The Fallacy of the Formula Quarterly: Oct 17 What do Circuit City, Fannie Mae and Pitney Bowes all have in common? If you answered that they have all been remarkable failures in the past eighteen years, you would be half-right. If you answered that they have all been remarkable failures AND were three of the eleven “Great Companies” identified in Jim Collins’ Good to Great book, you would be more-right. Good to Great: Why Some Companies Make the Leap... and Others Don't took the business management community by storm when it was published in October of 2001. Like the latest Hallmark movie, the book follows the same pattern of past business books: create a list of great companies based on some “quantifiable” measure and then identify the formula that brought these companies to greatness. And imply that your readers can apply the same magic formula to achieve greatness within their own organizations! Ignore luck, randomness and good fortune, and over-attribute all the greatness to the formula and the management team. Oh, and one more thing – make sure you have a BHAG! (a big, hairy, audacious goal) It doesn’t matter if the BHAG is a good one, it matters that it’s HAIRY and AUDACIOUS! The core message of Built to Last is that good management practices can be identified and implemented, and once implemented good results will follow. The fallacy of this logic is that Collins was essentially comparing successful firms with less successful firms and attributing the success to something other than luck and randomness. Of the 5,000+ publicly traded companies that existed from 1986 to 2001, there was a reasonable probability that eleven of them would outperform over a 15-year period! “Knowing the importance of luck, you should be particularly suspicious when highly consistent patterns emerge from the comparison of successful and less successful firms. In the presence of randomness, regular patterns can only be mirages.” Daniel Kahneman. Nassim Taleb touched on this human tendency when he introduced the narrative fallacy in The Black Swan. The narrative fallacy describes how flawed stories of our past shape our views and expectations of our universe. Driven by our need to make sense of our world, narrative fallacies are the simple, compelling stories that create meaning and assign larger roles to things like talent and intelligence rather than luck or randomness. Focusing on the few significant events that actually happened, rather than the countless number of events that could have happened, we wrap our view around a nice clean narrative and fail to account for the randomness that exists in our world. People have a deep need to be reassured that actions have consequences. And we all want to believe that success will be the rewards of courage and good decision-making. Books like Good to Great provide a nice clean message about the determinants of success and failure by offering a sense of understanding. But their logic is faulty and misleading. The reality is that the world (and especially stock prices!) operates in a more-random fashion than most people care to recognize. The recognition that our world has a randomness to it does not however, leave us powerless. It can actually empower us to make better decisions when we recognize that fact. We will address how to make better decisions in light of a random world in next week’s Insight, but before we wrap up this week, let’s look at how Collins’ eleven “great” companies have performed since Good to Great was published 18 years ago: On a cursory look, the end results show three remarkable losers in Circuit City, Fannie Mae and Pitney Bowes; four weak performers in Kimberly Clark, Kroger, Wells Fargo and Walgreens; two market performers in Gilette and Wells Fargo and three winners in NuCor, Philip Morris and Abbot Labs: Remarkable Losers 3 Market Performers 2 Underperformers 4 Winners 3 That doesn’t sound like “greatness.” Some underperformed, some outperformed and some were right in the middle. It sounds more like randomness and a reversion to the mean from former greatness.

Monotelo Advisors Inc Tax Planning Engagement Letter Heading 1 Thank you for choosing Monotelo to assist you with your tax planning needs. Tax planning is a strategic approach to managing finances that aims to minimize tax liability and maximize savings. By organizing income, expenses, investments, and expenditures efficiently, individuals and businesses can take full advantage of tax benefits, deductions, and credits. Effective tax planning not only reduces the amount of taxes owed but also contributes to better financial health by freeing up resources for savings, investments, and future growth. This engagement letter outlines the scope of our services, your responsibilities, and our commitment to providing you with accurate and timely solutions. By agreeing to this letter, you authorize Monotelo to prepare a tax plan that will help to reduce your short-term and lifetime tax liability. We look forward to working with you to ensure that you retain more of your hard-earned money.

Monotelo Advisors Inc Tax Planning Engagement Letter Heading 1 Thank you for choosing Monotelo to assist you with your tax planning needs. Tax planning is a strategic approach to managing finances that aims to minimize tax liability and maximize savings. By organizing income, expenses, investments, and expenditures efficiently, individuals and businesses can take full advantage of tax benefits, deductions, and credits. Effective tax planning not only reduces the amount of taxes owed but also contributes to better financial health by freeing up resources for savings, investments, and future growth. This engagement letter outlines the scope of our services, your responsibilities, and our commitment to providing you with accurate and timely solutions. By agreeing to this letter, you authorize Monotelo to prepare a tax plan that will help to reduce your short-term and lifetime tax liability. We look forward to working with you to ensure that you retain more of your hard-earned money.

WHAT WILL HAPPEN When Social Security Runs Out? At the end of August 2021, a new report was released that showed Social Security is projected to run out of money in 2033, one year earlier than previous calculations. With that deadline only 12 years away it is likely to impact everyone who is not already enrolled in Social Security as well as many who are. What will happen when the fund runs out? You may have heard that benefits will stop being paid once the fund runs out, but that is not likely to happen. We have laid out some of the changes that are likely to be made to Social Security over the next 12 years or after the fund runs out around 2033. Reduced Benefits If no changes are made before the fund runs out, the most likely result will be a reduction in the benefits that are paid out. If the only funds available to Social Security in 2033 are the current wage taxes being paid in, the administration would still be able to pay around 75% of promised benefits. While a 25% reduction in benefits could significantly hurt the retirement plans of those who are relying on their Social Security benefits, it is far less damaging than the program being shut down entirely. With the potential for benefits to be reduced, some retirees may be tempted to apply for their benefits early to receive as much as they can before the fund runs out. However, if you start taking your benefits as soon as allowed, they will be reduced to 70% of your full-retirement age benefit. Comparing this to the 75% that could be received even after the fund runs out, you would still be hurting your retirement by applying early. Increased Wage Taxes To avoid benefit reductions, congress may vote to increase the Social Security taxes charged on employee wages. If the increase were put in place immediately, the employee portion of the tax would need to increase from 6.2% to 8%. This would represent an additional $900 in taxes paid annually for an employee making $50,000 per year. Another proposal in wage taxes that has become popular in recent years is an additional tax on high earners. Rather than increasing the social security tax of 6.2% on all payers, this would implement a new tax on wage income above $400,000 to help stabilize the social security fund. Increased Full Retirement Age Even if the fund does not run out, the full retirement age needed to receive your full Social Security benefit is likely to go up in the future as life expectancies increase. Since the Social Security program was first started the average life expectancy has increased 7 years and yet the full age retirement for Social Security has only increased 2 years. As the fund begins to run out, it is likely that the full retirement age will be raised even further, along with harsher benefit cuts for those who apply early. Summary While Social Security benefits are unlikely to be completely eliminated 12 years from now, there is a strong possibility that they will be reduced significantly if revenues are not increased in the next few years. To make sure that your retirement plan is secure, you should analyze your retirement income stream under the assumption that your Social Security benefits will be reduced and determine what changes need to be made if that happens. Schedule a Meeting to Learn More 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.

Why 401k Plans Are Sub-Optimal

Monotelo Advisors spoke at (PFFW) Professional Firefighters of Wisconsin's bi-annual meeting held in February at the Hilton City Center Hotel in Milwaukee, WI. Monotelo Speaks To The Professional Firefighters of Wisconsin Monotelo Advisors spoke at (PFFW) Professional Firefighters of Wisconsin's bi-annual meeting held in February at the Hilton City Center Hotel in Milwaukee, WI. Monotelo was invited to speak because of their unique knowledge of the firefighting profession and how they apply that knowledge to help firefighters retain a higher percentage of their income. "We find that career firefighters are overpaying anywhere from a few hundred dollars per year to over one thousand dollars per year on their tax bill" - shared Jim Allen, Director of Monotelo Advisors. In their presentation to the PFFW, Monotelo offered a no-obligation "Look-back'' for IAFF local members. The "Look-back'' starts with a brief discussion to review job related expenses. Monotelo then compares the expenses identified in the discussion with the expenses that were used on the prior tax returns. When there is a meaningful difference between the two, Monotelo will "We find that career firefighters are overpaying anywhere from a few hundred dollars per year to over one thousand dollars per year on their tax bill" correct the past three years and recover money that was left on the table. About the PFFW - The Professional Firefighters of Wisconsin represents 60 locals with over 4,000 career firefighters across the state of Wisconsin. "Every two years we bring in key leaders from around the state, elected officials, and companies like Monotelo that we believe can help our members. I am very particular as to who I let speak to our guys, and Monotelo did a great job," said Mahlon Mitchell, president of the PFFW. "My local affiliation is IAFF Firefighters Local 311," explained Mitchell. "We invited Monotelo to come meet with our members. We had a full day filled with our members coming in to have Monotelo review their past returns and prepare their current year's return. I've heard nothing but good things; so we're really appreciative of what they did for us." In addition to Local 311, Monotelo has had the opportunity to impact the entire state of Wisconsin using technology. Coming into local meetings via the web, Monotelo offered guidance, answered questions and gave local members the opportunity to recover some of their hard-earned money. For questions about how Monotelo can help your local, contact Jim Allen at jallen@monotelo.com . ARE YOU GETTING BEAT? Don't pay the federal government more tax than the law requires. Call Monotelo today for a NO-COST, NO-OBLIGATION, tax review designed to minimize your tax bill and maximize your take home pay. MONOTELO.COM | 800.961.0298

Retirement Readiness Our Retirement Readiness series is four separate webinars designed to address today's most important retirement issues. Each 20 minute webinar is designed to provide 15 minutes of value-packed content and close with 5 minutes for Q&A You can use the links below to watch the recorded webinars "When Will I Be Ready and What Should I Do Today to Prepare for Retirement?" When Will I Be Ready and What Should I Do Today To Prepare for Retirement is a 20 minute webinar that will walk through the three most important steps you can take to get yourself on track to safely retire on your time frame. In addition to the three specific action steps, all attendees will receive our Safe Retirement Zone calculator as a valuable tool that they can use to help take control of their future. View On-Demand Video Social Security Claiming Strategies - How to Maximize Your Lifetime Benefit The Social Security Claiming Strategies module can have a profound impact because most people don't understand the different options they have when claiming Social Security, and they don't understand the financial implications of the different options. If you are married, your options have doubled, and if you are divorced you may still have the option of a spousal claim. Understanding the spousal benefits and the delayed benefits may not only significantly increase your monthly income, it could change the trajectory of your retirement years. Our Social Security Claiming Strategies module is invaluable if you or someone you care about is in or near retirement. View On-Demand Video Tax Efficient Retirement Planning in Light of the Recent Tax Cuts and Jobs Act The Tax Efficient Retirement Planning module will address the massive shift in the tax code that took place last January. These changes radically impact how individuals should be preparing for retirement, and they provide significant opportunities to take action between now and December of 2025, when the tax cuts are set to expire. The Tax Efficient Retirement Planning module will empower you with the tools to take full advantage of the current compelling, but temporary opportunities created by the new tax laws. View On-Demand Video Small Business Retirement Planning The Tax Cuts and Jobs Act recently passed by congress enacted the most significant tax legislation changes that our country has seen in over thirty years. These changes have a significant impact on how small business owners should prepare for retirement - and that is why we put together our Small Business Retirement Planning module. If you are a small business owner or independent contractor and your financial plan was put in place prior to December of 2017, there is no way you are taking advantage of the new opportunities. Our Small Business Retirement Planning module will help small business owners take full advantage of the recent changes to maximize a lifetime of savings that are currently available. But there is a sense of urgency, because the current tax cuts are set to expire in 2025. View On-Demand Video

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.

Get started File from home File your taxes from home. Upload your documents, and get started. Need additional tax help? Schedule an appointment to get started. Schedule an appointment Get started Ready to start your 2023 tax return? 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 Have questions, or need help? Give us a call or send us an email; me are happy to help. Call Us Email Us Wondering where your refund is? Not sure what tax documents you need, or want to upload a file? Refund Tracker Documents checklist File Upload

Contact us Phone: 800-961-0298 Fax: 847-929-9134 Email: Info@monotelo.com Give us a call Schedule an appointment 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 Recent posts & news 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 Important Tax Updates for 2026 As the 2025 tax season approaches, taxpayers and businesses must stay informed about critical updates and deadlines to ensure a smooth filing process. Here’s a comprehensive guide to help you navigate this year’s tax requirements. Key Dates Individual Tax Filers: Jan. 31, 2026:  Deadline for employers to furnish Form W-2 to employees and for businesses to provide certain Form 1099s to contractors and recipients. Late Jan. 2026 (TBD):  The IRS is expected to begin accept A Journey Toward the King Merry Christmas! As we gather with family, reflect on the year behind us, and look forward with hope, we want to welcome you to this year’s Christmas message. At Monotelo Advisors, it is a joy and a privilege to walk alongside you—through every season and every milestone. This Christmas, we invite you to pause with us and revisit one of the most awe‑inspiring moments in history. The night a star lit the sky and hope entered the world: The Star That Changed Everything I s Gratitude, Generosity, and the Power to Change Lives As Thanksgiving approaches, many of us pause to reflect on what we’ve been given: family, health, opportunities, and the simple blessing of food on our Thanksgiving table. Gratitude is more than a seasonal sentiment; it’s a transformative force that shapes our mental health, relationships, and even our financial decisions. Why Gratitude Matters Research consistently shows that people who intentionally count their blessings live happier lives and experience less depression View More Stay up to date with the latest tax and market analysis. Subscribe to receive our weekly market and tax analysis. Site Title

Thank you for Uploading We will be in touch with you soon Return to home