One step away to save on your taxes. Schedule a quick 10-minute, no-obligation consultation. AVOID THE HEADACHES and Penalties Associated with 1099 Reporting When a small business hires an employee, there are a number of expenses that are incurred in addition to the hourly wage. This could include the employer-provided benefits, office space, along with the technology and other tools required to do the job. The employer will also have to make required payments and contributions on behalf of employees, including: The employer's share of the employee's Social Security and Medicare taxes, which totals 7.65% of the employee's compensation State unemployment compensation Workers' compensation insurance Depending upon the industry, the additional contributions could increase your payroll costs by 20% to 30% - or more. You can avoid these expenses by hiring an independent contractor to do the same work​. The additional contributions could increase your payroll costs by 20% to 30% - or more. However, there are certain requirements that must be followed in order to avoid the headaches and penalties associated with 1099 reporting. ​ WHAT AND WHEN DO I HAVE TO FILE? Businesses are required to report all income to the IRS for its employees and any independent contractors. For employees, a W-2 is required to be filed. Independent contractors on the other hand, get a little more complex. To make matters worse, congress recently passed the Path Act, and moved up the filing deadline for W-2's and certain 1099's. The required date to provide W-2's and 1099's to employees and independent contractors is January 31. The deadline for submitting these forms to the government is also January 31. THREE STRATEGIES TO AVOID 1099 HEADACHES The easiest way to avoid the penalties, and filing headaches caused by issuing 1099's to independent contractors is to structure your business activities to minimize the number you must issue, and prepare them in advance, if you do have to issue them. ​ STRATEGY #1: Choose contractors that operate as corporations. Your business is not required to issue 1099's for payments made to corporations, S corporations, or LLC's that elect corporate status for tax purposes (unless the corporation collects attorney fees or payments for health and medical services). ​ STRATEGY #2: Make payments to independent contractors with a credit card, or a third-party payment network like PayPal. Shift the burden of reporting this income to the credit card company or the third-party network. They are required to report the payments on Form 1099-K. ​ STRATEGY #3: Require the independent contractor to provide you with a W-9 upfront before making any payments to them. Here are the benefits: You will know if a 1099 filing is required, because their business type is disclosed on the W-9. You will know whether an LLC is classified as a corporation for federal tax purposes, and excluded from 1099 reporting. By getting the W-9 upfront, it eliminates the need to chase the contractor down for the required information if you need to file a 1099. Once the contractor is paid, your leverage for getting the information is gone. If an independent contractor refuses to provide you with a taxpayer identification number (TIN), and you pay the contractor more than $600 during the calendar year, then you are required to withhold federal income tax on payments made to that contractor. If you do not withhold, your business owes the tax, and it is on you to prove the contractor paid the tax.​ Save as PDF

Run your business, we'll handle your finances. Small business owner? Yes, we can help you with your tax, bookkeeping and payroll needs. But there is so much more to having the right financial partner. Get Started Learn More What We Offer Looking for Financial Planning Help? Our values-based retirement planning will give you the quiet confidence that everything is on track for you to achieve your life goals. Get Started Learn More File your taxes online, over the phone, or schedule an in-person meeting to get started. Get Started Learn More Missed the tax deadline? It's not too late to get your 2022 tax return filed.

HOW TO DEDUCT YOUR VACATION TRAVEL AS A BUSINESS EXPENSE Taking a vacation can be expensive, so naturally the idea of deducting your vacation expenses on your tax return is an appealing idea. However, before you get carried away planning a lavish vacation with the hopes of writing off the entire cost, make sure to familiarize yourself with the requirements to qualify your expenses as business travel. To qualify for a tax deduction the trip needs to serve a legitimate business purpose. Handing out business cards on the beach does not count. There are 5 criteria your trip must meet to be a qualified business expense: Profit motive. The trip must serve a legitimate profit motive. This means that you can reasonably expect the trip to create profit either now or at some point in the future. Stay overnight . You can only deduct meal and lodging expenses when you are away from home overnight. “Rational Businessperson” test. Your trip will only qualify as a business expense if the business motive is strong enough that a rational businessperson would make the trip if business was the only motive. Primary purpose test. You can only deduct your travel expenses when your trip is primarily for business. This is determined by calculating the number of business days vs personal days of the trip. This may sound like a deal breaker, but it is easier to meet this requirement than you think. Maintain good records. If you do not properly document the business purpose of your trip, your travel expenses, or your actual business activities on the trip you will risk losing your entire deduction. ​ Your trip expenses can be broken down into two general categories with different requirements to be deductible: Transportation Expenses Transportation costs include airfare, train tickets, or the cost of a rental car to get to your destination. These expenses are all-or-nothing, if the majority of your trip days are business days you can deduct all of your transportation costs. If the majority of your trip days are personal you cannot deduct any of these costs. Life Expenses Life expenses include your daily meals and lodging. Unlike transportation expenses you do not need to meet the majority of business days threshold to take life expenses. Instead you simply take the life expenses for each business day of the trip. What Counts as a Business Day? It may be easier than you think to qualify most of your trip as business days. Each day of the trip only needs to meet one of these criteria to qualify as a business day: ​ Work more than four hours. You have a workday when you spend more than half of normal work hours pursuing business. Since a normal workday is eight hours you only need to work for more than four. Presence-required day. If you are required to be at a destination on a specific day for a legitimate business purpose. For example, if you have a meeting with a client in another city on Tuesday, then Tuesday qualifies as a business day even if that is your only business activity for that day. Travel day. Days you spend traveling to or from your business destination count as business days as long as you are traveling in a reasonably direct route. Weekends and holidays. If a weekend or holiday falls in between two business days you can count those days as business days as long as it would not be practical to return home in between the two business days. If you live in California and have meetings in New York on Friday and Monday, it would not be practical to return to California for the weekend. Therefore, all four days count as business days. Saved-money-on-travel days. If you arrive at a destination a day early or leave a day late in order to save on your travel expenses you can count the extra day as a business expense as it served a legitimate business purpose of reducing your travel costs. ​ Summary The rules governing business travel allow for some freedom to deduct vacation time as business expenses, but do not provide a blank check to write off an entire vacation simply because you spent a few minutes discussing business. You need to find the right balance between work and relaxation, properly document your work activities, and maintain records of all your expenses. Are you overpaying on your taxes? Schedule a free review of your last 3 years of tax returns!

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SMALL BUSINESS TIPS Deduct Your Medical Expenses by Hiring Your Spouse Deducting 100% of Your Business Meals New Provisions for the Paycheck Protection Program Pandemic Provision for Tax-Free Payments to Your Employees How to Get Forgiveness of Your Paycheck Protection Loan Tax Impact of the Paycheck Protection Program Economic Relief From The Small Business Administration Deducting Your Business Travel Five Year-End Business Deductions Avoid Taxes On Your Reimbursed Employee Expenses How Will Your Real-Estate Sale Be Taxed? Putting Your Self-Employment Income Away for Retirement Deducting the Business Use of Your Vehicle How to Deduct Your Vacation Travel as a Business Expense Staying Out of the "Danger Zone" of the New Small-Business Deduction New Deduction for Pass-Through Businesses Unlocking the Missed Deductions of a Home Office Avoid the Headaches and Penalties Associated with 1099 Reporting Providing Healthcare Coverage to Your Employees What is the Best Business Structure for You? Are You Protecting Yourself From Your Corporate Income?

Contact us Phone: 800-961-0298 Fax: 847-929-9134 Email: Info@monotelo.com ​ Give us a call Schedule an appointment Find an office Schedule an Appointment Client Portal resources Need help with the portal? Click below to get help. View Resources Tax tools & tax tips Refund Tracker W-4 Withholding Calculator Documents checklist Tax Bracket Calculator File Upload Our Team Stay up to date with the latest tax information, and market analysis. Subscribe to receive our weekly market and tax analysis. Close Recent posts & news Tax Season 2023: Expect smaller refunds, capital-gains bills and higher audit rates As we head into 2023, millions of American taxpayers will need to adjust their expectations for their tax return. The stimulus checks are... Congress Passes New Secure 2.0 Act President Biden signed the SECURE 2.0 Act into law on December 29th of 2022. This $1.7 trillion omnibus spending bill has over 100... IRS Suspends New 1099-K Reporting Requirements The American Rescue Plan Act of 2021 issued a new requirement for all online payment services like Paypal, Venmo, eBay and Etsy, to issue... Tax Deadlines and What You Need to Know for the 2022 Tax Season As tax season approaches, we wanted to reach out and share a few important dates and deadlines for 2023. Please see the important dates... The 3 Most Misunderstood Tax Effects of a Roth Conversion We’ve written extensively about the benefits of the Roth IRA. The Roth IRA is one of the most powerful tools available for creating... Inflation Causes Major Shifts in Tax Code for 2023 Just a few weeks after the announcement of record-breaking Social Security increases, the IRS announced their own set of record-breaking... View More Stay up to date with the latest tax and market analysis. Subscribe to receive our weekly market and tax analysis. Site Title

WHITE PAPERS The purpose of our White Papers is to give our prospective clients the opportunity to hear the solutions we have recommended to address complex problems and to help people understand the issues to consider when making complex financial decisions. While the situations are real, the names have been changed to protect the innocent! WLW Win One, Lose One, Win One... This was a fun case for our team. There was complexity due to the types of income this family was generating and the stakes were high because they were in the 39.6% tax bracket in the prior tax year. They were also paying the alternative minimum tax. Read More JSZ Realtor Sam This case had similarities to cases that had come across our desk in the past. However, what was unusual about this case was the ratio of investment property income to commission-based income being generated from home sales. Due to this we were initially not sure if we would be able to reduce his tax burden, but in the end we were able to save him $7,000 per year. Read More CWS Coulda-Woulda-Shoulda This case highlights a situation where a client's failure to consult with us prior to making a large financial decision ended up costing them $30,000 in taxes. Read More SOO Starting Over, And Over Our SOO case deals with a young Realtor client who had to repeatedly start her business over from the beginning as her life took her across the country. Amidst this repeated reset we were able to reduce her tax bill by $8,000 and increase her cash-flow. Read More

Save as PDF Read more articles Share 1 2 AVOID SURPRISES ON YOUR 2018 TAX RETURN According to the IRS, the number of taxpayers who owe at the end of the year has increased 40% in recent years. To make matters worse, if you owe money on your tax return you will also likely be charged penalties and interest for not paying the correct amount throughout the year. The best way to avoid this is to make adjustments to your federal withholdings with your employer or to make estimated tax payments throughout the year. To get started you should determine if you are likely to have a balance due when you file your 2018 tax return next year. ​ WHY DO I OWE? When you are paid by your employer they are required to withhold federal taxes to cover your expected liability. However, these withholdings are not always sufficient to cover your final tax bill due to various factors that can affect your tax liability. Several of these factors include: More than one source of income . If you work more than one job, or if you have a spouse that also works, you have an increased chance of owing on your tax return. This is because each employer only accounts for the wages they are paying you when determining how much taxes to withhold. When you have more than one source of income you could be in a higher tax bracket than your employer expects. Significant increase in income. When you start making more money you run the risk of being phased out of various tax deductions that you may have qualified for in the past. And if you receive a large pay raise in the middle of the year, your withholdings in the first half of the year may no longer be sufficient for that portion of your income when you move into a higher tax bracket. No longer claiming your child. Claiming your child on your tax return can reduce your tax bill by $2,000-3,500 per year. So when you child moves out on their own, or when you cannot claim your child due to divorce, it can take a heavy toll on your tax bill. Major life changes. Getting married, getting divorced, or retiring. These are all major life changes that can have a dramatic impact on your tax return. When you go through one of these changes you should be prepared for significant changes to your tax bill. ​ WHAT TO DO? If any of the above situations apply then you are at increased risk of having to pay when you file your 2018 tax return. To avoid this you can change your withholdings with your employer. If you have more than one job we recommend claiming zero allowances with your second employer. You can also request that an additional specified amount be taken out of each check and put toward your federal tax liability. ​ You can also estimate your final tax bill and make quarterly estimated payments to reduce or eliminate your bill at the end of the year. If you still owe, making quarterly payments can help you avoid paying additional penalties when you file your return. If you would like help determining if you should adjust your withholdings or make estimated payments please give us a call. 1 2 3 4 Save as PDF Read more articles Share Failing to order your affairs to minimize your tax burden could cost you significant money - so don't wait to take action. If you have additional questions or need some planning help, please reach out to us.

If you fail to plan ahead, you will struggle to claim your medical expenses as an itemized deduction when April 15th arrives. You will lose the ability to deduct the bulk of these expenses because they need to surpass 10% of your Adjusted Gross Income (AGI) to be usable as an itemized deduction . This means that taxpayers who make $100,000 during the year will not be able to deduct the first $10,000 in medical expenses. That handicap essentially means you will not be able to deduct any medical expenses, unless you incur heavy medical bills in a single year. And if you are paying AMT (the Alternative Minimum Tax) - don't even think about it. When it comes time to pay your income tax bill, most Americans want to pay the lowest amount possible. One of the ways taxpayers seek to do this is by increasing the number of deductions they take on their tax return each year. ​ So it's not surprising that one of the common questions we receive from our clients is whether or not they can deduct their medical expenses. While the simple answer is "yes," the reality for most taxpayers is "no." However, with a little planning, that answer can be "yes." If you fail to plan ahead, you will struggle to claim your medical expenses as an itemized deduction when April 15th arrives. You will lose the ability to deduct the bulk of these expenses because they need to surpass 10% of your Adjusted Gross Income (AGI) to be usable as an itemized deduction . This means that taxpayers who make $100,000 during the year will not be able to deduct the first $10,000 in medical expenses. That handicap essentially means you will not be able to deduct any medical expenses, unless you incur heavy medical bills in a single year. And if you are paying AMT (the Alternative Minimum Tax) - don't even think about it. The best way to counteract this nasty little piece of the tax code is to set up an HSA (Health Savings Account) and contribute to it each year. When you contribute to an HSA you get the privilege of deducting the amount of your contributions from your income and you bypass the 10% threshold. You can do this even if you don't choose to itemize your deductions! ​ And as an added bonus (do we sound like an infomercial?) - the money you put into your HSA, as well as the earnings of the account, can be taken out tax free as long as they are used for qualified medical expenses. While you cannot pay your health insurance premiums with funds from an HSA, you can pay most other medical expenses. Additionally, once you turn 65 you can use the HSA to pay your Medicare or other healthcare premiums. Requirements for an HSA In order to qualify for an HSA you must have a high-deductible health plan - defined as a healthcare plan with: 1 An annual deductible of at least $1,350 for individual coverage or at least $2,700 for family coverage. 2 Maximum annual out-of-pocket expenses of $6,750 for individual coverage and $13,500 for family coverage. Once you have your HSA set up you can contribute up to $3,500 per year for individual coverage and $7,000 for family coverage. If you are over the age of 55 you can contribute an additional $1,000 annually. Save as PDF Read More Articles Share Failing to order your affairs to minimize your tax burden could cost you significant money - so don't wait to take action. If you have additional questions or need some planning help, please reach out to us. Avoiding the 10% Threshold for Medical Expenses How do you setup an HSA? If your employer offers a high-deductible health plan, they should also give you the ability to contribute to an HSA. You can also open an account on your own through a qualified HSA provider, such as a bank or insurance company (go to www.hsasearch.com for a list of qualified HSA providers). What happens if you don't plan ahead? So what is the solution? Key Takeaways If you don't plan ahead and contribute to a Health Savings Account then you will find that most, if not all, of your medical expenses will be ineligible for a deduction due to the 10% threshold that must be met before deducting medical expenses. By setting up and contributing to a Health Savings Account you can deduct your full contribution to the account and have the flexibility to pay your medical bills with tax-free withdrawals from the account.

Focus on growing your business, we'll handle the rest. Any competent firm can help you file an accurate tax return, prepare your payroll or manage your monthly bookkeeping needs. And yes, we do that for our clients. But there is so much more to having the right financial partner. At Monotelo, we bring together our deep understanding of the Internal Revenue Code and how that intersects with you as business owner to arrange your affairs to mitigate short-term and lifetime tax liabilities to help you reach your long-term goals. Get started Learn More What we offer Entity Structuring C-Corp? S-Corp? LLC? Or Sole Proprietorship? Monotelo will meet with you to get an understanding of your unique financial situation, your short and long-term business goals, and the implications of your business income on your personal tax return. Then we will guide you to the right solution and walk with you step-by-step to secure the optimal corporate structure for your business. Learn more Get started All In One Business Owner Package You are more than just a business owner. Y our business is just one component of your personal financial picture. And that's why a comprehensive understanding of your personal balance sheet and your other income sources is so essential to helping your achieve your long-term goals, so there's no disconnect between you, your business, and where you want to go in life. Learn more Get started Small Business Service Bundles Monotelo will meet with you to understand your unique needs as a business owner, and suggest a level of service that best fits your growing business and your long-term goals. From there we will guide you through the process to get started, and take away the distractions that keep you from growing your business and building your best life possible. Learn more Get started How Monotelo can help your business. Heading 1 Minimize your tax liability Easy year-end tax filing Monotelo makes year-end tax filing easy. By asking the right questions and ensuring your taxes are filed on time, Monotelo will give you the confidence that things are getting done right. Grow your net bottom line Monotelo will help you structure your business so that you minimize your taxable income, and reduce your lifetime tax liability by eliminating the tax inefficiencies. Minimize your tax liability Monotelo will bring our expertise to the table to help you maximize your tax credits and tax deductions to minimize your taxable income and maximize what you keep in your pocket. Year-round support If you wait to see your accountant until tax time, there is no way they can strategically help you. Our team is a vailable year-round to come along-side you, to help you plan strategically and to answer any questions that you have . Get started Section 3 Schedule a free consultation. Monotelo Advisors will meet with you to get to know your business needs and understand your unique situation. Select your service. Monotelo will prepare a proposal and help you determine the service package that is best for your business. Sign the engagement letter. Yes. It's that simple. Get back to business. We will handle the finances, so you can focus on growing your business. How the process works Get started Section 4 Helpful small business articles. New Provisions for the Paycheck Protection Program Deduct your Medical Expenses by Hiring Your Spouse Deducting 100% of Your Business Meals View More Retirement Planning. ​ Our Values-Based planning will build the road map so you can have confidence that all the pieces of the puzzle are working together for you to live your best life possible. Learn more Year-End T ax Filing Services. ​ We will help you minimize your taxable income by capturing all the deductions and credits available to maximize your refund. Learn more More services from Monotelo

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If you fail to plan ahead, you will struggle to claim your medical expenses as an itemized deduction when April 15th arrives. You will lose the ability to deduct the bulk of these expenses because they need to surpass 10% of your Adjusted Gross Income (AGI) to be usable as an itemized deduction . This means that taxpayers who make $100,000 during the year will not be able to deduct the first $10,000 in medical expenses. That handicap essentially means you will not be able to deduct any medical expenses, unless you incur heavy medical bills in a single year. And if you are paying AMT (the Alternative Minimum Tax) - don't even think about it. When it comes time to pay your income tax bill, most Americans want to pay the lowest amount possible. One of the ways taxpayers seek to do this is by increasing the number of deductions they take on their tax return each year. ​ So it's not surprising that one of the common questions we receive from our clients is whether or not they can deduct their medical expenses. While the simple answer is "yes," the reality for most taxpayers is "no." However, with a little planning, that answer can be "yes." If you fail to plan ahead, you will struggle to claim your medical expenses as an itemized deduction when April 15th arrives. You will lose the ability to deduct the bulk of these expenses because they need to surpass 10% of your Adjusted Gross Income (AGI) to be usable as an itemized deduction . This means that taxpayers who make $100,000 during the year will not be able to deduct the first $10,000 in medical expenses. That handicap essentially means you will not be able to deduct any medical expenses, unless you incur heavy medical bills in a single year. And if you are paying AMT (the Alternative Minimum Tax) - don't even think about it. The best way to counteract this nasty little piece of the tax code is to set up an HSA (Health Savings Account) and contribute to it each year. When you contribute to an HSA you get the privilege of deducting the amount of your contributions from your income and you bypass the 10% threshold. You can do this even if you don't choose to itemize your deductions! ​ And as an added bonus (do we sound like an infomercial?) - the money you put into your HSA, as well as the earnings of the account, can be taken out tax free as long as they are used for qualified medical expenses. While you cannot pay your health insurance premiums with funds from an HSA, you can pay most other medical expenses. Additionally, once you turn 65 you can use the HSA to pay your Medicare or other healthcare premiums. Requirements for an HSA In order to qualify for an HSA you must have a high-deductible health plan - defined as a healthcare plan with: 1 An annual deductible of at least $1,350 for individual coverage or at least $2,700 for family coverage. 2 Maximum annual out-of-pocket expenses of $6,750 for individual coverage and $13,500 for family coverage. Once you have your HSA set up you can contribute up to $3,500 per year for individual coverage and $7,000 for family coverage. If you are over the age of 55 you can contribute an additional $1,000 annually. Save as PDF Read More Articles Share Failing to order your affairs to minimize your tax burden could cost you significant money - so don't wait to take action. If you have additional questions or need some planning help, please reach out to us. Avoiding the 10% Threshold for Medical Expenses How do you setup an HSA? If your employer offers a high-deductible health plan, they should also give you the ability to contribute to an HSA. You can also open an account on your own through a qualified HSA provider, such as a bank or insurance company (go to www.hsasearch.com for a list of qualified HSA providers). What happens if you don't plan ahead? So what is the solution? Key Takeaways If you don't plan ahead and contribute to a Health Savings Account then you will find that most, if not all, of your medical expenses will be ineligible for a deduction due to the 10% threshold that must be met before deducting medical expenses. By setting up and contributing to a Health Savings Account you can deduct your full contribution to the account and have the flexibility to pay your medical bills with tax-free withdrawals from the account.