PRIVACY POLICY This Privacy Policy governs the manner in which Monotelo Advisors collects, uses, maintains and discloses information collected from users (each, a “User”) of the monotelo.com website (“Site”). This privacy policy applies to the Site and all services offered by Monotelo Advisors. PERSONAL IDENTIFICATION INFORMATION We may collect personal identification information from Users in a variety of ways, including, but not limited to, when Users visit our site, register on the site, subscribe to the newsletter and in connection with other activities, services, features or resources we make available on our Site. Users may be asked for, as appropriate, name, email address, mailing address, phone number, etc. Users may, however, visit our Site anonymously. We will collect personal identification information from Users only if they voluntarily submit such information to us. Users can always refuse to supply personal identification information, except that it may prevent them from engaging in certain Site related activities. NON-PERSONAL IDENTIFICATION INFORMATION We may collect non-personal identification information about Users whenever they interact with our Site. Non-personal identification information may include the browser name, the type of computer and technical information about Users means of connection to our Site, such as the operating system and the Internet service provider’s utilized and other similar information. WEB BROWSER COOKIES Our Site may use “cookies” to enhance User experience. User’s web browser places cookies on their hard drive for record-keeping purposes and sometimes to track information about them. User may choose to set their web browser to refuse cookies, or to alert you when cookies are being sent. If they do so, note that some parts of the Site may not function properly. HOW WE USE COLLECTED INFORMATION Monotelo Advisors collects and uses Users personal information for the following purposes: To improve customer service. Your information helps us to more effectively respond to your customer service requests and support needs. To improve our Site. We continually strive to improve our website offerings based on the information and feedback we receive from you. To administer a content, promotion, survey or other Site feature. To send Users information they agreed to receive about topics we think will be of interest to them. To send periodic emails The email address Users provide may be used to respond to their inquiries, and/or other requests or questions. If User decides to opt-in to our mailing list, they will receive emails that may include company news, updates, related service information, etc. If at any time the User would like to unsubscribe from receiving future emails, we include detailed unsubscribe instructions at the bottom of each email or User may contact us via our Site. HOW WE PROTECT YOUR INFORMATION We adopt appropriate data collection, storage and processing practices and security measures to protect against unauthorized access, alteration, disclosure or destruction of your personal information, username, password, transaction information and data stored on our Site. Sensitive and private data exchange between the Site and its Users happens over a SSL secured communication channel and is encrypted and protected with digital signatures. SHARING YOUR PERSONAL INFORMATION We do not sell, trade, or rent Users personal identification information to others. We may share generic aggregated demographic information not linked to any personal identification information regarding visitors and users with our business partners, trusted affiliates and advertisers for the purposes outlined above. We may use third party service providers to help us operate our business and the Site or administer activities on our behalf, such as sending out newsletters or surveys. We may share your information with these third parties for those limited purposes provided that you have given us your permission. CHANGES TO THIS PRIVACY POLICY Monotelo Advisors has the discretion to update this privacy policy at any time. When we do, the revised date will be added at the bottom of this page. We encourage Users to frequently check this page for any changes to stay informed about how we are helping to protect the personal information we collect. You acknowledge and agree that it is your responsibility to review this privacy policy periodically and become aware of modifications. YOUR ACCEPTANCE OF THESE TERMS By using this Site, you signify your acceptance of this policy and terms of service. If you do not agree to this policy, please do not use our Site. Your continued use of the Site following the posting of changes to this policy will be deemed your acceptance of those changes. CONTACTING US If you have any questions about this Privacy Policy, the practices of this site, or your dealings with this site, please contact us at: Monotelo Advisors www.monotelo.com info@monotelo.com

SMALL BUSINESS TIPS NEW PROVISIONS FOR THE PAYCHECK PROTECTION PROGRAM After months of negotiations Congress has come to an agreement on another stimulus package which was signed into law on December 27th. Included in the many provisions in the bill is some welcome relief for small-business owners through enhancements to the Paycheck Protection Program. Deduction for Expenses Paid with Loan Funds When the first round of Paycheck Protection loans were approved by Congress earlier this year it was the intent of Congress that forgiveness of the loans would not create taxable income for the recipients. The IRS, however, had their own interpretation of the law and in May issued a notice stating that any expenses paid using funds from a forgiven PPP loan could not be used as deductions on the recipients tax returns. By disallowing the associated expenses, the IRS in effect made the forgiven loans taxable against the wishes of Congress. This disparity between Congress’ intentions and the IRS’ interpretation of the law was corrected with this new bill which clearly states that no deductions will be denied due to the forgiveness of the PPP loans. By reinstating the deductions for expenses covered with PPP loans Congress has finally made the PPP forgiveness tax-free as originally intended. Second Round of PPP Loans The bill also provides for another round of PPP loans which means small-business owners who either didn’t receive a loan in the first round or have exhausted the funds from their first loan can now apply to receive another. The criteria to qualify for this second round are stricter than they were for the first: Only businesses with 300 or fewer employees are eligible Businesses who received a previous PPP loan must either have already used the full loan or demonstrate that they will use the full loan To be eligible a business must have experienced a drop in revenue of at least 25% in any one quarter of 2020 when compared to that same quarter in 2019. You only need to demonstrate a 25% drop for a single quarter to qualify, but it must be compared to the same quarter of 2019. You cannot compare your third quarter of 2020 to your second quarter of 2019. As with the first round of PPP loans a business must have been in operation as of February 15th 2020 to be eligible for a loan. The deadline to apply for the second round of loans is March 31, 2021. Summary If you received a PPP loan during the first round earlier this year you can now rest assured that your forgiven loan will be fully tax-free. If your business experienced a decline of at least 25% in any quarter in 2020 relative to that same quarter in 2019 you have until March 31st to apply for another PPP loan to cover your expenses.

Going to an office is no longer a requirement of conducting business in the age of the internet, cell phones, Skype and GoTo meetings. 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.

Five Year-End Business Deductions Schedule Your Tax Planning Call Read "Staying Out of the 'Danger Zone' of the New Small-Business Deduction"

THE AMERICAN RESCUE PLAN ACT We apologize in advance for the tax speak in this update. Sometimes it’s hard to remove the tax language and maintain accuracy. Please stay with us for the next three minutes and reach out if there are any points that need additional clarity. This is part one of a series we are writing to keep you informed on the American Rescue Plan Act of 2021 (ARPA), the legislation that President Biden signed into law on March 11, 2021. While we are planning to provide more insight over the next few months on how this legislation impacts you, in today’s article we will attempt to summarize the most important components of the new legislation. The Quick Summary: The American Rescue Plan Act of 2021 (ARPA) is an extensive relief bill that includes changes to income and payroll taxes, expansion of unemployment benefits, and another round of stimulus payments. Like the two relief bills that preceded it, this new law is extensive, with significant implications on businesses and tax payers. Partial Exclusion of 2020 Unemployment Compensation – The ARPA provides an exclusion from income on the first $10,200 of unemployment compensation received per taxpayer if the taxpayer’s adjusted gross income (“AGI” – remember this term for today’s update!) is less than $150,000. Once AGI reaches $150,000, all unemployment compensation will be taxable. This cutoff at AGI of $150,000 applies to all taxpayers, regardless of filing status. Recovery Rebates and Stimulus Payments - One of the most important provisions of the ARPA relates to additional stimulus payments that will be sent to individuals. These payments are $1,400 ($2,800 for joint filers) plus $1,400 for each dependent on the taxpayer’s return. Unlike the prior stimulus payments, all dependents claimed on a return will be included, regardless of age. Just like the prior recovery rebate checks, there is a phase-out range based on AGI. The AGI phase-out ranges are: Joint filers: $150,000 to $160,000 Head-of-household filers: $112,500 to $120,000 All other filers (single, married-filing-separately): $75,000 to $80,000 Checks will be issued based on the latest tax return that has been filed and processed. This rebate check will be reconciled on your 2021 individual income tax return in the form of a credit . In other words, if you do not receive the third stimulus check and you qualify to receive it, you will receive it through your 2021 tax return. Individual Changes - Some of the more significant tax law changes from the ARPA relate to the child tax credit. For 2021 the credit has been increased to $3,000 per child ($3,600 for a child under the age of six) and is now fully refundable. The new law also increased the age of qualifying children from 16 to 17. As with many other provisions, there is a phase-out based on AGI in excess of threshold amounts. It is important to note that half of this credit will be paid out in the form of an advance starting on July 15, 2021 and will be made monthly through the second half of the year. If the advanced payments you receive exceed the amount you qualify for on your 2021 tax return you will need to repay any excess amount. We will have more details on this later in the year once the IRS puts the system in place to handle these advanced payments. Other provisions in ARPA that also impact individual filers include: Expanded Child Dependent Care Credit – For 2021 only, the credit was made fully refundable and it was increased to 50% of qualified expenses. The credit will be reduced gradually down to 20% of qualified expenses as your AGI exceeds $125,000 and gradually phased out completely after your AGI reaches $400,000. The amount of eligible expenses qualifying for the credit have been increased to $8,000 for one individual and $16,000 for two or more individuals. Premium Tax Credit – The change in ARPA applies to 2021 and 2022 for the premium tax credit for health insurance. The credit is now available to individuals with higher incomes and increases the credit amount for those already qualified. For 2021 only, advance premium tax credits will be available for individuals receiving unemployment compensation. If you have any questions about how these changes will impact you please reach out to us. 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.

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

Want to file your taxes early? Filing Your Tax Return Early Could Boost Your Next Stimulus Check There are a number of reasons to file your tax return early this year. A quicker refund and reduced risk of tax identity theft are at the top of the list for most people… and for some people, a larger stimulus check! So who should file early and who should wait to file in April? The answer to that question depends on whether there were changes to your family or financial situation last year. That's because the next stimulus check will be based on your 2019 tax return or your 2020 return. And the return that was most recently filed when the IRS starts processing your stimulus payment will likely be the one that they use to determine your benefits. When the IRS calculates the amount of your next stimulus check, they will review your tax filing status, the number of dependents, and your adjusted gross income (your AGI). That information will come from your 2019 or your 2020 tax return. If you file early, they will likely pull that information from your 2020 return. If you file later, they will most likely pull that info from your 2019 return. And that dynamic gives you a little more control over your next stimulus check. The IRS started accepting tax returns last week. The two-week delay in accepting tax returns was due to some unexpected programming that was required after the second round of stimulus checks were authorized. If Congress passes President Biden’s $1.9 trillion budget reconciliation bill, that plan is likely to authorize another round of stimulus checks. Based on most estimates, the IRS is not likely to start processing third-round stimulus checks until the second week of March (or later!). If you expect your 2020 tax return to drive a higher stimulus payment, then you may want to file your 2020 return as soon as possible. That way there's time for it to be processed before the IRS starts sending out stimulus payments. So what things might cause a higher stimulus payment? The following changes might drive a larger stimulus payment from your 2020 tax return: THREE REASONS TO FILE YOUR TAXES EARLY You were married in 2020 You had a baby in 2020 You were claimed as a dependent on a 2019 tax return, but not on anyone's 2020 return Your income was lower in 2020 than it was in 2019 And who might consider waiting to file their 2020 tax return? If your income was higher in 2020 than it was in 2019, you may want to wait until April to file your tax return. If you had a death in your family in 2020, and you have fewer dependents on your 2020 tax return, you may want to wait to file your tax return. If you are losing the ability to claim your child as a dependent due to their age in 2020, you may want to consider waiting to file your tax return. If you got divorced in 2020 the best path is less straightforward. There are several factors that could impact whether you should file early or wait. For additional questions, please reach out to us at info@monotelo.com or call us at 800-961-0298. START YOUR 2020 TAX RETURN Upload your doc's online, and start your return from home. Get started 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.

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 The Multiplying Power of Generosity: Feed a Child This Thanksgiving As Thanksgiving approaches, many of us pause to reflect on what we’ve been given: family, health, opportunities, and the simple blessing of a full plate. At Monotelo Advisors, we believe gratitude is most powerful when it moves us to action. This season, we invite you to join us in turning thankfulness into hope for children who need it most. Why This Matters In Sub-Saharan Africa, countless families face an impossible choice every day: feed their children or pay for nec 7 Money-Smart Principles Every Parent Should Teach In today’s fast-paced, consumer-driven world, raising financially wise children is one of the greatest gifts a parent can give. Money... Student Loan Alert: Strategic Moves to Make as SAVE Ends Millions of federal student loan borrowers are facing a new financial reality as the SAVE (Saving on a Valuable Education) plan... Understanding the New Tax Relief for Seniors and Hourly Workers: Tips, Overtime, and Social Security Explained President Trump recently signed a sweeping tax-and-spending bill into law, promising major relief for millions of Americans. While some... Big Beautiful Bill Articles 25 Takeaways From the Big Beautiful Bill The newly passed legislation, referred to as the "Big Beautiful Bill” (BBB), brings one of the most comprehensive overhauls to the U.S.... Big Beautiful Bill Articles New Illinois Sales Tax Changes: What Local Business Owners Need to Know Before July 1, 2025 Beginning July 1, 2025, a new round of sales tax rate changes will take effect across Illinois, as announced by the Illinois Department... View More Stay up to date with the latest tax and market analysis. Subscribe to receive our weekly market and tax analysis. Site Title

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.

Enrolled Agents and Certified Public Accountants Click Here to see IRS Website - Understanding Tax Return Preparer Credentials and Qualifications What is a Certified Public Accountant? Licensed by state boards of accountancy, the District of Columbia, and U.S. territories, certified public accountants have passed the Uniform CPA Examination. They have completed a study in accounting at a college or university and also met experience and good character requirements established by their respective boards of accountancy. In addition, CPAs must comply with ethical requirements and complete specified levels of continuing education in order to maintain an active CPA license. What is an Enrolled Agent? An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by passing the three-part Special Enrollment Examination administered by the Internal Revenue Service. The Comprehensive exam requires the participant to demonstrate proficiency in federal tax planning, individual and business tax return preparation, and representation. Enrolled agents are generally unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before. Enrolled agents are subject to a suitability check and must obtain a minimum of 72 hours of continuing education every three years. Additionally, they must also obtain a minimum of 16 hours of continuing education, including 2 hours of ethics or professional conduct each year.

Quarterly: Oct 17