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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.

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The SECURE Act was signed into law by President Trump in December and went into effect on January 1st of this year. The new law was intended to expand opportunities for individuals to increase their retirement savings, but also brings about some significant changes to retirement and financial planning. Here are the two most important changes along with six notable provisions that you should know about regarding the SECURE Act: 1) Increased Access to Retirement Plans for Small Business Owners and 2) The Elimination of the Stretch IRA. 1. Increased Access To Retirement Plans For Small Business Owners: The SECURE Act expands the ability for small businesses to offer retirement plans because it allows small-businesses to pool resources with other small businesses to offer 401(k) plans at lower costs. This piece of the legislation could help more small businesses take advantage of employer-sponsored plans. This is good policy. If you are a small business owner, we encourage you to reach out to us to see how this may affect your business. 2. Elimination Of The Stretch IRA: One of the biggest changes from the Secure Act comes from the elimination of the “stretch” IRA on inherited retirement accounts. This means that younger beneficiaries can no longer stretch the distributions over their lifetime, but now must distribute the entire account within 10 years of the account owner’s death. This does not apply to spouses who inherit their deceased spouse’s IRA or minor children of a deceased account owner. The elimination of the stretch provision presents significant changes, including the need to review current estate plans to avoid unintended consequences. This change may require you to look at other options for giving retirement accounts to your beneficiaries. Roth Conversions, life insurance and charitable trusts may now look a lot more attractive in light of the new laws. In addition to what we just shared, there are six notable provisions from the new law: 1. Age Limit Removed For IRA Contributions: There is no longer an age cap on contributions to a traditional IRA. Before the SECURE Act, there was an age cap of 70 ½ for contributing to a traditional IRA. Individuals who continue to work can now continue to save for retirement in an IRA, regardless of their age, as long as they have earned income. 2. Required Minimum Distribution (RMD) Age Extended to 72: The SECURE Act delays RMDs from retirement accounts until age 72 (up from 70½). Anyone who is over 70½ must continue taking RMDs. For those under 70 ½. this extension basically means that investors have a longer time horizon to keep their investments tax-deferred in their IRAs… and this has direct implications on how you should be investing your taxable assets to produce income in retirement. 3. Penalty-Free Withdrawals For New Parents: The SECURE Act now allows new parents to pull up to $5,000 from their retirement plans penalty-free, if they do it within a year of the birth of a child or adoption. Income taxes will still apply to any withdrawals from a traditional retirement account, but this provision allows new parents to pull money from their retirement plan to pay for some of those first-year child expenses and not incur any penalties. 4. Student Loan Repayment Through 529 Savings Plans: Individuals can now withdraw up to $10,000 from 529 savings plans to make student loan payments. This is a small step forward in helping Americans manage the growing costs of college education by empowering the 529 plan with one more tool to help students. 5. Retirement Plan Conversion To A Lifetime Annuity: Retirement accounts can now be converted to a lifetime annuity. Essentially, this piece of the legislation gives investors the ability to lay off their longevity risk onto an insurance company who will gladly take on that risk for a healthy annual premium that they collect from investors. This is good in that it gives investors another option, but it also puts them at risk of being taken advantage of by insurance companies. 6. Lifetime Income Disclosure For Defined Contribution Plans: Employers are now required to disclose to employees the amount of sustainable monthly income their balance could support in their 401(k) statements. This is not a big deal, but it could be a helpful resource for investors as they look for guidance on how to prepare for retirement. If you take away anything from this article, take away this: The Secure Act has essentially pushed you to review your retirement and estate plans to make sure they take advantage of the good provisions of the new law while employing strategies to mitigate the bad provisions of the new law. If you have additional questions, or need help putting together a holistic plan that takes the Secure Act into account, please reach out to Monotelo Advisors at 800-961-0298. WHAT YOU SHOULD KNOW About The SECURE 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.

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 2025 Tax Return Tax Season Resources Social Security Changes for 2026: A Complete Guide for Retirees and Working Beneficiaries Jan 15 4 min read Key Tax Season Deadlines for Monotelo Small Business Clients in 2026 Jan 13 2 min read Important Tax Dates for Small Businesses in 2026 Jan 8 3 min read Social Security Changes for 2026: A Complete Guide for Retirees and Working Beneficiaries Key Tax Season Deadlines for Monotelo Small Business Clients in 2026 Important Tax Dates for Small Businesses in 2026 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

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.

How to Save for Your Child Education Year-end Review of Your Retirement Accounts Will VS Trust: Which is Right for You Beware of Hedge Fund Managers Bearing Gifts The Fallacy of the Formula Five Things That Every IRA Owner Should Know Roth vs Traditional IRA: Which One Is Right For You Six Myths About Health Savings Account RETIREMENT ARTICLES Avoid the Hidden Traps of Retirement Plan Loans 5 Things You Can Do Right Now to Help Improve Your Retirement Years Financial Planning & Long-Term Tax Reduction in Light of the Tax Cuts and Jobs Act Profiting From the Failure of Active Managers Overcoming Our Cognitive Biases Our Planning Process We are always researching for tax tips and strategies that our clients can implement to lower their tax liability and improve their financial position. See below for a few simple tips that can be applied to your individual situation. Avoiding the 10% Threshold for Medical Expenses

When planning your vacation be sure to familiarize yourself with the business travel rules to see if you can qualify some of your costs as business expenses. HOW TO DEDUCT YOUR VACATION TRAVEL As A Business Expense Taking a vacation can be expensive, so naturally the idea of deducting your vacation expenses on your tax return is an appealing idea. However, before you get carried away planning a lavish vacation with the hopes of writing off the entire cost, make sure to familiarize yourself with the requirements to qualify your expenses as business travel. To qualify for a tax deduction the trip needs to serve a legitimate business purpose. Handing out business cards on the beach does not count. There are 5 criteria your trip must meet to be a qualified business expense: 1. Profit motive. The trip must serve a legitimate profit motive. This means that you can reasonably expect the trip to create profit either now or at some point in the future. 2. Stay overnight. You can only deduct meal and lodging expenses when you are away from home overnight. 3. “Rational Businessperson” test. Your trip will only qualify as a business expense if the business motive is strong enough that a rational businessperson would make the trip if business was the only motive. 4. Primary purpose test. You can only deduct your travel expenses when your trip is primarily for business. This is determined by calculating the number of business days vs personal days of the trip. This may sound like a deal breaker, but it is easier to meet this requirement than you think. 5. Maintain good records. If you do not properly document the business purpose of your trip, your travel expenses, or your actual business activities on the trip you will risk losing your entire deduction. Your trip expenses can be broken down into two general categories with different requirements to be deductible: Transportation Expenses Transportation costs include airfare, train tickets, or the cost of a rental car to get to your destination. These expenses are all-or-nothing, if the majority of your trip days are business days you can deduct all of your transportation costs. If the majority of your trip days are personal you cannot deduct any of these costs. Life Expenses Life expenses include your daily meals and lodging. Unlike transportation expenses you do not need to meet the majority of business days threshold to take life expenses. Instead you simply take the life expenses for each business day of the trip. What Counts as a Business Day? It may be easier than you think to qualify most of your trip as business days. Each day of the trip only needs to meet one of these criteria to qualify as a business day: Work more than four hours. You have a workday when you spend more than half of normal work hours pursuing business. Since a normal workday is eight hours you only need to work for more than four. Presence-required day. If you are required to be at a destination on a specific day for a legitimate business purpose. For example, if you have a meeting with a client in another city on Tuesday, then Tuesday qualifies as a business day even if that is your only business activity for that day. Travel day. Days you spend traveling to or from your business destination count as business days as long as you are traveling in a reasonably direct route. Weekends and holidays. If a weekend or holiday falls in between two business days you can count those days as business days as long as it would not be practical to return home in between the two business days. If you live in California and have meetings in New York on Friday and Monday, it would not be practical to return to California for the weekend. Therefore, all four days count as business days. Saved-money-on-travel days. If you arrive at a destination a day early or leave a day late in order to save on your travel expenses you can count the extra day as a business expense as it served a legitimate business purpose of reducing your travel costs. Summary The rules governing business travel allow for some freedom to deduct vacation time as business expenses, but do not provide a blank check to write off an entire vacation simply because you spent a few minutes discussing business. You need to find the right balance between work and relaxation, properly document your work activities, and maintain records of all your expenses.

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Frequently Asked Questions Monotelo Quarterly Tax Tips White Papers How To Avoid An Audit Do you have a PTN? EAs and CPAs What is your tax background? What records? Fees File electronically What if I get audited? Who will sign my return? When will I receive a copy of my return? How do I find you? Do you have a PTIN (preparer tax identification number)? What is your tax background? What records and other documentation will you need from me? How do you determine your fees? Can I file electronically? What happens if I get audited? Who will sign my return? When will I receive a copy of my return? How do I find you if I have a question or a problem after tax season is over? Do you have a PTIN (preparer tax identification number)? All of our tax preparers and client-facing staff who are involved in the return preparation process have their PTINS. Feel free to ask for the PTIN of any staff member involved in return preparation. What is your tax background? Most of our tax preparers are either CPA's or Enrolled Agents. A Certified Public Accountant (CPA) is certified by the state to act as a public accountant. A CPA is the only licensed qualification in accounting. To be certified, candidates are required to pass an exam. Most states also require an ethics exam or course as well as continuing education credits. A CPA may specialize in tax but not necessarily: there's a wide range of CPA services including accounting, auditing, financial planning, technology consulting and business valuation. An Enrolled Agent (EA) has earned the privilege of representing taxpayers before the Internal Revenue Service by passing a three-part comprehensive IRS exam. The EA status is the highest credential the IRS awards. EA's must adhere to ethical standards and complete 72 hours of continuing education courses every three years. What records and other documentation will you need from me? We will need all your W-2's, 1099's, 1098's and other verification of income and expenses in order to prepare your return. We do not need individual receipts. Please do not send any individual receipts unless we request them. You must retain all your receipts in case of an audit by the IRS. How do you determine your fees? Our fees are completely transparent - you can view our fees on our Fee Schedule . Can I file electronically? Yes, after your return is completed, you will receive E-file consent forms (Form 8879) and be given the option to have us electronically file on your behalf after you review and approve the return. What happens if I get audited? As Enrolled Agents and Certified Public Accountants, we are authorized to represent our clients before the Internal Revenue Service. We can respond to questions and represent you in front of the IRS. If there is an error on your return and it is our fault, we will fix the error, file an amended return on your behalf and you will not be charged for any amended return preparation fees. Who will sign my return? Your tax return will be signed by the person who performs the final review of your return. This person will have a PTIN and the PTIN will appear next to their signature. We can give you the name of the person who will be reviewing and signing your return at the time we receive your tax documents. When will I receive a copy of my return? You will receive a complete copy of your return after we finish preparing the return and the tax preparation fees have been paid. You can choose to receive an electronic copy, a physical copy or both. You will need a copy of your return to review it prior to filing or having us E-file on your behalf. How do I find you if I have a question or a problem after tax season is over? Our offices are open twelve months a year. If you receive a request from the IRS or your state department of revenue, we are available to meet in person, or connect by phone or email. Click Here to check out the IRS website for more resources in choosing a tax preparation firm

When planning your vacation be sure to familiarize yourself with the business travel rules to see if you can qualify some of your costs as business expenses. October 2018 MONOTELO QUARTERLY Quarterly: Oct 17 HOW TO DEDUCT YOUR VACATION TRAVEL AS A BUSINESS EXPENSE Taking a vacation can be expensive, so naturally the idea of deducting your vacation expenses on your tax return is an appealing idea. However, before you get carried away planning a lavish vacation with the hopes of writing off the entire cost, make sure to familiarize yourself with the requirements to qualify your expenses as business travel. To qualify for a tax deduction the trip needs to serve a legitimate business purpose. Handing out business cards on the beach does not count. There are 5 criteria your trip must meet to be a qualified business expense: Profit motive. The trip must serve a legitimate profit motive. This means that you can reasonably expect the trip to create profit either now or at some point in the future. Stay overnight . You can only deduct meal and lodging expenses when you are away from home overnight. “Rational Businessperson” test. Your trip will only qualify as a business expense if the business motive is strong enough that a rational businessperson would make the trip if business was the only motive. Primary purpose test. You can only deduct your travel expenses when your trip is primarily for business. This is determined by calculating the number of business days vs personal days of the trip. This may sound like a deal breaker, but it is easier to meet this requirement than you think. Maintain good records. If you do not properly document the business purpose of your trip, your travel expenses, or your actual business activities on the trip you will risk losing your entire deduction. Your trip expenses can be broken down into two general categories with different requirements to be deductible: Transportation Expenses Transportation costs include airfare, train tickets, or the cost of a rental car to get to your destination. These expenses are all-or-nothing, if the majority of your trip days are business days you can deduct all of your transportation costs. If the majority of your trip days are personal you cannot deduct any of these costs. Life Expenses Life expenses include your daily meals and lodging. Unlike transportation expenses you do not need to meet the majority of business days threshold to take life expenses. Instead you simply take the life expenses for each business day of the trip. What Counts as a Business Day? It may be easier than you think to qualify most of your trip as business days. Each day of the trip only needs to meet one of these criteria to qualify as a business day: Work more than four hours. You have a workday when you spend more than half of normal work hours pursuing business. Since a normal workday is eight hours you only need to work for more than four. Presence-required day. If you are required to be at a destination on a specific day for a legitimate business purpose. For example, if you have a meeting with a client in another city on Tuesday, then Tuesday qualifies as a business day even if that is your only business activity for that day. Travel day. Days you spend traveling to or from your business destination count as business days as long as you are traveling in a reasonably direct route. Weekends and holidays. If a weekend or holiday falls in between two business days you can count those days as business days as long as it would not be practical to return home in between the two business days. If you live in California and have meetings in New York on Friday and Monday, it would not be practical to return to California for the weekend. Therefore, all four days count as business days. Saved-money-on-travel days. If you arrive at a destination a day early or leave a day late in order to save on your travel expenses you can count the extra day as a business expense as it served a legitimate business purpose of reducing your travel costs. Summary The rules governing business travel allow for some freedom to deduct vacation time as business expenses, but do not provide a blank check to write off an entire vacation simply because you spent a few minutes discussing business. You need to find the right balance between work and relaxation, properly document your work activities, and maintain records of all your expenses. Previous Article