At Monotelo Advisors our accountants work hard to free up cash flow by helping you minimize your federal tax liability, giving you more money to reinvest into your future. Simplify Your Taxes with Trusted Experts Accurate, stress-free tax preparation for individuals and businesses. Learn More Schedule Meeting Start your 2024 Tax Return Tax Season Resources Gratitude, Generosity, and the Power to Change Lives 24 hours ago 4 min read The Multiplying Power of Generosity: Feed a Child This Thanksgiving Nov 13 3 min read 7 Money-Smart Principles Every Parent Should Teach Aug 12 4 min read Gratitude, Generosity, and the Power to Change Lives The Multiplying Power of Generosity: Feed a Child This Thanksgiving 7 Money-Smart Principles Every Parent Should Teach 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 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

Monotelo Advisors Privacy Policy Introduction At Monotelo Advisors, we respect your privacy and are committed to protecting your personal information. This Privacy Policy outlines our practices regarding the collection and use of your data. Information Collection We may collect personal information from you in various ways, including when you visit our website, subscribe to our newsletter, fill out a form, or interact with our services. The types of personal information we collect may include: - Contact information (name, email address, phone number) - Demographic information (age, gender, location) Use of Information We use the information we collect for various purposes, including: - To provide and improve our services - To communicate with you, including sending newsletters and updates - To personalize your experience on our website - To analyze and understand how our services are used No Sale of Personal Data At Monotelo Advisors, we prioritize the confidentiality and security of your personal information. We want to assure you that we do not sell or share your personal data to any third parties. Your trust is of utmost importance to us, and we are committed to protecting your privacy. Data Security We implement a variety of security measures to maintain the safety of your personal information when you enter, submit, or access your personal information. We do not share personal data (phone numbers) with third parties, affiliates or partners Your Rights Depending on your location, you may have certain rights regarding your personal information, including: - The right to access your personal data - The right to correct any inaccuracies - The right to request deletion of your data - The right to restrict processing of your data - The right to data portability - The right to object to the processing of your data If you wish to exercise any of these rights, please contact us using the information provided below. Changes to This Policy We may update our Privacy Policy from time to time. We will notify you of any changes by posting the new policy on our website. You are advised to review this policy periodically for any changes. No mobile information will be shared with third parties/affiliates for marketing/promotional purposes. All other categories exclude text messaging originator opt-in data and consent; this information will not be shared with any third parties

Welcome to the Big Beautiful Bill Resource Center The Big Beautiful Bill is transforming the landscape of financial legislation and we're here to help you stay informed every step of the way. This page is your central hub for everything related to the bill: expert articles, insightful videos, and in-depth webinars designed to unpack what it means, why it matters, and how it could impact your financial future. Check out our latest webinar. Click here to find a segment that interest you. New provisions for individuals under the Big Beautiful Bill New provisions for business under the Big Beautiful Bill Check out our articles on the Big Beautiful Bill Understanding the New Tax Relief for Seniors and Hourly Workers: Tips, Overtime, and Social Security Explained Jim Richter 25 Takeaways From the Big Beautiful Bill Michael Baumeister Three Sweeping Tax Reforms That Could Impact Your Paycheck Jim Richter

Big Beautiful Bill Webinar Segments Click on the topic you want to learn more about based on our webinar. How the OBBBA has changed exit strategies for business owners Overtime Pay Child Tax Credit SALT Cap No Tax on Tips Senior Deduction Check out our articles on the Big Beautiful Bill Understanding the New Tax Relief for Seniors and Hourly Workers: Tips, Overtime, and Social Security Explained Jim Richter 25 Takeaways From the Big Beautiful Bill Michael Baumeister Three Sweeping Tax Reforms That Could Impact Your Paycheck Jim Richter

Why 401k Plans Are Sub-Optimal

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

SMALL BUSINESS TIPS Quarterly: Oct 17 Putting Your Self-Employment Income Away for Retirement If you are self-employed or own a small business you have the potential to put up to $61,000 per year towards your retirement by setting up a solo 401(k) ($67,500 per year if you are over 50). Of that $61,000 you can put $20,500 into a Roth 401(k) where all of your distributions will be tax-free at retirement. The Tax Cuts and Jobs Act has created a unique opportunity to maximize your retirement cash-flow by utilizing our current low tax rates to save in an individual Roth 401(k) account where your funds will never be taxed again. Before we get into the gritty details of the solo 401(k), be aware that the rules governing these accounts are a bit complex. If you are interested in setting up a solo 401(k) please reach out to us and we will help you determine if you qualify for one and how much you can contribute on an annual basis. Qualifications To qualify for a solo 401(k) you need to operate either a sole-proprietorship or an incorporated business and have no full-time employees other than your spouse. A full-time employee refers to any employee over 21 years of age who works 1,000 hours or more annually. You can utilize the solo 401(k) if you have part-time employees or independent contractors. One advantage of the solo 401(k) over a traditional 401(k) is that as the business owner you are considered both the employer and the employee. This allows you to make employer contributions to your account on top of your traditional deferrals or Roth contributions. The employer contributions cannot be made to a Roth account. They must be made to the traditional 401(k), so they will be tax-deferred when they are made and taxable when you withdraw them in retirement. Contribution Limits Employee Contribution Limits: As the employee of your business you can contribute up to $20,500 ($27,000 if you are over 50) or 100% of your “earned income,” whichever is less. If you are a sole-proprietorship or a single-member LLC your “earned income” is the net profit of your business after deducting your business expenses. If your business is a C-Corp or S-Corp your “earned income” would be the amount of your W2 wages. Employer Contribution Limits: As the employer you can also contribute an additional 25% of your adjusted earned income. If you are a sole-proprietorship or a single-member LLC the formula to calculate your allowed employer contributions is a bit more complicated but works out to roughly 18.5% of your net profits. If your business is a C-Corp or S-Corp your allowed employer contributions are 25% of your W2 wages. Combined Annual Limits: For 2022 the combined limit on employee and employer contributions is $61,000 ($67,500 if you are over age 50). This means if you contribute the full $20,500 as an employee the most you can contribute as the employer for 2022 is $40,500 regardless of how much earned income you have. Summary With the potential to put away up to $67,500 per year towards your retirement, the solo 401(k) is a powerful tool to help you prepare for your future. While 401(k) plans have historically been very costly to set up and maintain, increased popularity has significantly reduced the administration costs in recent years. If you are interested in setting up a solo 401(k) for your business, we would be happy to direct you on how to get started. Previous Article Next Article

Our observations on how the Tax Cuts and Jobs Act actually impacted our clients in 2018. 1 2 The Tax Cuts and Jobs Act that was enacted by congress last year was the biggest change to the tax code our country has seen in 30 years. We have talked about how the changes would impact you, our clients in past correspondence; so we thought it might be helpful to share our perspective now that the first tax season under the new laws is behind us. Comparing our client’s 2017 and 2018 tax returns, here are our main observations on how Monotelo clients’ returns changed from 2017 to 2018: Average income increased 4% from 2017 to 2018 Total taxes paid decreased by an average $564 per return filed The average effective tax rate decreased from 11.09% to 10.42% Federal refunds on average decreased $1,729 What’s most notable about the data we just shared is the fact that the lion’s share of our clients paid less income tax in 2018 than they paid in 2017 (and that includes the fact that you made more money in 2018), yet you received a smaller refund around tax time. People often assume that a smaller refund means the government is keeping more of your money, but that assumption would be wrong. Your tax refund is simply the difference between what you paid to the government throughout the year and what you should have paid. A tax refund is a good metric for how accurate your tax payments were, but not a good metric for how much you actually paid in taxes. Despite lower refunds, our clients actually paid $564 less in taxes than they did in 2017, while they made more money. With the average effective tax rate (actual taxes paid as a percentage of total income received) dropping from 11.09% to 10.42%, the biggest factor was the new tax brackets. Many taxpayers who were previously in the 15% or 25% brackets moved into the 12% or 22% brackets after the tax reform. If our clients payed a lower percentage of their income in taxes, and payed a lower dollar amount in taxes, then why was there such a significant drop in the average refund amount from the prior year? The primary factor that contributed to the lower refunds is the changes that were made to the withholding tables that calculate the federal tax to withhold from your paychecks. The main reason people were receiving larger tax refunds in prior years was due to the fact that the withholding tables were skewed to put more money in the hands of the government over the course of the year. The prior withholding tables did not properly account for the various deductions that taxpayers could take on their returns, and simply assumed that the taxpayer would be taking the standard deduction. With the standard deduction increasing significantly in 2018, a larger percentage of taxpayers utilized the standard deduction, and did not itemize. This single change caused the withholding tables to more accurately calculate the correct amount of federal withholding, and put more money into the pockets of taxpayers throughout the year. Lower withholding means more money in each paycheck. On average our clients had $2,300 fewer dollars taken out of their checks in 2018 than they did in 2017. The bad news is that some people were relying on the larger refunds, and didn’t realize that their raise came in each check they collected throughout the year. Takeaways Overall, our clients faired pretty well under the Tax Cuts and Jobs Act. The majority of our clients paid a lower percentage of their income in taxes. For those who paid significantly more tax in 2018 than they paid in 2017, it was usually due to a large increase in income. While most taxpayers received lower refunds than prior years, this was largely due to decreases in their federal withholdings, not because they had a larger tax bill to pay. As we approach the midpoint of 2019, now is a great time to review the tax withholdings from your paycheck to ensure you do not owe at the end of the year. If you are concerned about owing on your 2019 tax return or would like an idea of what refund you can expect next year, give us a call and we can provide you with some guidance. THE IMPACT of the Tax Cuts and Jobs Act Read more articles 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.

President Trump is promoting his tax reform as a tax break for the middle class. We conducted an analysis to see how this reform would impact our clients. HOW COULD THE PROPOSED TAX REFORM AFFECT YOU? President Trump announced his proposal for tax reform last month. Similar to the changes he was proposing last year while on the campaign trail, this plan is being promoted as a tax break for the middle class. Hoping this might be true, we ran some analysis to see how the proposed changes would affect you, our clients. A typical Monotelo client is a married couple with one child making $115,000 per year. Experts differ on how much you have to earn to fall into this camp, but a wider definition would simply exclude the poorest 20% and the wealthiest 20% of earners. If you accept the definition of the middle class as the "middle 60%," that would describe families making between $50,000 and $140,000 per year. So we feel that our typical client fits pretty well into the middle class. Our analysis showed that the proposed changes would negatively impact 80% of our clients by causing a significant tax increase to our families. The average increase would be an additional $2,300 in federal income taxes paid to the government. It should also be noted that we had to make a few assumptions to conduct the analysis, as various aspects of the plan have yet to be finalized. CHANGES AFFECTING OUR CLIENTS So why is a proposal that is intended to lower taxes for the middle class actually raising them for our small cohort of taxpayers? We have highlighted a few of the proposed changes below: ITEMIZED DEDUCTIONS AND THE STANDARD DEDUCTION One of the biggest promises of this plan is the nearly doubling of the standard deduction to $12,000 for single filers and $24,000 for married filers. While this means a bigger deduction for those who claim the standard deduction, the plan would hinder those who choose to itemize their deductions by eliminating the lions' share of these tax breaks, including deductions for state and local taxes, real estate taxes, and job-related expenses. This means that a majority of our clients will now no longer be able to itemize and will instead need to rely on the standard deduction. EXEMPTIONS AND THE CHILD TAX CREDIT The current tax code provides an additional deduction of $4,050 for the filer, spouse, and each dependent listed on the return. This "Personal Exemption" deduction would be eliminated altogether under the proposed reform. To help mitigate the loss of this deduction, the proposal would increase the child tax credit from its current maximum of $1000 per child. Although the exact amount of the increase has yet to be announced, most estimates predict an increase of $500. While this would lessen the blow of the lost exemptions, it would not fully offset the tax increase for most individuals. TAX BRACKETS Currently there are 7 tax brackets, with 10% being the lowest and 39.6% being the highest. Under the proposed model the brackets would be simplified to 12%, 25% and 35%. While the income ranges for these new brackets have not been specified, it is likely that the 12% bracket would replace the current 10% and 15% brackets, with the 25% bracket being extended to a higher income range. These simplified brackets are unlikely to make a material difference for anyone currently at or below the 25% bracket. The largest difference for individuals in this range will be the changes to itemized deductions and personal exemptions. IT REMAINS TO BE SEEN what aspects of this plan will actually become law, but in the meantime you should be aware of the possible ramifications if it goes through in its current form. If the plan gets passed as it is currently proposed, we expect four cohorts of taxpayers to be negatively impacted: Families with two or more children who own their home Taxpayers who have a significant mortgage payment Taxpayers in high income tax states like New York and California Generous taxpayers who give a meaningful portion of their income to charity If you are in this category, then tax planning may be a necessary component of your future plans..... 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.

Making the most of your itemized deductions under the Tax Cuts and Jobs Act. Save as PDF Read more articles Share 1 2 HOW TO SAVE Summary One of the goals of the tax reform was to simplify the filing process. While this goal may have been achieved for some taxpayers, maximizing your tax deductions in 2018 requires more creativity and critical planning than ever before. With the increased standard deduction and the additional restrictions on itemized deductions, the actual tax benefit of many expenses has been greatly reduced. By implementing some of the strategies discussed in this article you can continue to realize meaningful tax savings from these expenses. MAXIMIZING YOUR DEDUCTIONS IN LIGHT OF TAX REFORM The Tax Cuts and Jobs act of 2017 signaled the largest tax reform in decades. The law includes numerous changes to both personal and corporate taxes. We discussed the most important changes relevant to you a few months ago in Five Changes to Be Aware of Under the 2018 Tax Reform . One of the most promoted aspects of this plan was the doubling of the standard deduction to $24,000 for joint filers and $12,000 for single filers. While this may provide additional tax savings and simplify filing for some taxpayers, it also reduces the potential tax savings provided by certain expenses such as medical expenses, charitable donations, or home mortgage interest. As a result of these changes, certain tax strategies are more valuable than ever to make the most of your expenses. Health Savings Accounts Medical expenses have always had a high threshold to meet before they will provide a tax benefit. Generally, medical expenses can only be deducted when they exceed 10% of your adjusted gross income(this was temporarily reduced to 7.5% for 2017 and 2018), and even then only the portion that exceeds that threshold can be deducted. This means that if you earn $100,000 and you have $12,000 in medical expenses you will only be able to deduct $2,000. With the increased standard deduction, you will have a harder time taking advantage of your medical expenses even when you manage to exceed the 10% threshold. The best way to bypass these heavy requirements for medical expenses is to set up a Health Savings Account. An HSA allows you to save up to $7,000 per year for medical expenses and deduct the full amount, without worrying about the 10% threshold or itemizing deductions. For more information on HSAs you can read Avoiding the 10% Threshold for Medical Expenses . Charitable Contributions If you make significant charitable contributions each year you may want to consider setting up a donor-advised fund to maximize your tax benefits. A donor-advised fund is a separate account that you make contributions to and then distribute those funds to the charity of your choice. How does this help you with your taxes? With a donor-advised fund you receive the tax deduction when you contribute to the fund, not when you make distributions to charitable organizations. This allows you to maximize your deduction by contributing a large amount to the fund in one year and spreading the distributions over 2 or more years. By properly staggering your contributions to the fund you can avoid the limitations on your deduction created by the increased standard deduction. For more information on how a donor-advised fund could reduce your taxes please contact us. Home Office Deduction If you run your own business or if you own rental property then you may be eligible to take a deduction for a home office. This will allow you to deduct a portion of your mortgage interest, real estate taxes, utilities and home-owners insurance. While this deduction is not new for 2018, the potential benefits it provides are greater than ever due to the increased standard deduction likely limiting the benefits of itemizing your mortgage interest and real estate taxes as a personal deduction. For more information on the home office deduction you can read Unlocking the Missed Deductions of a Home Office . 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.

At Monotelo Advisors we work hard to free up cash flow by helping you minimize your federal tax liability, giving you more money to reinvest into your future. TAX EXPERTISE Monotelo believes there is a better way to help you secure your financial future. It starts by improving your cash flow, then focusing on the budget and retirement savings to help you take charge of a future filled with peace and financial security. Our mission is to make a difference with meaningful and actionable financial solutions that positively impact our client's lives. We do this by integrating the tax component into all our discussions - freeing up cash flow that allows our clients to live the lives they want to live. SMALL BUSINESS OWNERS If you are a small-business owner, there is a high probability that you are paying more tax than what is required. And the key to lowering your tax bill is not in finding a competent CPA to file your tax returns, it's in finding an expert with a disciplined process to help you plan your future. LEARN MORE REAL ESTATE AGENTS As a real-estate agent you are uniquely positioned to manage how much you pay in taxes. While the new tax code just made things better for you, it made things significantly more complicated. How you organize your affairs and structure your business will have a direct impact on your tax bill come April 15th. LEARN MORE PRIVATE CLIENTS LEARN MORE INDIVIDUALS Click here to access the tools and articles designed to help you manage your taxes and your finances while giving you confidence to take the steps needed to prepare for a future filled with peace, hope and financial security. LEARN MORE

The purpose of this update is to provide clarity on the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was passed by Congress and President Trump last week. The Act was intended to provide relief to those suffering from the economic fallout of the Coronavirus. The amount of money each person will receive from the federal government will vary depending on your income, marital status and number of children. Individuals are eligible for up to $1,200 - plus $500 per child under the age of 17 Couples are eligible for up to $2,400 - plus $500 per child under the age of 17 Payments phase out for individuals with adjusted gross incomes of more than $75,000 and for couples with incomes above $150,000. The phaseout will reduce the payment by $5 for every additional $100 of adjusted gross income above your phase-out threshold. Individuals making more than $99,000 will not receive anything. Couples making more than $198,000 will not receive anything. Income will be based on your 2019 or 2018 tax return. The White House hopes to begin distributing cash quickly, but said that it may take a few weeks before the majority of the payments go out. The stimulus checks will be handled by the Internal Revenue Service, and they require you to have filed your taxes electronically to have the money transferred to your bank account via direct deposit. If the IRS does not have your bank account info, it will send out a check to the physical address that was on your last tax return. If you have filed a paper copy of your taxes or have closed the bank account used to receive previous tax refunds, the government will send a check in the mail. If you have moved since you last filed your taxes, remember to submit a change of address form with the IRS. This normally takes four to six weeks to process, and the IRS needs the correct address in order to have the check reach the correct destination. The best way to maximize your payment from the government is to have Monotelo prepare your 2019 tax return. If you made less money in 2019 than you made in 2018, we will file the return immediately. If you made more money in 2019 than you made in 2018, we will wait to file the return. However, there is no way to know this without completing the preparation of your 2019 tax return. Once the return is complete, we will let you know what filing schedule is in your best interest. Taxpayers are supposed to receive a note in the mail informing them of how the payment was made. This notice should arrive no more than a few weeks after the money was disbursed. If you have trouble locating your payment, there will be information regarding how to contact the IRS in the notice. Please reach out to us if we can assist you during these challenging times. ECONOMIC IMPACT PAYMENTS FROM THE CARES ACT Read more articles 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.