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TAX IMPACT OF THE PAYCHECK PROTECTION PROGRAM Small businesses that have their Paycheck Protection Program loans forgiven are likely to lose the deduction on their PPP expenses according to new guidance from the Internal Revenue Service. The wage and business expenses that companies use to qualify for loan forgiveness will not be deductible according to an IRS notice published last Thursday. “This treatment prevents a double tax benefit,” the agency said in the notice. “This conclusion is consistent with prior guidance of the IRS.” The new guidance clarifies a point of confusion in the $670 billion small business loan program to help businesses struggling from the shutdowns caused by the coronavirus. The law states that the forgiven loan will not be taxed as debt forgiveness, but it did not specify whether companies could write off the expenses they covered with the stimulus money. The tax code permits companies to write off business expenses, such as wages, rent and transportation expenses, but generally doesn’t allow write-offs for tax-exempt income. While the ruling adds to the list of challenges that businesses face, it is reasonable for the IRS to tell small businesses that they can’t write off expenses on income that was never taxed in the first place (no double-dip!). It is possible that the deduction for these PPP expenses could be reinstated. Since the IRS issued the notice several senators have spoken out against it stating that it is contrary to the intent of the PPP and that a fix could come in subsequent legislation. However, until such legislation is passed, be aware that you will not be able to deduct any expenses covered with funds from a forgiven PPP loan. Small businesses have reported numerous issues in trying to apply for the funds, which restarted last Monday after the initial round of funding ran out after just 13 days. Round 2 of the program, run by the Small Business Administration, provides funds to cover eight weeks of payroll costs. It is designed to encourage companies to keep their people away from the unemployment line, and fully engaged in the workforce.

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What sets Monotelo Advisors apart is our unique focus on planning ahead to reduce your tax burden every year. File Online File online File your taxes online form your home. Upload your documents, and get started. Schedule a Meeting Schedule An Appointment Need additional tax help? Schedule an appointment to get started. Get your tax return started at Monotelo Step 1: Upload you documents, or schedule an appointment. Step 2: One of our experienced tax professionals will process your return, and maximize your refund. Step 3: Once your return is complete, we will contact you to sign the consent forms. Step 4: After signing the consent forms, you should receive your tax refund in 1-3 weeks. How the process works. Get started Have tax questions, or need more information? Schedule an appointment Give us a call One of our experienced tax experts would be happy to answer your questions, and get your tax return started Social Security Changes for 2026: A Complete Guide for Retirees and Working Beneficiaries Social Security plays a crucial role in the financial security of more than 70 million Americans. For 2026, the Social Security Administration has announced several important updates affecting retirees, workers claiming early benefits, SSI recipients, and individuals with disabilities. Below is a comprehensive overview to help you stay informed and plan financially for the year ahead. 1. A 2.8% Cost‑of‑Living Adjustment (COLA) The biggest change for 2026 is the 2.8% COLA appl Key Tax Season Deadlines for Monotelo Small Business Clients in 2026 As the 2026 tax season gets underway, our goal is to ensure that all of our small business clients experience an easy and stress-free filing. The following dates highlight essential deadlines for S-Corps, partnerships, and C-Corporations—these are intended to keep you organized, help you avoid penalties, and clarify what you can expect from us. Feel free to bookmark this page or revisit it during the season; it's your key resource for the most important tax milestones. Key Important Tax Dates for Small Businesses in 2026 As a small business owner, staying on top of tax deadlines is essential to avoid penalties and keep your operations running smoothly. Below is a clear timeline of key dates for the 2026 tax season, along with an important update on 1099 reporting requirements. January January 15, 2026 – Fourth-quarter 2025 estimated tax payment due (Form 1040-ES). January 31, 2026 – Deadline to issue W-2 and 1099 forms to employees and contractors. Since January 31 falls on a Saturday Helpful tax tips and articles. View More Small Business Tax Services We will help you minimize your short-term and lifetime tax liability to free up the cashflow needed to help you grow your business and build for your future. Learn more Retirement Planning Our Values-Based planning service 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 More services from Monotelo

On August 8th President Trump signed a presidential memorandum deferring the employee share of Social Security taxes due on wages paid between September 1st and December 31st. The intent of this memorandum was to provide employees with a temporary increase in cashflow in response to the COVID-19 pandemic. However, since this memorandum only defers the taxes and does not forgive them, they will need to be repaid at some point. Since the memorandum was signed we have been waiting for the Treasury to issue guidance on how this deferral will be implemented so that we could inform our clients on what they can expect. When the Treasury finally released their guidance this past Friday they left many questions unanswered. Per the Treasury guidance employers who do not withhold the employee’s Social Security taxes during the deferral period will need to pay the deferred taxes between January 1st and April 30th or be subject to penalties and interest. The guidance states that it will be the responsibility of the employer, not the employee, to pay the deferred taxes at the end of the deferral period. However, the guidance also states that employers may then make arrangements to collect the applicable taxes from the employees. What this means is that if your employer does not withhold Social Security taxes from your paycheck during the deferral period then you will see a small increase in your net paycheck until the end of the year. But in January you will either see one lump sum deducted from your paycheck or see your paychecks decrease for the first few months of the year as your employer collects back the Social Security taxes that are due. One question that the guidance did not answer was who decides whether to participate in the deferral, the employer or the employee? Some employees may welcome a short-term increase in their net paycheck while others will not want to deal with the hassle of repaying those taxes in a few months. It remains to be seen if employees will be able to choose if they want their taxes deferred or if they will have to go along with what their employer decides. Our Recommendation to Employees As we have already said, this is NOT forgiveness of your Social Security tax obligation, it is only a deferral until January. To avoid an unwelcome tax bill in January it is our recommendation that you reach out to your employer and let them know that you do NOT want to participate in the payroll tax deferral. Your paycheck will remain unchanged through the rest of the year and you will not be faced with a large tax bill in January. If you employer chooses to implement the deferral across the board and does not allow you to opt out then we would recommend setting aside the additional money in each paycheck to pay back the deferred taxes when they become due next year. Our Recommendation to Employers We are now one day from the start of the social security deferral period and there are still many questions that the Treasury has not answered regarding how employers will report taxes that have been deferred and if employers will be responsible for taxes when they are unable to get them from employees in January. Due to all of this uncertainty our recommendation is that employers do not participiate in the deferral for the time being and continue to withhold taxes as normal. Read more articles SOCIAL SECURITY TAX DEFERRAL 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.

One step away to save on your taxes. Schedule a quick 10-minute, no-obligation consultation. ARE YOU PROTECTING YOURSELF From Your Corporate Income? While there are potential tax savings with a corporate structure in place, it is critical that the corporation be the entity that actually earned the income. WHAT DOES THAT MEAN? A fundamental principle of tax law is that income is taxed to the entity who earns it; and any attempts to divert the income away from its true earner are not recognized by the IRS. AND WHAT DOES THAT MEAN? It means the corporation (not the business owner) must be the entity that contracts for the services that it will have you (the business owner) provide. It means the corporation needs to be the entity that gets paid (not the business owner) for the services provided. It means the corporation must have control over the income it receives. Once it receives the income, it can then direct it to the business owner via payroll or a shareholder distribution. WHAT ARE THE MAIN TAKEAWAYS HERE? If you have self-employment income, you should consider the potential tax benefits of a corporation At Monotelo, we believe that clients who have self-employment income should consider the potential benefits of structuring their business as a corporation. That is because a corporation can provide asset protection and potential tax benefits that are not available to the self-employed individual who files a Schedule C with their tax return. 1. Have your clients or customers write their check directly to the business. Do not accept checks written to you personally. A check made out to you and signed over to the business puts the business owner at risk of double taxation and penalties. 2. Have the corporation pay you a salary for the services you are providing to the corporation. 3. Make sure that all contracts and agreements with clients are between the client and the corporation, not between the client and the business owner. Save as PDF

With the House and the Senate both passing their own version of tax reform, there is a high chance that next year's tax rates will be lower for most taxpayers. YEAR-END TAX PLANNING STRATEGIES With the House and the Senate both passing their own versions of tax reform, there is a reasonably high probability that the United States will see a dramatic shift in tax policy in 2018. While no one knows what will be included in the final bill, there is an equally high probability that next year's tax rates will be marginally lower for most tax payers. With that thought in mind, we break down our year-end tax planning strategies into three main categories: Acceleration of deductions into 2017 Shifting of income to 2018 Best Practices ACCELERATION OF DEDUCTIONS Accelerating your deductions in 2017 could make sense for two reasons: Tax brackets may be lower in 2018 than in 2017 (hence the deductions could become more valuable in 2017 than in 2018) Itemized deductions may get phased out in 2018 Four ways to accelerate your deductions in 2017: If you are not at risk of paying the AMT (the alternative minimum tax), consider paying your 2018 property tax bill in 2017. Consider moving up medical procedures into 2017 that have significant out-of-pocket expenses. If you are planning to make significant contributions to your church or a 501c(3) organization, consider making the gift in 2017 rather than 2018. If you are a small business owner, consider making your 2018 purchases this year. This could include new and used personal property such as equipment, computers, desks, chairs, etc. Just be sure that these items are purchased and put in service by the end of the year. 1 Don't forget to review your portfolio gains and losses for tax-harvesting opportunities. SHIFTING INCOME TO 2018 IF YOU HAVE THE ABILITY TO MOVE INCOME TO 2018, THIS COULD BE A GOOD YEAR TO DO IT! If you are self-employed, one simple way to do this is to wait to bill your customers until after January 1st. Small business owners on a cash-basis can also prepay and deduct qualifying expenses up to 12 months in advance. This could include: Lease payments on business vehicles Rent payments on a commercial property lease Insurance premiums If you are not self-employed, you can do the same thing if you have the ability to move a year-end bonus into January. 401K contributions - if you do not max out your 401K each year, consider making both 2017 and 2018 retirement contributions in 2017. While this may create a challenging cash-flow situation, it may be worth the effort as the deferral could become more valuable in 2017. Distributions from retirement plans - 2017 could be the year to take the minimum required distribution from your IRA. Consider waiting to 2018 to take additional distributions. Roth conversion: 2017 could end up being a bad year to do Roth conversions. Consider re-characterizing your Roth conversion if the underlying assets performed poorly or wait until 2018 to do the conversion. Save as PDF Read more articles Share BEST PRACTICES Make sure you are contributing to your company 401k if your employer matches your contribution If you are not self-employed, make sure you are using the right plans for additional savings, whether an IRA, a Roth IRA, a non-deductible, or some other deferral option, such as annuities, cash-value life insurance and tax-efficient investments If you are self-employed, make sure you are maximizing your retirement savings opportunities using the optimal plan design; and don't overlook the opportunities to defer up to $100,000 in a Defined Benefit/401(k) combo Be methodical about gifting, and find tax-efficient methods of helping family members. This can include: Charitable gifting: Outright gifts to charities Gifts to family: Annual exclusion usage, outright gifts, gifts to a trust for the benefit of a family member. Educational savings: Tax-efficient vehicles include 529 plans Coverdell savings accounts and education IRAs. 3 2 There is little risk to implementing these tax maneuvers, and there is additional upside to you, the tax payer if there are changes to the tax code. Failing to tax plan in 2017 could cost you significant money - so don't wait to set your plan in motion! If you have additional questions or need some planning help, please reach out to us at 800-961-0298

Whether you are just starting out, or are a seasoned veteran, you need someone who will work with you to ensure that you are set up for success. Real Estate Agents At Monotelo we start every relationship with a tax conversation. We work hard to free up cash flow by helping you minimize your federal tax liability. That's because every dollar you pay the federal government is one less dollar available for you to reinvest back into your business, or one less dollar available for you to reinvest into your future. Learn More This video provides a brief summary on how we reduce the tax liability for our real estate agents. Why Monotelo? Tax Tips and Strategies Strategies that you can implement in your business to simplify the filing process while reducing your tax burden. How We Work With Clients The biggest enemy to the accumulation of wealth is the 23-43% cut the government is going to take on your income. That is why we start every relationship with a tax conversation. Monotelo White Papers Read about some of our previous cases, the challenges we faced, and the solutions we developed to help our clients make better financial decisions.

Quarterly: Oct 17 ...Better Decisions This article is the second part of our series on decision making. Applying some of the information from Thinking, Fast and Slow, we are diving into the research from Nobel Prize winner Daniel Kahneman and how he breaks down our decision-making process into two systems. Notes from Better Thinking... : To keep things simple Kahneman breaks down our thinking process into two systems that he describes as “System 1” and “System 2.” System 1 is intuitive and emotional, fast and easy. It is reactive. “There was a shark attack last week, I am never going to the beach again.” System 2 is deliberative and logical. It is also slow and requires effort. “What are the chances of getting attacked by a shark? Is swimming in the ocean more dangerous than swimming in a community pool?” The challenge with our System 1 and System 2 thinking is when we "think" we are an expert, or we have a life experience that impacts us. This perception of “expertise” or the impact of life experience can shape our decision-making process in a profound way. That’s because life experiences build the heuristics that we use as short-cuts to make System 1 decisions. Some of these heuristics are helpful, and some are not. If I were to ask you what is more probable: Dying in a train accident or getting struck by lightning?...Most people would say train accident. That’s because System 1 kicks in, pulls up memories of train accidents in the news and assumes that there is a higher probability of dying from a train accident than getting struck by lightning. This System 1 action is referred to as the availability or familiarity heuristic. But according to the National Center for Health Statistics, we have a higher chance of dying from a lightning strike than we do from a railway accident. According to that same study, Americans are two and a half times more likely to die from a bee sting than from a dog attack. Like bee stings, average market gains over long periods of time aren’t as headline grabbing as train crashes or market crashes, so they are not as prominent in our minds. Investors are quick to succumb to System 1 thinking when we avoid “riskier” asset classes, especially when we have the impact of the great recession burned into the back of our minds. By focusing all our attention on the potential for short-term fluctuations in performance, we ignore the fact that these “riskier” asset classes can be the ones that have the greatest long-term impact on portfolio growth. The familiarity heuristic may not only cause us to avoid high-performing asset classes, it can also work against us by biasing us toward things we are familiar with. According to JP Morgan, people living on the West Coast tend to overweight the technology sector, while people living in Texas tend to overweight energy; and people in the Midwest tend to overweight industrials. While it is wise to invest in asset classes where we have an edge, it is a statistical improbability that the entire universe of Texans has an edge in energy investments. And it’s equally improbable that the entire universe of Midwesterners has an edge in industrials. While System 1 might convince us all that we are “experts,” we can’t all have an edge. Not everyone is the “smartest person in the room.” The irony of the familiarity heuristic is that it can cause us to avoid “riskier” asset classes on one side and cause us to overweight our portfolio on the other side, ultimately creating more potential hazard from a lack of diversification and concentration risk. We are all swayed by our personal biases and deceptive thinking from time to time. The key to managing our thinking is to simply recognize that we are inclined to be biased. Rather than reacting to System 1 and our biases, we need to access System 2 and ask ourselves deeper questions. System 1 thinking looks at the high performing mutual fund and says “this fund has significantly outperformed my other mutual funds in the last two years. Let’s sell my underperforming funds and buy more of this fund.” System 2 thinking looks at the high performing mutual fund and asks: “Why is this fund outperforming? Did the manager tactically recognize the hot sectors? Or was it always invested in this sector, and this sector happened to outperform the last two years? How likely is it that this sector will continue to appreciate when it is extremely expensive today? Let’s sell half of this holding and move into something that has more potential to grow.” System 1 thinking looks at a marginal company in a stagnant industry and says: “Wow this company has not grown earnings in the last three years, there is no way I would own this stock.” System 2 thinking says: “This company has not grown earnings in the last three years, but the balance sheet is stronger today and the market cap is one-third of what it was three years ago. At the extremely depressed valuation, I’m willing to bet that this company will converge back to a more-normal valuation when investors begin to recognize the safer balance sheet.” Boiling it Down: System 1 can do a pretty good job of keeping us alive in the jungle, but may not serve us as well when seeking to maximize our long-term wealth. That’s where we need to recognize that we are inclined to be biased and our short-cutting heuristics may be hurting us. Tapping into the benefits of System 2’s slow thinking can help prevent us from making costly mistakes. Read Part Three: ".The Fallacy of the Formula"

At Monotelo, we use our unique knowledge of the job-related expenses of our public-servant clients to reduce what they are paying in taxes. We Understand We understand the feelings of excitement and camaraderie firefighters get when you finish a good call. We understand the lifelong commitment you have made to staying physically fit and mentally sharp for anything that comes your way. Our monthly publication shares tips and strategies to reduce your federal and state tax liabilities. Tax Tips and Strategies Use our tax season checklist to make sure you have everything needed to file an accurate return while maximizing your potential deductions. Learn More Tax Season Checklist Get Started with Monotelo Start your free review of your past three years of tax returns Testimonials Hear what our public servants have to say about their Monotelo experience.

JULY 2016 MONOTELO QUARTERLY ARE YOU PROTECTING YOURSELF From Your Corporate Income? While there are potential tax savings with a corporate structure in place, it is critical that the corporation be the entity that actually earned the income. WHAT DOES THAT MEAN? A fundamental principle of tax law is that income is taxed to the entity who earns it; and any attempts to divert the income away from its true earner are not recognized by the IRS. AND WHAT DOES THAT MEAN? It means the corporation (not the business owner) must be the entity that contracts for the services that it will have you (the business owner) provide. It means the corporation needs to be the entity that gets paid (not the business owner) for the services provided. It means the corporation must have control over the income it receives. Once it receives the income, it can then direct it to the business owner via payroll or a shareholder distribution. WHAT ARE THE MAIN TAKEAWAYS HERE? If you have self-employment income, you should consider the potential tax benefits of a corporation At Monotelo, we believe that clients who have self-employment income should consider the potential benefits of structuring their business as a corporation. That is because a corporation can provide asset protection and potential tax benefits that are not available to the self-employed individual who files a Schedule C with their tax return. 1. Have your clients or customers write their check directly to the business. Do not accept checks written to you personally. A check made out to you and signed over to the business puts the business owner at risk of double taxation and penalties. 2. Have the corporation pay you a salary for the services you are providing to the corporation. 3. Make sure that all contracts and agreements with clients are between the client and the corporation, not between the client and the business owner. Save as PDF October 2016

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