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(502) 426-0000 ∙ www.Roberts.cpa 201 Townepark Circle, Ste B-1 Louisville, KY 40243 163 Dennis Drive Lexington, KY 40503 STRENGTH IN SMALL Smart Money Monthly The Power of Local Business I’m unsure how this happened, but we’re already in March! March 2025
Like many small-business owners, I had a tough start, but I kept growing and moving forward by concentrating on my clients’ needs and providing them with something of value. If you make customer service your primary goal, everything else will take care of itself. Today, I have three employees and a full schedule, and I’ve never forgotten what it took for me to survive and thrive — one year shy of two decades. Small-business owners enjoy numerous benefits, including making decisions faster (after all, you’re the one making them) and building more personal relationships with customers and clients. Of course, it comes with many challenges, including wearing multiple hats and overseeing everything from payroll to office equipment and supplies. As an owner, I have the same concerns about maintaining cash flow and minimizing tax expenses as my clients. I understand what is necessary to keep a small business afloat, and my experiences inspire my commitment to small-business clients. I know what you go through because I’ve been there myself. I pursued a dream that came true, and it’s a privilege to help others achieve theirs. In addition to assisting clients with completing their filings by next month’s big day, I look forward to helping them prepare for the possible expiration of many provisions within the Tax Cuts and Jobs Act of 2017 (TCJA), which is currently set to take place on Dec. 31. Although an extension and other changes are possible in light of the current political landscape, it is wise to err on the side of caution and prepare for the current deadline. Of course, I will stay on top of changes to the TCJA as they occur, and I urge you to contact me with any questions or concerns. The risks of owning a business can be
Time has a way of getting away from us all, but it really seems to fly when you’re a small-business owner. I’ve always had great respect and appreciation for anyone who decides to strike out independently and go into business for themselves. I’m not alone in feeling this way, as we celebrate National Mom and Pop Business Owners Day on March 29. While major corporations play an essential role in our economy, there’s no denying America was built on mom-and-pop businesses — and they’ve been a significant part of my personal and professional life from the start. Growing up, I watched my father work hard to make his auto parts store successful. His business partner was more of a hands-on parts guy, while my father oversaw the financials. I learned that owning a small business meant more than just selling your products and services — it also meant making sure the numbers made sense and a profit was possible. Numbers always came easy to me, so it wasn’t much of a surprise when I followed in his footsteps. I took my first accounting class during my junior year of high school, and I’ve pursued that interest ever since. In 2006, I followed my father’s footsteps again and became my own boss.
significant but so can the rewards. Whether you launched your small business years ago or have just started, I’m available and ready to help you secure your financial foundation for a prosperous future. —Kevin Roberts
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CRACK THE CODE Benefits and Drawbacks of the Latest College Aid Forms
Other changes include expanding the number and potential size of Pell Grants. The maximum Pell Grant will rise to $8,145 in the 2025–2026 academic year from $7,395 in 2024–2025. While the SAI is calculated based on a student’s family size, income, and assets, eligibility for Pell Grants also considers a family’s financial standing according to federal poverty guidelines. In other changes, the revised FAFSA relies on federal tax information provided by the IRS rather than answers provided by applicants. It also asks fewer than 50 questions, compared with 108 in the previous form. While many people labor over the form’s detailed questions, the most common mistake is not filling out the FAFSA at all. This omission excludes students from eligibility for numerous subsidized loans and grants, scholarships, and other aid from the college or university they attend. Many students wrongly assume they won’t be eligible for aid because they or their parents make too much money or their grades aren’t high enough. Plenty of circumstances can qualify applicants for grants and awards, from being the first in their family to attend college to being in the military, being unemployed, or planning to major in a specific in-demand subject. With numerous sources of financial aid in play, the potential rewards of completing the FAFSA are well worth the time invested!
Applying for college financial aid has been a moving target recently amid changes in federal rules. One new loophole is good news for families, however. For the first time, grandparents can set aside money in tax- sheltered accounts to help pay a grandchild’s college expenses without jeopardizing the student’s eligibility for other financial aid. The benefits could be significant for families planning, saving, and working together toward college-funding goals. The primary tool to qualify for federal aid and other sources of help is the Free Application for Federal Student Aid (FAFSA). The latest version of FAFSA does not require students to report distributions from grandparent-owned 529 college savings plans. In the past, those distributions could reduce a student’s financial aid by half of a grandparent’s contribution. Family members, including grandparents, are playing a growing role in covering soaring college costs. Undergraduate students cannot borrow more than $5,500–$12,500 a year in federal subsidized and unsubsidized loans, depending on their school year and whether they rely on their families. This nearly always falls short of the average annual public university tuition
of $11,000 for in-state students, $24,500 for out-of-state students, and $43,500 for private college students. Parents are shouldering an increasing share; 11% take out federal parent PLUS education loans, borrowing an average of $40,000 per parent as of 2020. Other changes in the FAFSA form have subtler implications for families. The government no longer considers the number of students one family has in college simultaneously to determine eligibility. This is bad news for families with multiple children who want to attend college at the same time. In another change, the latest FAFSA substitutes a new measure, the Student Aid Index (SAI), for the Expected Family Contribution measure used in the past. The SAI ranges from -1500 to 999999, and the lower it is, the greater the likelihood a student will get need-based financial aid. States’ 529 plans, named for Section 529 of the Internal Revenue Code, function like a kind of 401(k) account for education by deferring taxes on investment gains on savings for designated educational purposes. States began to develop these plans in the 1980s to encourage families to save for college, and all states now sponsor some version of a 529 plan.
From History-Maker to Horrific Bomb
THE SHOCKING SEQUEL SLUMP OF ‘JOKER 2’
Released in theaters last October, “Joker: Folie à Deux” was supposed to be the biggest box office hit of 2024. The big-budget sequel to the first R-rated movie in history to earn more than $1 billion in ticket sales, the film boasted two previous Oscar winners in leading roles, a multimillion-dollar marketing budget, and the support of legions of fans who couldn’t wait to experience it. Then, it all went terribly wrong. Here’s why. Reviving a Legend For decades, comic book fans have relished the devilish exploits of Batman’s arch nemesis, The Joker. The onscreen portrayal of The Joker took a grim turn in 2008’s “The Dark Knight,” which saw the late Heath Ledger take the character in a darker and more sinister direction. Eleven years later, actor Joaquin Phoenix upped the ante in “Joker,” a gritty and violent psychological thriller that presented the title character at his most disturbing. Despite its R-rating, the movie resonated deeply with audiences, becoming the first in its genre to surpass $1 billion in ticket sales and scoring Phoenix an Oscar for Best Actor. A sequel was all but inevitable.
Sinking the Ship At first, everything about “Joker: Folie à Deux” appeared to be a home run. Phoenix was back in the title role, and none other than singer Lady Gaga — herself an Oscar winner via the 2018 remake of “A Star Is Born” — was cast as the notorious Harley Quinn. The film was given a $190 million budget, much more than the $55 million committed to producing its predecessor, and Hollywood braced itself for its latest blockbuster. That was, of course, before the reviews came in. Inexplicably, the sequel to one of the darkest films of all time was produced as a musical. This head-scratching move didn't sit well with critics, who swiftly lambasted the production. By the time the movie left theaters, it had earned just over $206 million worldwide — more than 75% lower than the previous film’s sales. Even worse, “Joker: Folie à Deux” lost millions when marketing and other expenses were factored in. Even with its undisputed star power and foundation of success, the film failed miserably by ignoring a simple yet essential rule of Hollywood (and any business): Never mess with a hit formula.
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Inspired by EatingWell.com
Creamy Tortellini Vegetable Soup
INGREDIENTS
• 2 tbsp extra virgin olive oil • 1 cup peeled and chopped carrots • 1 cup chopped yellow onion • 1 tbsp finely chopped garlic • 3 cups reduced-sodium vegetable broth • 1 (15-oz) can (no salt added) diced tomatoes with basil, garlic, and oregano
• 2 tbsp fresh basil, chopped • 1/2 tsp ground pepper • 1/4 tsp plus 1/8 tsp salt • 1 (9-oz) package refrigerated cheese tortellini • 1 (5-oz) package baby spinach • 1 cup heavy cream
Payday Perils THE PITFALLS OF ONLINE PAYDAY LOANS With the economy recovering from inflation and the lingering effects of the COVID-19 pandemic, stretching funds as far as possible has become necessary for many Americans. When bills simply can’t be put off any longer, some individuals may be tempted to use the services of online payday loan companies that can transfer hundreds — perhaps even thousands — of dollars into a user’s bank account with a few keyboard clicks. Unfortunately, these get-cash-fast options often force recipients into more significant debt than imagined. Here are a few reasons you should avoid these online loan options at all costs. Temporary Problem, Terrible Solution Online payday loans initially appear to be a dream come true for people with money trouble. Consumers apply online by providing their banking information, and the company approves them for a specific amount. The money typically arrives within one business day. Although this arrangement is reasonable for someone who can repay the loan in full within a day or two, these companies count on attracting customers who have ongoing financial issues and cannot repay the loan that quickly. Instead, these consumers are saddled with interest rates as high as 800% on these loans, ensuring high returns for lenders on their relatively small investments. Meanwhile, the borrower is suddenly stuck with an amount that could take them months — if not years — to pay back. The average online payday loan recipient needs about 175 days and more than a dozen transactions to pay off their debt. Steer Clear of Tribal Loan Traps Native American tribes operate most online payday loan companies and argue they conduct their business in sovereign territories exempt from state laws. In reality, the legality of online payday loans is murky at best and differs significantly from state to state. Although the Kentucky Department of Financial Institutions states that internet-based lenders are not licensed in our state and thus can’t collect on their loans, a Google search will reveal articles by lending “experts” who insist that such practices are permissible here. Short of hiring an attorney or getting state officials involved, the wisest and easiest way to avoid the pitfalls of these loans is to avoid them altogether.
DIRECTIONS
1. In a large Dutch oven, heat olive oil over medium-high heat. Add carrots and onions and cook for about 5 minutes or until onions are softened. Add garlic and cook for 1 minute or until fragrant. 2. Add broth, tomatoes, fresh basil, pepper, and salt. Bring to a boil, stirring occasionally. Reduce heat to medium, cover, and let simmer for about 5 minutes or until carrots are slightly tender. 3. Stir in tortellini. Cook until pasta is tender. Reduce heat to medium-low. 4. Add baby spinach and cream. Cook until spinach is wilted. Serve and garnish with additional basil if desired.
SUDOKU
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INSIDE THIS ISSUE 1 Independence Ignites Success 2 Loopholes and Pitfalls in College Financial Aid Rules Inside a Stunning Box Office Bust 3 Quick Cash, Quicker Debt Creamy Tortellini Vegetable Soup 4 How the DOL’s Final Rule Protects Retirement Investors
A NEW ERA FOR ERISA The Final Rule Transforms What It Means to Be a Fiduciary
For more than 14 years, the U.S. Department of Labor has been trying to determine a new definition of a "fiduciary" under the Employee Retirement Income Security Act (ERISA). A fiduciary provides investment advice for a fee to employee benefit plans. Under ERISA, someone is a fiduciary if they have control over managing or using a plan’s assets, provide investment advice for a fee, and have responsibility for managing the plan. Since 1975, these discussions were only considered “investment advice” if they adhered to a five-part test. However, this past September, the Department of Labor released new regulations called the Final Rule that redefines what it means to be an investment advice fiduciary. With this recent change, the five-part test goes out the window. The Final Rule expands the
definition of who can be considered a fiduciary. Someone is a fiduciary if they regularly provide investment recommendations and advice to retirement investors for a fee. That advice must be based on the investor’s needs and reflect expert judgment that serves the investor’s best interests. They must also state that they are acting as a fiduciary when giving advice; however, if you’ve previously received one-time advice, that could now be considered fiduciary advice. That’s a lot of information to swallow, and by now, you’re probably wondering how this will affect the average person. In most cases, these changes will only affect those acting as fiduciary advisors and retirement investors, including participants, beneficiaries, IR owners (Ingersoll Rand Inc.), and anyone else involved with an ERISA plan. Through the Final Rule, you should receive better advice that puts your
interests first, providing more transparency about recommendations and any fees involved. It should also create greater accountability for advisers, brokers, insurance agents, and anyone else acting as a fiduciary. All in all, this is a great change for those who interact with fiduciaries. You can rest assured knowing the advice you receive will benefit you and your investments.
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