The road to retirement has many curves and directional changes. You are likely to switch jobs over time and you may need to move your retirement funds to a different advisor or a different custodian. Should the need for change come, you will want to be sure that everything is done correctly. Rolling Five Things According to the Bureau of Labor Statistics, the average worker currently holds ten different jobs before age forty, and this number is projected to grow. The BLS also reported that the median employee tenure is between 4.0 and 4.3 years with men lasting a little longer than women. Each job change brings the potential need to roll over retirement funds, which can be tricky with serious consequences if not done correctly. With job changes as frequent as they are today, it's important to understand how to roll over retirement funds correctly. Here are 5 things every IRA owner needs to know before they decide to roll over an IRA. Knowing this might get confusing, let us start with the end in mind: Rollover rules are complicated with a number of potential pitfalls. The best strategy is to use transfers and direct rollovers. The simplest way to think about this is "don't touch the money." 1. How rollovers work An “indirect rollover” takes place when a distribution is made to you from your company retirement plan or an IRA and you take receipt of those funds with the intention of putting them back into a different or newly established IRA. A "direct rollover" takes place when a company plan transfers your assets to another company plan or an IRA. While this transaction is called a "rollover," it is very different from an indirect rollover because you never take receipt of the funds. This type of rollover avoids the mandatory 20% withholding that applies to rollover-eligible distributions because this is not a taxable event to the IRA owner. 2. The 60-day rule There is a 60-day window to complete an indirect rollover, and the 60-day clock starts ticking when the distribution is received. You can use those funds for any purpose during that window, but the distribution becomes taxable and subject to penalties if the deadline is missed. While there are some very limited exceptions, if the deadline is missed, the rollover window is closed. To avoid this outcome, complete rollovers as soon as possible. 3. The once-per year rollover rule IRA-to-IRA or Roth-to-Roth rollovers are subject to a once-per-year rule. For purposes of this rule, traditional and Roth IRAs are combined. This means that a distribution and subsequent rollover between your Roth IRAs will prevent another rollover within a one-year period between either your traditional IRAs or other Roth IRAs. This rule limits you to only one rollover of IRA funds every 12 months. Rollovers from a company plan to an IRA or from an IRA to a company plan are not subject to the once-per year rollover rule because they are transfers. Roth conversions are not subject to the rule either. 4. No Rollover of RMDs Once you turn 70 ½ you must take out a required minimum distribution (RMD) from your IRA each year. RMDs cannot be rolled over and must be reported as income. You can take out distributions in excess of the RMD and roll them over but not until you have distributed the RMD. This rule does not apply to transfers between IRAs. You can transfer your entire account to a new IRA and then take the RMD later. 5. Other Rollover Pitfalls There are other rollover pitfalls to be aware of. Non-spouse beneficiaries attempting to rollover retirement funds is not allowed. If a non-spouse beneficiary receives a distribution from an IRA or a company plan, they may not roll over those funds, they are taxable at the time of distribution. That Every IRA Owner Should Know Summary Rollover rules are complicated. The simplest solution is to use transfers and direct rollovers, and not touch the money. If you never personally receive a distribution, and all moves are made between the old and newly established IRA, you have very little to worry about. That's because transfers avoid the 60-day rule and the once-per-year rollover rule, so there is no concern about missed deadlines or frequency of transfers. 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.

WHAT PARENTS NEED TO KNOW About Back-To-School Expenses August can be an expensive month for families with children heading back to school... and some of these expenses may serve you on your tax return. So we are going to spend five minutes summarizing a few of the expenses worth paying attention to. Tax Deductions for School Fundraisers If you make donations to your child's public school, you may be able to deduct the donation amount from your taxable income as a charitable donation. If you receive something in return for your donation, then the reasonable value of the property you receive must be subtracted before you take the deduction. For example: you donate $250 to your child's sports team, and you receive a sweatshirt that sells for $25. In this situation, you would subtract the $25 value of the sweatshirt and use the remaining $225 as a charitable deduction. After-school activities and Child Care Credit For a child under the age of 13, the cost of before or after school care may qualify for a tax credit. Your child must be attending the program so that you can work, look for work, or go to school. The program must also be considered "child care," so hour-long tutoring sessions don't qualify. American Opportunity Tax Credit The American Opportunity Tax Credit can amount to $2,500 in tax credits per eligible student and is available for the first four years of post-secondary education. Eligible expenses include tuition, books and required supplies. Room and board, medical expenses and insurance do not qualify for the AOTC. Income limits apply and the credit requires a 1098-T. The American Opportunity Tax Credit for education expenses can reduce your tax bill by up to $2,500 Lifetime Learning Credit The Lifetime Learning Credit can create up to $2,000 in tax credits for qualified education expenses. The credit is for 20% of the qualified education expenses (up to $10,000 in tuition and fees). There is no limit on the number of years this credit can be claimed and you may be able to deduct qualified education expenses paid for yourself, your spouse, or your dependents. The deduction phases out after certain income ranges. Tuition and Fees Deduction The tuition and fees deductions can reduce the amount of your taxable income by $4,000. This deduction is claimed as an adjustment to income, so you can claim this deduction even if you don't itemize deductions on your Schedule A. This deduction may help you if you don't qualify for the American Opportunity or Lifetime Learning credits. The qualified expenses are for undergraduate, graduate or post graduate courses. There is no limit to the number of years the credit can be claimed and you may be able to deduct qualified education expenses paid for yourself, your spouse, or your dependent(s), but the deduction phases out after a certain income range. You must file jointly with your spouse to claim this credit. At Monotelo, we exist to make a difference with meaningful and actionable financial solutions that positively impact our client's lives. If you have questions about what steps you can be taking to prepare for your retirement years, call us at 800-961-0298

Tax and Financial Planning | Monotelo Advisors | 800-961-0298 2205 Point Boulevard, Suite 175, Elgin, IL 60123 Find the location that works best for you. Elgin Office 2250 Point Boulevard Suite 210 Elgin, IL 60123 Phone: 847-923-9015 Fax: 847-929-9134 Mon-Fri: 9:00 AM - 5:00 PM Get Directions Call Office Site Title Carlinville Office 260 Alton Rd Carlinville, IL 62626 Phone: 217-854-9530 Fax: 217-854-5206 Wed/Thurs: 8 AM - 3 PM Get Directions Call Office Gillespie Office 112 S Macoupin St Gillespie, IL 62033 Phone: 217-839-4226 Fax: 217-839-4039 Mon-Fri: 8:00 AM - 3:00 PM Get Directions Call Office West Brooklyn Office 2508 Johnson Street West Brooklyn, IL 61378 Phone: 815-628-3500 Fax: 815-628-3600 Mon-Fri: 8:30 AM - 5:00 PM Get Directions Call Office Get Directions Call Office

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. Learn More Getting started with Monotelo Advisors As a firefighter, we know that there are unique deductions available to you that most accountants and tax software fail to capture. That is why we start all of our firefighter clients with a no-cost, no-obligation review of their last three tax returns. We have found that we can typically recover $800-$1,500 per year. To get started with your tax review you can upload your 2015, 2016, and 2017 tax returns using the link below. Upload Your 2015-2017 Tax Returns

Quarterly: Oct 17 Our Planning Process Our Objective A financial plan with the optimal tax efficient strategies that help you meet your short and long-term goals. Our Process Discovery: The first and most important step in the process is to understand our client's long-term goals and their short-term cashflow needs. It is also designed to identify how the short-term cashflow needs can impact the long-term goals. Assessment: The main objective of the assessment phase is to identify what needs to be done to achieve each goal and provide context around our client's time horizon and risk tolerance. Expectations may need to be reset based on long-term goals, the resources and assets available to reach those goals and your capacity to take risk over time. Evaluation: This is the phase where we present our findings, show you the steps needed to move you toward your long-term goals, and get agreement on which option best suits your needs. Implementation: Once the financial plan has been established and agreed upon, the implementation phase turns the plan into reality, with each component of the plan designed to align with your short and long-term goals. Monitoring: The monitoring phase is designed to check on the progress toward your long-term goals and make any minor adjustments needed to move you toward your desired outcome. If circumstances change or life-changing events take place, we will move back into Discovery phase, reassess the new circumstances and adjust the plan as needed. Our "Why" Monotelo is a combination of two Greek words: Mono (meaning one) and Telos (meaning purpose). Monotelo's "One Purpose" is to make a difference with meaningful and actionable financial solutions that positively impact our client's lives.

Mahlon Mitchell shares his experience working with Monotelo Advisors

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About Us Who We Are Meet The Team Jim Richter, CFP®, CAIA®, EA President 800-961-0298 jim@monotelo.com Jim Richter is the President of Monotelo Advisors. Jim sets the strategic direction for the firm, including oversight of all tax and financial planning services at Monotelo Advisors. He brings 20+ years of experience in the financial services industry, including 10 years of hedge-fund specific work across diverse investment products. Prior to founding Monotelo Advisors, Jim spent 7 years as a Managing Director and Partner at a Chicago-based asset management firm. Prior to his time in the asset management industry, Jim spent 9 years as a fixed-income specialist in the banking industry. Jim is a CERTIFIED FINANCIAL PLANNER™ and Chartered Alternative Investment Analyst with a degree in Finance from the University of Illinois - Chicago. Jim is an Enrolled Agent, a federally authorized tax practitioner empowered by the US Department of the Treasury to represent taxpayers before the Internal Revenue Service. Gina Gucciardo, CPA Certified Public Accountant 217-839-4226 gina@monotelo.com Gina is a Certified Public Accountant with over 35 years in public accounting. Gina and her team provide tax and accounting services to small businesses throughout Macoupin County and the surrounding area. She spends a good portion of her time volunteering and serving on non-profit boards. She enjoys exercise and runs nearly five miles a day five days a week. She likes to travel and spend time with her family, friends, and pets. Gina has the distinct honor of being the very first graduate of of Blackburn College's Accounting program. Gina and her husband have two adult children, one grandchild and two dogs! Steve Watts, CPA Certified Public Accountant 630-377-1040 steve@monotelo.com Steve is a Certified Public Accountant with an MBA and the CIRA certification. He has extensive banking and accounting experience with direct knowledge of the challenges faced by small business owners. He has developed and implemented various automated programs for management and financial reporting. During his 13 years on the banking side, Steve has prepared financial statements as well as examined and analyzed the financial statements and cash flow for thousands of companies. He is a member of the American Institute of Certified Public Accountants, Illinois CPA® Society, National Association of Tax Professionals, Association of Insolvency and Restructuring Advisors and Turnaround Management Association. Steve and his wife have two adult children. Gavin Tabb, CPA Certified Public Accountant 847-923-9015 gavin@monotelo.com Gavin is a Certified Public Accountant and small business specialist for Monotelo Advisors. He is responsible for overseeing the staff that delivers a premium level of service to more than one thousand clients throughout the year. Gavin has a Bachelor’s degree in accounting from Northern Illinois University. He is an Intuit QuickBooks Certified User and he supports our small business clients throughout the United States with seamless payroll, bookkeeping and monthly accounting services. Gavin and his wife, Elise have a five-year old daughter and one-year old son. Michael Baumeister, CFP®, EA Addy Genetti Financial Planner 847-923-9015 michael@monotelo.com Accountant 217-839-4226 addy@monotelo.com Michael is a CERTIFIED FINANCIAL PLANNER™ for Monotelo Advisors. Michael provides solutions to client’s complex financial planning in a thorough, cost-effective manner. He is the point of contact for all financial planning clients to ensure a constant channel of communication and oversight. His personal experience brings an expertise in the fields of asset allocation, estate planning, insurance review, tax planning and comprehensive financial planning. Michael has a Bachelor’s degree in accounting from Judson University. Michael is an Enrolled Agent, a federally authorized tax practitioner empowered by the US Department of the Treasury to represent taxpayers before the Internal Revenue Service. Michael lives with his wife, Sarah, and their two-year-old son. Addy is an accountant for Monotelo Advisors. Addy graduated from Southern Illinois University in Edwardsville with a Bachelor’s degree in Accounting. She has 18 years of public accounting experience including preparation of individual, partnership, corporate and estate/trust tax returns. Addy serves Monotelo's small business clients with preparation of payroll, sales tax, bookkeeping and monthly accounting services. When she is not busy exceeding our clients' expectations, she is running around with her three boys to all of their sporting events. She loves to travel, especially anywhere there is a beach! Addy and her husband live on their family farm with their three boys. Lisa Rondi Accountant 217-839-4226 lisa@monotelo.com Lisa is a small business specialist for Monotelo Advisors. Lisa has 24+ years of experience in tax return, payroll, sales tax and bookkeeping preparation and review in the Gillespie and Carlinville offices. She strives to help clients with their financial needs in the ever-changing tax system. She enjoys spending time with her family, her church family and doing anything outdoors. She also enjoys spending time on her craft projects and she plays several musical instruments. Lisa lives in Mt. Clare, IL with her pets. Marianne Richter Engagement Manager 847-923-9015 marianne@monotelo.com Marianne Richter is responsible for ensuring that Monotelo is delivering a high level of customer service and meeting the expectations of Monotelo’s small business relationships. Marianne brings 13+ years of diversified training and marketing experience in the consumer goods industry to Monotelo. Working in senior management roles at Kraft Foods for more than a decade, she had national profit and loss responsibility for consumer brands. In addition to her brand management responsibilities, she also played the role of national trainer, traveling around the country training Kraft's emerging managers. Marianne and her husband, Jim live with their two sons who are both in college. Roger Medallo Relationship Specialist 800-961-0298 Roger@monotelo.com Roger plays a key role in developing relationships with small business owners for Monotelo Advisors. He sets appointments for our CEO and helps promote our Second-Act Planning® program to colleges and universities across the country. Roger has a degree in computer science and plays multiple musical instruments. Roger and his wife, Diane have been married for 6 years.

Going to an office is no longer a requirement of conducting business in the age of the internet, cell phones, Skype and GoTo meetings. OCTOBER 2017 MONOTELO QUARTERLY Quarterly: Oct 17 UNLOCKING the Missed Deductions of a Home Office Small-business owners should not miss the benefit of a home office deduction out of fear of a tax audit. Going to an office is no longer a requirement of conducting business in the age of the internet, cell phones, Skype and GoTo meetings. This means an increasing number of small-business owners are working from home, and eligible to claim a home office deduction. When Properly implemented, this deduction can make a significant difference in your tax liability. WHAT CONSTITUTES A HOME OFFICE? In order to claim a deduction for a home office the IRS requires that a designated space be used exclusively and regularly for business. Going to an office is no longer a requirement of conducting business in the age of the internet, cell phones, Skype and GoTo meetings. Exclusively used for business means it cannot ever be used for personal reasons during the tax year, this includes any type of storage for personal items. Although the office is to be used only for business, the tax code does not mandate that it be a separate room, it can be part of a room - walls are not a requirement. The office must also be used on a regular basis for business. HOW TO DEDUCT EXPENSES FOR THE HOME OFFICE There are two different methods you can use to claim a home office deduction, the actual expense method and the simplified method. ACTUAL EXPENSE METHOD The actual expense method allows you to deduct all direct expenses and a portion of any indirect expenses. Direct expenses are any expenses incurred specifically for the home office, such as painting the office or putting in new carpet. Indirect expenses include any expenses incurred for the home such as mortgage interest, property taxes and utilities. To claim these indirect expenses you need to determine the portion of the expenses that relate to the home office. This can be calculated by dividing the square footage of the office by the square footage of the house. You can also claim depreciation or a rent deduction for the part of the home used for business purposes. On the downside, when you sell the home any depreciation taken needs to be recaptured. This can be an unpleasant surprise come tax time. When using the actual expense method, detailed records and supporting documentation must be kept for all expenses. SIMPLIFIED METHOD If you prefer not to maintain records of these expenses, you can still take a home office deduction using the simplified method. The simplified method is calculated by simply multiplying the square footage of the office by $5 per square foot (up to 300 sq. ft.). The advantage to this method is the IRS does not require you to keep any records that are required by the actual expense method. The main drawback of the simplified method is that you will not be able to deduct your actual expenses if they exceed the allowance of the simplified method. The best solution is to keep track of all of your expenses and then determine at the end of the year which method will provide the greater deduction. MILEAGE Regular commuting to and from work is not a deductible expense, however travel between your primary office located in your home to your second office is classified as business miles that are deductible. This does not mean that you can set up a "home office" to deduct your regular commuting miles. It means that if your home office is where you conduct the majority of your business, you can deduct any mileage to a secondary location. Setting up a home office can potentially create several thousands of dollars in deductible mileage each year. TAKE AWAY Even the smallest home office can unlock significant deductions if the expenses are properly accounted for using either the actual or simplified method. It is very important that the space be used exclusively for business purposes. July 2017 Save as PDF May 2018

Why 401k Plans Are Sub-Optimal

By failing to plan ahead, you will find that most of your medical expenses are worthless on your tax return. With a little planning, you can prevent this. 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.