Tax Planning & Compliance in Edina, Minneapolis
You Have Experts on Your Team.
Income and payroll taxes are one of your largest annual expenditures. By reducing current and future taxes you will likely have the ability to do more of the things you love. Throughout the year, many people face decisions that affect wallets. We want to be a lifelong strategic partner to help build and protect your wealth. At Rapacki + Co our goal is to do more than filing your tax returns.
We take it as an honor that many clients trust us with their future. We listen, and we care.
Your annual tax return is a snapshot of all the major financial elements of your life. Many times it shows how you are growing your personal wealth in a business or career. And if you are maximizing it with proper investments, or preserving and protecting it. Frequently we are the client’s only advisor that gets the 1,000-foot view of the overall financial situation. We are unique in understanding how a decision in one area can affect all the others.
We help integrate and coordinate all forms of planning if you choose to work with us. If your life changes, we can assist to modify your financial plans. Should you need, we work with a select group of outside team members.
Focus on the Value, Not the Furniture
As a smaller firm with significantly less overhead, we offer a depth and responsiveness that more prominent CPA firms cannot touch.
It is nice to go to a fancy office with plush furniture. Helps you feel like you have made it. After all, if your accountant can afford these luxurious digs, it must mean they are good at what they do, right? On the other hand, maybe they are just overcharging you. Ask yourself – are you paying for expert advice or extravagant furnishings.
Going to a strip mall for your filing may not be the right solution either. Oh, sure, you may feel like you’re saving money, but ask yourself how can they run a business with such small fees. The furniture may not just be cheap; the so-called professional accountant experience probably consists of a two-week course in tax filing. What about those remote “CPA services” offered by big online outfits? Do they get to know you over time? Will they be available during the year? Can they help with tax planning in the fall? Is that who you want to trust with your hard-earned finances? For some people, that’s all they need but is that for you?
At Rapacki + Co. we have nice chairs for you to sit in.
We think they are quite comfortable. However, we put a lot more thought and effort into your financial situation than planning the decor. Our local year-round team has the experience you can trust to get the job done right.
Both Joe and Jayden have graduate degrees in taxation and are active licensed Certified Public Accountants. But of course, wisdom does not come from academics, but from real-life experience. They attend continuing education throughout the year to keep abreast of changes in the world of tax and finances. They add the latest information to their store of knowledge built of many years in business.
Your job is to reach high and dream big.
Our job? Minimize tax liabilities and make your money grow. Our promise? Peace of mind. You will know you are on the right track with our expertise.
You work hard to make your money. We will work hard to keep it safe.
So let’s have a conversation. We love to get to know our clients to help families build their dreams, one decision at a time.
Click this link and put “Taxes” into the subject line to get started.
Financial Statements
We’re able to provide clients financial statement services. We can assist with any required bookkeeping needed to prepare financial statements.
As CPA’s, we are required to follow procedures and meet many rigorous policies and standards. One of the most important standards is SSARS, which stands for “Statements on Standards for Accounting and Review Services”. The newest version is SSARS 19.)
Q: Audits, Reviews, and Compilations
Audits, Reviews, and Compilations
In accounting, there are three tiers of financial evaluations: audits, reviews, and compilations. Our firm only issues compilation and review reports (no audits).
Q: What exactly is an audit?
An audit is the highest level of assurance. It provides a reasonable level of assurance that the financial statements conform to Generally Accepted Accounting Principles and are free from material misstatement. While rigorous, audits are not absolute guarantees against inadvertent error or deliberate misstatement.
Q: What steps are taken to make an audit the highest level of report?
The CPA is required to have an extensive knowledge of the organization’s industry.
• Auditors perform search and verification procedures, which may include obtaining written confirmation of accounts receivable, and examining contracts and other supporting documentation. They also include physical reviews, such as observing year-end inventory counts.
• Auditors also review internal control systems to identify potential risks to the company that are included in the final audit report.
Q.What is a review?
A: Reviewed financial statements provide limited assurance that the statements are free from material misstatement and conform to Generally Accepted Accounting Principles.
Q: How is a review different from an audit?
The CPA is not required to have extensive knowledge of the organization’s industry but must have a specific understanding of the type of business being reviewed.
|• If information provided appears questionable, the CPA will take additional steps in performing a review. However, a review does not require the CPA to analyze the internal controls of the business or provide risk assessment.
Q. What is a compilation?
When a CPA prepares a compiled financial statement from data provided by the client, it is called a compilation. This means that the CPA does not express any form of assurance regarding the financial statements. The CPA also does not provide an analysis of internal controls or risk assessment. This example of recommended language to be used in a compilation demonstrates the limited scope: “I (We) have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them.”
Q: What is required for a compilation?
If the CPA becomes aware that information supplied is inaccurate or misleading, she/he must request additional information. If the financial statements contain departures from Generally Accepted Accounting Principles, this must be disclosed by the CPA.
• The CPA is required to issue a report whenever completing a compilation of financial statements for nonpublic entities
The type of review required is determined by both cost and need. The SEC requires all public companies to be audited annually. Larger private firms may also benefit from an audit’s thorough report.
Q: The Requirements of SSARS 19
SSARS 19 requires that we obtain an engagement letter before we prepare and issue financial statements. This includes compilation and review reports, as well as financial statements issued for management use only. We may not be considered “independent” if we perform certain services in preparing your accounting records (see below). We are required to disclose any “lack of independence” in the compilation report. A review report may not be issued if we are not independent. If we change the type of engagement we are performing, we are required to get a new engagement letter.
Q: What is an engagement letter?
SSARS 19 requires us to “document our understanding with the client in writing”. The engagement letter is used for that purpose.
Why is the engagement letter so long?
We are also required to have a peer review every three years. As part of the peer review, we are required to document the system of Quality Control within the firm. The engagement letter is written in such a way as to ensure compliance with our system of Quality Control, AICPA Independence rules, and SSARS 19 requirements.
Q: What Is Meant by “Independence”?
What Is Meant by “Independence”?
Independence is a complex subject. In order to be considered independent, CPA’s are not allowed to be part of client management or ownership, or perform functions that would ordinarily be performed by management. Here are some examples of when independence would or would not be impaired in the performance of bookkeeping services
Independence - Would not be impared
| Independence Would Not Be Impaired | Independence Would Be Impaired |
| Record transactions for which management has determined or approved the appropriate account classification, or post coded transactions to a client’s general ledger. | Determine or change journal entries, account codings or classification for transactions, or other accounting records without obtaining client approval. |
Q: Independence - Would be impaired
| Independence Would Not Be Impaired | Independence Would Be Impaired |
| Record transactions for which management has determined or approved the appropriate account classification, or post coded transactions to a client’s general ledger. | Determine or change journal entries, account codings or classification for transactions, or other accounting records without obtaining client approval. |
Retirement Planning
Retirement Planning That Changes When Your Life Does
Retirement Plan Selection
There are different types of retirement accounts and each has its benefits and pitfalls. Making the right decisions could have a significant impact on your tax liability and total saving when you retire. That’s why having a plan is important.
There are two basic types of retirement plans. One is a defined contribution plan. With this type of plan, you are guaranteed to be paid out all the money you contributed to the account. The value of the account when you retire is based on the amount of money you contributed, the account’s rate of returns, how long the money was invested, and your tax liability.
The other type of account is a defined benefits plan. With this type of plan, you receive recurring payments throughout your retirement. Most pensions end upon death but some have survivor benefits that will continue to be paid out to predetermined beneficiaries. The amount you receive is based on a formula when you retire.
The most common are defined contribution plans, each with its own set of rules and limitations. The two main types are IRA accounts and 401(k), each type has different variations.
Traditional IRA.
An IRA account offers tax deductions when you contribute the money. The money in your account isn’t taxed when you contribute the money but deferred until it is distributed.
Roth IRA.
Similar to a traditional IRA but with a Roth IRA you pay taxes when you contribute the money and don’t pay taxes when your money is distributed.
SEP IRA.
A simplified employee pension plan (SEP) IRA is a retirement saving account established by an employer or a self-employed person. Unlike other IRA accounts, employers are allowed to contribute to them for a tax deduction. Like a traditional IRA, contributions to this account are tax-free and taxed upon distribution. SEP IRAs are intended to help small businesses provide employer-sponsored retirement plans for their employees and owners.
Simple IRA and Simple 401(k)
These two types of retirement plans are employer-sponsored and only eligible for employers with 100 or fewer employees. Like a SEP IRA, employees can contribute to these accounts for tax deductions.
401(k)
A 401(k) is a retirement plan offered by employers. You can invest a portion of your salary until you reach your maximum contributions for that year. Employers will often match a portion of your contributions. Money added to the account is not taxed until it is distributed to the account owner. Also, you usually can withdraw money from this account until you are 59.5 years old without paying a tax penalty.
Solo 401(k)
A solo 401(k) plan is a good option for small business owners. A solo or owner-only 401(k) is very singular to a normal 401(k), except that you can usually contribute more to a solo 401(k) plan. These plans can be a great way to build excellent retirement savings but there are some limiting factors. If you have employees who are over the age of 21 and work 1,000 hours in any 12-month period, then you will likely need a company 401(k) plan. There are different types of company-sponsored 401(k) plans. Although there are limitations for the owners with these types of accounts, having a plan with Roth options and safe harbor provisions often is the best option.
Despite all the options, we can help you respond to life’s uncertainties by making wise decisions for your family and your future.
For small business owners, choosing the right type of retirement plan is even more important. Retirement planning is more complicated because you have so many options to choose from. along with all these options come potential setbacks. Depending on how you file your taxes and your income, there are different contribution limits for different accounts.
Life can hit you with surprises; priorities can change. Yesterday’s sound plan may need to be changed today. For us, retirement and wealth planning are processes with adjustments made along the way to meet your changing needs.
Income tax is a material factor in investments, retirement planning, insurance, and estate plans. Only an experienced CPA has the skills necessary to coordinate all these aspects. Rapacki + Co has your back. Our exceptional team has the skills and expertise to create, protect, and grow your wealth.
We can work with advisors already on your team. We can also call on top professionals with whom we’ve built strategic partnerships to serve your needs
Our founder, Joe Rapacki Jr., holds an elite designation from the American Institute of Certified Public Accountants. The title of Personal Financial Specialist (PFS) only goes to those with proven expertise and experience in comprehensive personal financial planning.
Doesn’t your hard-earned money deserve a watchdog who’s the best?
Put Rapacki + Co. on your team to make your money go further faster to meet your family’s needs. Click this link and put “Retirement Planning” in the subject line.
Small Business Solutions
Today is the best preparation for what tomorrow may bring.
Business Services
Whether you are starting a business or have an established business, we have the knowledge and resources to help you create or improve a successful enterprise.
We’ll help you make decisions important for a sound business strategy. Your strategy might include:
● Entity selection and support in starting a new business.
● QuickBooks setup and training.
● Accounting for businesses. That includes bookkeeping, assistance with your payroll as well as payroll taxes, and support in the preparation of financial statements.
● Comprehensive tax services. We’ll make sure you take advantage of all of the deductions to minimize your taxes.
● Retirement plan selection.
Every penny counts when you’re building a business on your own or even if you have a team of employees. You need to know what your expenses are, including what’s going out, what’s coming in, and what you should prepare for in the future. That’s a lot of work for a business owner to take on by themselves, and in most cases, an in-house accountant isn’t fiscally feasible.
Ensure you get the accounting assistance you need by working with our firm. We can handle the numbers, so you can get back to focusing on providing your customers with the best products and services you have to offer.
