We are living in interesting times. While it is important to review the retirement and tax planning aspects of your situation on a regular basis, it is equally imperative to review the risk side of your balance sheet as well. In times like today, unaddressed risks can result in a negative impact on an otherwise healthy financial plan. That is why we created our Crisis Checklis t, designed to help families navigate a rapidly changing world. We realize some of the topics are somewhat personal, but our role as advisors is to make sure you have the proper plans in place, both in good times and in times of crisis. More than just identifying potential risks, this checklist will help you create a roadmap of areas exposed to risks that may need to be addressed. We do not want you, your family, or your financial future to be exposed to unexpected risk due to the uncertainty caused by the COVID pandemic. If you would like us to help you assess and mitigate your financial risks please complete the checklist and then schedule a complimentary 20-minute strategy call with us. We look forward to speaking with you soon, Read more articles FINANCIAL PLANNING CHECKLIST 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.

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.

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.

What requirements do you need to meet to avoid capital gains taxes on the sale of your home? TAX IMPLICATIONS of Selling Your Home Save as PDF Read more articles Share Ownership Test: You need to have owned the home for at least 24 months out of the last 5 years leading up to the date of the sale. If you are married, only one spouse needs to own the property. Residence Test: You must have used the property as your primary residence for at least 24 months out of the last 5 years. These 24 months are not required to be consecutive. If you are married each spouse must meet this test to qualify for the full exclusion. Lookback Test: You cannot have taken the exclusion for the sale of another property in the last 2 years. If you meet these three requirements, then you can exclude up to $250,000 ($500,000 if married and filing a joint return) in capital gains from the sale of your home. If you have capital gains in excess of the exclusion amount you will be required to pay taxes on the excess amount. Partial Exclusion If you do not meet the above requirements you may still be eligible for a partial exclusion if you sold the house for one of the following reasons: Work-Related Move: If you or your spouse get a job that is at least 50 miles further from your house than your previous job you can qualify for the partial exemption. Health-Related Move: If you move to obtain medical treatment for yourself or a family member, or to provide medical or personal care for a family member suffering from a disease or injury. Unforeseeable Events: You or your spouse: Dies Gets divorced or legally separated Gives birth to two or more children from the same pregnancy Becomes eligible for unemployment compensation Becomes unable to pay basic living expenses for the household due to a change in employment status. If one of these special circumstances applies to you then you can receive a partial exemption based on the percentage of the 2-year residence requirement that you meet. Example: One year after purchasing your home, you or your spouse gives birth to twins and you decide to sell your home to find a larger home. Even though you do not meet the 2-year ownership and residence requirements, you can receive a partial exclusion of the capital gains since the move was due to the birth of twins. In this case your exclusion would be one half of $500,000 since you resided in the house for 1 of the 2 required years. Exclusion of Gains on Home Sale Before any large financial decision, you should ask yourself “What are the tax implications of this?” Failing to consider the tax impact on some decisions can lead to an unpleasant surprise come tax season. Fortunately, the sale of your personal home is a financial event where you can generally expect favorable tax treatment. That is because the tax code allows you to exclude up to $500,000 in capital gains when selling your primary residence, provided you meet certain requirements. So what are capital gains? Capital gains are any profits from selling personal property above the original purchase price. If you purchase a painting for $10,000 and later sell it for $15,000 you have capital gains of $5,000, which can be taxed at rates up to 20%. However, when you sell your primary residence you can avoid the capital gains tax on the sale if you meet the following three requirements: Summary Our homes are one of the few assets that we own that have the potential to appreciate. If you own your home and live in it for more than 2 years before you sell it, you can exclude up to $500,000 of the gains from your taxable income. If you do not meet the 2-year requirement you may still be eligible for a partial exclusion if one of the provided special circumstances applies to you. 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.

SMALL BUSINESS TIPS Quarterly: Oct 17 Avoid Taxes On Your Reimbursed Employee Expenses If your business has employees then you likely have to reimburse them for out-of-pocket expenses they incur periodically. Reminder: If your business is a S or a C Corporation then you are considered an employee of the corporation, and are subject to the same reimbursement policies as any other employee. When accounted for properly, employee expense reimbursements are deductible to you as the employer, and tax-free to the employee. However, when these reimbursements are not accounted for correctly the IRS can reclassify them as wages, making the full amount subject to both employer and employee payroll taxes as well as income taxes for the employee. To avoid paying taxes on the expense reimbursements you pay to your employees follow these guidelines. There are four requirements that must be met in order to reimburse your employee’s expenses without creating taxable wages for them: Legitimate business expense. You can only reimburse your employees for expenses that serve a legitimate business purpose. Reimbursing your employees for meals from an out of town business trip is a legitimate business expense but reimbursing your employee for a night out with their spouse over the weekend would be considered taxable wages to them. To maintain the tax advantaged status of your employee expense reimbursements you should document the business purpose of each expense. Proof of expense. Before you can reimburse your employee’s expenses you must receive proof from them that the expenses were paid. The substantiation requirements for reimbursed expenses are the same as your ordinary business expenses. Receipts for purchases and mileage logs are the best way to substantiate your business expenses. Refund excess reimbursements . If you reimburse your employee for an amount greater than the expenses they incurred the excess amount will become taxable wages to the employee if not returned within 120 days. Reimburse expenses in a timely fashion . Expenses must be reimbursed in a timely fashion to avoid being reclassified as wages. The IRS states that timeliness is determined by the facts and circumstances of each situation. However, to provide additional guidance the IRS lays out circumstances in which reimbursements will always be considered timely: Reimbursements paid in advance within 30 days before the expense in incurred Substantiation of expenses provided to employer within 60 days of payment Returns of excess payments within 120 days of receipt Expense Reports While a formalized expense report is not required by the IRS to reimburse employee expenses, it is the best way to ensure that you are meeting the four criteria outlined above. If you have employees or if you are the owner of an S or C corporation we would encourage you to have your employees or yourself fill out expenses reports on a regular basis to reimburse out-of-pocket expenses. You can download our expense form template to use in your business either as an Excel worksheet or a PDF. Download Excel File Download as PDF Previous Article

September 2019 SMALL BUSINESS TIPS Quarterly: Oct 17 How Will Your Real-Estate Sale Be Taxed? When you sell real estate property other than your primary residence, the tax implications of that sale depend on whether it qualifies as dealer or investor property. Each of these classifications is taxed differently and carries its own benefits and drawbacks. Dealer Property: Property you hold for sale to customers in the ordinary course of a trade or business is considered Dealer Property. House flipping is a common example of dealer property because you purchase the property with the intention of fixing it up and selling it for a profit. Profits on dealer sales are taxed at your ordinary income rate which can be as high as 37 percent and are also subject to the self-employment tax of 15.3 percent. Dealer sales cannot be used in 1031 exchanges to defer taxes by reinvesting in another property. One advantage of dealer sales is that any losses on a property are considered ordinary business losses which can be fully deducted in the year of the sale as opposed to capital losses on investment property which are limited to $3,000 per year. Investor Property: Property that is held to produce income or long-term appreciation is considered Investor Property. Rental properties are the most common type of investor properties. Profits on investor sales are taxed at capital gains rates which are capped at 20 percent if you own the property for more than one year. Investor property sales are also not subject to the 15.3 percent self-employment tax. The cost of investor properties can also be depreciated over the useful life of the property, although the depreciated cost will need to be recaptured at the time of the sale. Investor properties qualify for 1031 exchanges which allow you to reinvest the profits from the property into a similar property and defer the taxes on the sale until you sell the new property. One disadvantage of investor property sales is that the deduction for capital losses is capped at $3,000 per year unless you have capital gains from another sale to offset the losses. Generally speaking, if you sell a property at a gain you will receive favorable tax treatment if the property is classified as investor property and if you sell a property at a loss you will receive favorable tax treatment if it is classified as dealer property. Classifying Your Property Sale Identifying the correct property classification is not as simple as determining which will give you better tax treatment. In classifying your property sale the IRS will look at multiple attributes of the individual sale and your overall situation: Intent: One key area the IRS will look at when classifying your property sale is your original intent in purchasing the property. If you purchase a property with the intent of fixing it up and reselling for a profit, then that property is considered dealer property. If you buy a property with the intention of fixing it up to operate as a rental property it will be considered investment property. Even if you sell the property before collecting any rent you can classify it as an investment property if you can demonstrate that your original intent was for it to be a rental property. Documenting your intent at the point of purchase is critical to defend your position before the IRS. Holding period: Generally speaking, the less time you own a property before selling it the greater the chance the IRS will classify the property as a dealer property. Frequency of property sales: If you are regularly buying and selling properties you are likely to be classified as a dealer. “Making a Living:” If a significant portion of your income is made through buying and selling properties you are more likely to be classified as a dealer. These attributes are examples of what the IRS looks at to classify your property sale but not a definitive list. There is no standard formula to follow and you need to evaluate the characteristics of each property sale on its own. Understanding the distinction between a dealer and investor property can help you avoid surprises in tax season. Proper planning and record-keeping can also ensure that you receive the best tax treatment available to you when you sell your property. For help determining how your property sale should be classified, please reach out to us. Previous Article

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. 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 Helpful small business articles. Turning Your Residence into a Legitimate Tax Strategy For self-employed professionals and business owners, making the most of available tax strategies can significantly impact your bottom... Are Hidden Human Resource Risks Costing Your Business? Here’s How Assessing Your People Practices Can Protect Your Bottom Line Debbie Rabishaw is a consultant who works with small and medium-sized businesses ranging from 2 to 200 employees. She has seen firsthand... Critical Deadlines and Tax Changes for Small Business Owners As the 2024 tax season approaches, small business owners must stay ahead of critical deadlines and be aware of key tax changes to ensure... 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 Checkout our book written for small business owners!

The Incredibles Tax Efficient Retirement Planning Year-End Tax Planning Tips

Monotelo Advisors spoke before the Iowa Professional Fire Fighters and the Minnesota Professional Fire Fighters in September. Monotelo Speaks To The Iowa Professional Fire Fighters and The Minnesota Professional Fire Fighters Monotelo Advisors spoke before the Iowa Professional Fire Fighters and the Minnesota Professional Fire Fighters in September. 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 presentations in Iowa and Minnesota, Monotelo offered a no-obligation "Look-back" for IAFF local members. The Look-back starts with a brief discussion, reviewing past job related expenses. Monotelo then compares the expenses identified in the discussion with the expenses that were used on their prior tax returns. When there is a meaningful difference between the two, Monotelo will correct "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" the past three years and recover money that was left on the table. John Jensen has been a firefighter for twenty six years. He is a 21 year veteran with Des Moines Local #4 and the Secretary/Treasurer of the Iowa Professional Fire Fighters. After hearing Monotelo share their story, John had a few comments of his own: "As a firefighter and public safety person, I know there is more out there that I can deduct; but I am a firefighter, not a tax expert. And my local accountant doesn't know this either because they don't specialize in firefighters. Monotelo's discussion helped clarify some of these issues." In addition to their work recovering hard-earned money for firefighters, Monotelo is extremely busy from January to April, filing tax returns for firefighters and helping them keep a larger percentage of their earned income. "I suspect we will file somewhere between fifteen hundred and two thousand returns for firefighters all across the United States in 2018" said Jim Allen, director of Monotelo Advisors. "We often hear our new clients say: 'No one has ever taken the time that you guys took to help me get every deduction that is available to me.' And it's usually those new clients who introduce us to their friends and family." Monotelo also partners with IAFF Locals across the country, using technology to attend union meetings to share the information firefighters need. For questions about how Monotelo can help your local, contact Jim Allen at jallen@monotelo.com 800-961-0298 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

Monotelo Advisors Inc FinCEN Beneficial Ownership Engagement Letter Heading 1 Thank you for choosing Monotelo to assist you with the preparation and filing of your FINCEN Beneficial Ownership Information (BOI) report. This engagement letter outlines the scope of our services, your responsibilities, and our commitment to providing you with accurate and timely compliance solutions. By agreeing to this letter, you authorize Monotelo to gather, prepare, and submit the required information on your behalf to ensure compliance with FINCEN regulations. As part of this process, please ensure that you upload a valid driver's license for each shareholder and manager. This step is essential for verifying their identities and completing the report. Additionally, all fields marked with a red asterisk (*) are required and must be completed to proceed. Once all necessary documents are uploaded and required fields are filled out, a blue "FINISH" button will appear, indicating that you are ready to submit the report. We look forward to working with you and ensuring that your reporting obligations are met with precision and professionalism.

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