across Toronto. We help you minimize tax, maximize cash flow, and make smarter decisions year-round.

📞 Ready to Get Strategic About Taxes?

Book a free consultation to discuss your 2025 tax strategy today.
👉 Schedule here or call us at (647) 561-5912

📍 1787 St. Clair Ave W, Toronto, ON M6N 0B7
✉️ admin@lashleycpas.com

🏠 How to Claim Home Office Expenses in Ontario for the 2025 Tax Year

Working from home continues to be a common practice for many professionals in Toronto and across Ontario. If you've used a portion of your home for work purposes, you may be eligible to claim home office expenses on your 2024 tax return (filed in 2025). Here's an updated guide tailored for Ontario residents.​

✅ Eligibility Criteria

You can claim home office expenses if you meet one of the following conditions:​

• You worked from home more than 50% of the time for at least four consecutive weeks in the year due to your employment conditions.​

• You used your home workspace exclusively to earn employment income and regularly met clients, customers, or other people in the course of your employment duties.​

For self-employed individuals, the workspace must be your principal place of business or used exclusively to earn business income and meet clients.​

🧾 Eligible Expenses

Eligible expenses you can claim include:

• Utilities (electricity, heat, water)​

• Home maintenance and minor repair costs​

• Rent (for tenants)​

• Property taxes​

• Home insurance​

• Mortgage interest (self-employed individuals only)​

• Internet access fees​

Note: Salaried employees cannot claim mortgage interest or capital expenses.​

📐 Calculating Your Claim

Determine the percentage of your home's total area used for work. For example, if your home office occupies 200 square feet of a 2,000-square-foot home, you can claim 10% of eligible expenses.​

If the workspace is not used exclusively for work (e.g., a dining room), calculate the percentage of time it's used for work-related activities.​

📄 Required Documentation

• Form T777S: For employees using the temporary flat rate method (available for 2020 to 2022 tax years).​

• Form T777: For detailed method claims.​

• Form T2200 or T2200S: A declaration of conditions of employment signed by your employer.​

Self-employed individuals should use Form T2125 to report business income and expenses, including home office deductions.​

📅 Key Deadlines for 2025

• April 30, 2025: Deadline to file your 2024 personal income tax return and pay any taxes owed.​

• June 15, 2025: Deadline for self-employed individuals to file their 2024 tax return. Note: Any taxes owed are still due by April 30, 2025.​

💡 Tips for Maximizing Your Claim

• Maintain detailed records of all expenses and keep receipts.​

• Create a floor plan to accurately calculate the workspace area.​

• Consult with a tax professional to ensure you're maximizing your deductions and complying with CRA guidelines.​

At Lashley CPA, we specialize in assisting Toronto-based professionals and small business owners with their tax needs. Our team can help you navigate the complexities of home office deductions and ensure you're taking full advantage of available tax benefits.​

Ready to optimize your tax return? Book a free consultation with us today and let’s discuss how we can support your financial goals.​

​This blog post is for informational purposes only and does not constitute professional tax advice. For personalized assistance, please contact a qualified tax professional.

How a CPA Can Help You with Your Canadian SR&ED Applications

If you're running a business that’s innovating, building, or improving technologies — you may be leaving thousands of dollars on the table by not claiming SR&ED (Scientific Research & Experimental Development) tax credits.

But here’s the catch: while the government incentives are generous, the process to claim them is detailed, documentation-heavy, and audit-prone.

That’s where a CPA who understands SR&ED becomes your secret weapon.

✅ What Is SR&ED, and Why Does It Matter?

SR&ED is a federal tax incentive program that rewards Canadian businesses performing eligible R&D — whether in software, hardware, biotech, engineering, or manufacturing.

It can refund up to 64% of qualifying expenditures for small Canadian-controlled private corporations (CCPCs). That includes:

• Developer and engineering salaries

• Subcontractor fees

• Prototype and testing costs

• Overhead, materials, and more

But to access these refunds, your claim must be airtight — both financially and technically.

👩‍💼 Why You Need a CPA (Not Just a Consultant)

Most SR&ED consultants focus on the technical write-up or "just getting a claim in." But CPAs bring a strategic financial lens to the process.

A qualified CPA can help you:

• Identify eligible expenses that others might miss

• Prepare your T661 and associated forms with full audit-readiness

• Align SR&ED with your corporate tax strategy

• Track and document costs properly throughout the year

• Defend your claim if CRA comes knocking

At Lashley CPA PC, we go beyond filing — we build a roadmap for maximizing your claim and integrating it into your broader tax and funding strategy.