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

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SMALL BUSINESS TIPS DEDUCT YOUR MEDICAL EXPENSES BY HIRING YOUR SPOUSE What Business Types Qualify? This option is available to you if you operate your business as one of the following: A sole proprietorship A partnership (provided your spouse is not a partner in the business) An LLC taxed as a sole proprietorship or partnership A real estate rental business A farm business If your business is organized as an S-Corporation than this option will not be available to you. While insurance premiums and out-of-pocket medical expenses can be deducted as itemized deductions , the limitations placed on those deductions make it difficult to realize any actual benefit. However, if you operate your own business, you may be able to get around these limitations by hiring your spouse and paying them through tax-free fringe benefits, including reimbursing them for medical expenses and insurance premiums. How Does This Work? Hire Your Spouse: Your spouse needs to be operating as a real employee for the business, performing services at your direction that benefit the business. Your spouse should not be a co-owner of the business and should not have any title in the business assets or control over the business bank account. To substantiate their role as an employee your spouse should keep a timesheet to document the hours that they worked and the tasks that they completed. Don’t Pay Cash Wages: If you pay your spouse cash wages for working in your business you are simply moving money around without creating any tax savings. In fact, you are likely increasing your tax burden by converting qualified business income to non-qualified wage income. Instead of paying them cash wages you can compensate them through tax-free employee benefits which can provide you with a sizeable tax break and avoid the need to file payroll tax returns. Establish a Medical Reimbursement Arrangement: A medical reimbursement arrangement allows you to compensate your spouse for their work by reimbursing out-of-pocket medical expenses and health insurance premiums. This provides the business with tax-deductible compensation expenses and tax-free income to your spouse. If your spouse is your only employee, you can easily establish a 105-HRA plan to reimburse them for their medical expenses by signing an agreement between yourself and your spouse. If you have additional employees you will need to establish an ICHRA plan, which has additional requirements. If you have multiple employees and want to establish a medical reimbursement arrangement, please reach out to us for more guidance. To qualify the insurance premiums for reimbursement your spouse should purchase a health insurance plan in their name that covers the entire family (including you). Then you, as the employer, reimburse your spouse for the premiums. The reimbursement arrangement can also be used to reimburse your spouse for any out-of-pocket expenses that the insurance doesn’t cover, including deductibles, copays, and prescriptions for your entire family. Pay a Reasonable Amount: To make sure the employee benefits you pay your spouse can withstand IRS scrutiny, make sure that the amount they are compensated is reasonable for the work that they are performing. A good rule of thumb is not to compensate your spouse more than you would compensate someone else for those same services. Consider Other Fringe Benefits: While health insurance and medical expenses are typically the largest items you can provide to your spouse as employee benefits, there are other benefits that you may also be able to provide: Education. You can reimburse your spouse for job-related education expenses Life Insurance. You can provide your employees with up to $50,000 in group term life insurance coverage Working Condition Fringe Benefits. You can reimburse your spouse employee for expenses that help them do their job. For example, you can reimburse the cost of a cell phone they use for work and they are not required to track how much of their phone use is for business. Summary Hiring your spouse to work for your business can provide some meaningful tax benefits by allowing you to deduct personal expenses that otherwise would not be deductible. To qualify for these deductions, you need to follow some simple guidelines: make sure your spouse is operating as your bona fide employee establish a formal medical reimbursement arrangement compensate fairly for the services provided If you would like assistance establishing a medical reimbursement plan for your spouse or other employees, please give us a call.

2023-2024 Tax Brackets and Federal Income Tax Rates There are seven federal income tax brackets. Here's what they are, how they work and how they affect you. There are seven federal tax brackets for the 2023 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your bracket depends on your taxable income and filing status. These are the rates for taxes due in April 2023. Tax brackets and rates for the 2023 tax year, as well as for 2022 and previous years, are elsewhere on this page. 2023 Federal Income Tax Brackets (for taxes due in April 2022 or in October 2022 with an extension ) Single filers Married, filing jointly Married, filing separately Head of household 2022 Federal Income Tax Brackets (for taxes due in April 2023) Single filers Married, filing jointly Married, filing separately Head of household How tax brackets work The United States has a progressive tax system, meaning people with higher taxable incomes pay higher federal income tax rates. Being "in" a tax bracket doesn't mean you pay that federal income tax rate on everything you make. The progressive tax system means that people with higher taxable incomes are subject to higher federal income tax rates, and people with lower taxable incomes are subject to lower federal income tax rates. The government decides how much tax you owe by dividing your taxable income into chunks — also known as tax brackets — and each chunk gets taxed at the corresponding tax rate. The beauty of this is that no matter which bracket you’re in, you won’t pay that tax rate on your entire income. The percentage of your taxable income that you pay in taxes is called your effective tax rate. To determine effective tax rate, divide your total tax owed (line 16) on Form 1040 by your total taxable income (line 15). Example #1: Let’s say you’re a single filer with $32,000 in taxable income. That puts you in the 12% tax bracket in 2021. But do you pay 12% on all $32,000? No. Actually, you pay only 10% on the first $9,950; you pay 12% on the rest. (Look at the tax brackets above to see the breakout.) Example #2: If you had $50,000 of taxable income, you’d pay 10% on that first $9,950 and 12% on the chunk of income between $9,951 and $40,525. And then you’d pay 22% on the rest because some of your $50,000 of taxable income falls into the 22% tax bracket. The total bill would be about $6,800 — about 14% of your taxable income, even though you're in the 22% bracket. That 14% is your effective tax rate. That's the deal only for federal income taxes. Your state might have different brackets, a flat income tax or no income tax at all. What is a marginal tax rate? The term "marginal tax rate" refers to the tax rate paid on your last dollar of taxable income. This typically equates to your highest tax bracket. For example, if you're a single filer with $30,000 of taxable income, you would be in the 12% tax bracket. If your taxable income went up by $1, you would pay 12% on that extra dollar too. If you had $41,000 of taxable income, however, most of it would still fall within the 12% bracket, but the last few hundred dollars would land in the 22% tax bracket. Your marginal tax rate would then be 22%. How to get into a lower tax bracket and pay a lower federal income tax rate Two common ways of reducing your tax bill are credits and deductions. Tax credits can reduce your tax bill on a dollar-for-dollar basis; they don't affect what bracket you're in. Tax deductions, on the other hand, reduce how much of your income is subject to taxes. Generally, deductions lower your taxable income by the percentage of your highest federal income tax bracket. So if you fall into the 22% tax bracket, a $1,000 deduction could save you $220. In other words: Take all the tax deductions you can claim — they can reduce your taxable income and could kick you to a lower bracket, which means you pay a lower tax rate. 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.

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.

SMALL BUSINESS TIPS DEDUCTING 100% OF YOUR BUSINESS MEALS In the past, the tax deduction for business-related meals has generally been limited to 50% of the cost of the meal. However, to help the restaurant industry recover from the Covid-19 pandemic, the relief bill signed into law at the end of last year temporarily increased the business meal deduction to 100% for tax years 2021 and 2022. This means that you can now fully deduct the cost of your business meals provided they meet a few requirements. What Qualifies as a Business Meal? The first step is to make sure your meal qualifies as a business expense. Deductible business meals include: Meals shared between you and a person with whom you could reasonably expect to engage in business activity, such as a customer, supplier, employee, partner, or professional advisor. Meals for yourself while out of town on a qualified business trip. Note that you cannot deduct your own meals while working unless you are either out of town on an overnight business trip or meeting with a potential business associate. To substantiate your meal as a qualified business expense you should save the receipt as well as document who you met with or the purpose of your out-of-town trip. How Do You Qualify for the 100% Deduction? Since the purpose of temporarily increasing the meal deduction was to bolster the struggling restaurant industry, the 100% deduction only applies if the meal is provided by a business that prepares and sells food or beverages to customers for immediate consumption. You are not required to purchase the meal directly from a qualified restaurant, as long as the food is provided by one. This means that meals you purchase through a third-party food delivery service can still qualify for the 100% deduction. What Doesn’t Qualify for 100% Deduction? Businesses that are not qualified restaurants include any that primarily sell pre-packaged food or beverages not for immediate consumption, including: Grocery stores Specialty food stores Beer, wine, or liquor stores Drug stores Convenience stores Newsstands Vending machines or kiosks Meals purchased from any of the places mentioned above would still be limited to the 50% deduction. If you choose to use federal per diem rates to deduct your meals during business trips or to reimburse your employees for business meals, you are also limited to the regular 50% deduction. To qualify for the 100% deduction you must use the actual cost of the meals. Summary Business meals have traditionally been a sore spot for business owners due to the limited tax benefits relative to other business expenses. With this temporary increase you can now fully deduct your business meals as long as they are a qualified business expense and are provided by a qualified restaurant.

What sets Monotelo Advisors apart is our unique focus on planning ahead to reduce your tax burden every year. Let us help you plan for retirement. Planning for retirement can be stressful, but it doesn’t have to be when you have a step-by-step process in place to guide you. Schedule An Appointment and get started Want to get started or learn more? Schedule a meeting, over the phone, Zoom or in person. Schedule an Appointment Learn More What We Offer Values-Based Retirement planning When your values are clear, your decisions are easy. That’s why your financial plan needs to start with your values, continue with your life goals, and wrap up with a clearly-defined road map to get you there. Explore how our planning process will provide you with a road map to having all your financial decisions in perfect alignment with your most deeply held values and life goals, by scheduling a no-obligation introductory call. Get Started what we offer Bring Alignment to All Your Financial Decisions When your values are clear, your decisions are easy. Peace of mind begins when you have clarity about your values and goals. Peace of minds arrives when there is complete alignment between your values, your goals, and all your financial decisions. Reduce your lifetime tax liability Health care and taxes are two of the largest expenditures for retirees. You have little control over one, but enormous control over the other. Our planning process will help you reduce your lifetime tax liability so your money is freed up to allocate in ways that bring you the most joy and fulfillment in retirement. Increase the productivity of your assets Having a partner who can come alongside you to help you maximize the productivity of your assets and navigate the changing phases of retirement can empower you to live your best life possible and leave a meaningful legacy to the people and organizations you care about. Peace of mind up to and through retirement Having a comprehensive financial plan in place brings you confidence that all the pieces of the puzzle are working together for your best life possible. Once your personal retirement plan is complete, we will walk with you to implement and monitor your plan. How We Help Get Started Schedule a Meeting and Prepare Your Financial Documents Schedule a meeting for a day and time that work for you. Prepare to spend 90 minutes with us and bring all your financial information to that meeting, including your tax returns, investment statements, mortgage information etc. Your Financial Road Map Meeting The road map process begins with the initial meeting. In this meeting we will help you will identify your most deeply held values and life goals. We spend the time necessary to discover the things that matter most to you so we can bring perfect alignment between your most deeply held values, your life goals and the all your financial decisions. The Plan A comprehensive financial plan is so much more than a risk tolerance survey and an asset allocation model. You plan will start with your values and your goals, and it will be designed to maximize the productivity of your assets so you can live your best life possible and leave the legacy you want to leave to the loved ones and organizations you care about. Relax and Enjoy Peace of Mind After the discovery and values-based planning process is complete, our team of advisors will come alongside you to help you navigate the changing face of retirement. From the savings and accumulation phase, to the distribution and lifestyle phase, to the health care needs and legacy phase, we will monitor your plan to keep up with your changing needs. How The Process Works Get Started Helpful retirement tips and articles. Long-Term Tax Planning: Proven Methods to Minimize Your Lifetime Tax Liability This marks the final week of our tax planning series, where we'll bring together the key concepts covered over the past few weeks. For... The Mega Backdoor Roth: A Powerful Retirement Strategy The Mega Backdoor Roth has become an increasingly popular strategy for individuals looking to supercharge their retirement savings,... IRA vs. Roth IRA: Pre-Tax vs. Post-Tax Contributions and Conversions This is week five of our 7-week series. If you wish to read our previous articles, you can chose them from the list below: Tax Planning:... View More More services from Monotelo Small Business Tax Services We will help you minimize your short-term and lifetime tax liability to free up the cashflow needed to help you grow your business and build for your future. Learn more Year-End T ax Filing Services We will help you minimize your taxable income by capturing the deductions and credits available to maximize your refund. Learn more