Now is the perfect time to accelerate generous giving

As if a worldwide pandemic and subsequent recession isn’t difficult enough, the additional peak of a major cultural crisis now has us all searching for ways to best make a difference in this nation.   Affluent investors who want to accelerate their generous giving in response to current events have new incentives to do so, thanks to the CARES Act regulations passed earlier this year.  For those who want to help, but aren’t exactly sure how, a Donor Advised Fund (DAF) offers a flexible alternative to consider.


A DAF is a private fund established and managed by a DAF sponsor (described below) which gives the donor control over future distributions of charitable gifts.  Contributions to DAFs offer tax advantages of up to 60% adjusted gross income (AGI) for cash contributions and up to 30% of AGI for donated appreciated securities.  DAFs can hold funds indefinitely, whereas private funds or family foundations require funds to be distributed within a specific timeframe.

Families often pool contributions into DAFs to pursue family philanthropic objectives.  Gifts of appreciated securities to a DAF receive fair-market value tax deductions without incurring capital gains taxes.  For these reasons and more, the popularity of DAFs has increased over the years, with charitable assets in DAFs expanding to over $121 billion in 2019. In a simple description, a DAF can be considered a charitable investment account, where you get your tax deduction at the time of your contribution, along with flexibility to invest these contributions until you decide when to make a distribution to a charity.


Budros, Ruhlin & Roe’s wealth management strategies take philanthropic planning into consideration.  We don’t tell our clients where to invest, but rather how to invest for greatest tax advantages.  So where can someone get access to a DAF?

Individuals looking to make a charitable impact in this way would seek what is called a DAF sponsor.   There are three, primary types of DAF sponsors: Community Foundations, National Donor Advised Fund Organizations and Public Foundations.

Community Foundations
  • Community Foundations range from faith-based organizations to over 700 community foundations in existence today.  One example is the Columbus Foundation, a long-standing philanthropic advising resource in Ohio that is well-connected to efficient and effective non-profits in our area.  These foundations offer a connection to local charities that are appealing to investors, especially during times of unrest like we are experiencing.
National Donor Advised Fund Organizations
  • National Donor Advised Fund Organizations are typically charitable divisions of for-profit financial organizations, like Schwab, Fidelity and Vanguard.  The American Endowment Foundation or the National Philanthropic Trust are examples of others making up over 30 National Donor Advised Fund Organizations in existence today.
Public Foundations
  • Public foundations and charities typically advance their own charitable missions, focusing on a specific issue, region or population.  They are required to have less than 50% of its funding from a private entity.


The Coronavirus Aid, Relief, and Economic Security (CARES) Act created two tax benefits for non-profit donors. The first allows an “above-the-line” deduction for charitable cash gifts up to $300, if the taxpayer is not itemizing deductions.   Non-profits have long advocated for this benefit, but it does little to provide incentives to increase giving.

The more notable benefit for investors is the increased deduction cap for charitable gifts made with cash.   Current legislation caps the deduction at 60% of AGI.  However, thanks to the CARES Act, investors can now deduct up to 100% of their AGI with charitable cash gifts made in 2020.


Non-profits are facing some of their most challenging days.  Many fundraising events have been postponed or canceled altogether this year. These critical organizations are living in continued uncertainty of income sources and challenges around group gatherings. Now is the perfect time for investors to accelerate generous giving while maximizing the tax incentives of the CARES Act or the flexibility of Donor Advised Funds.  Talk to your wealth manager today about the causes your family supports and the strategies you can utilize to impact people in need.  Your community needs you.


Daniel Due, CFP®, CAP®

Senior Wealth Manager

You’ll be remembered most by your resiliency

Think back on your most vivid memories.  First work experiences. Recent career moves. There’s a high likelihood that some of your most defining moments revolved around a crisis or crossroad in your work or life and how you and the people around you responded.

As a leader, it’s easier to shine in clear skies. When business is in autopilot with all systems in synch, managers oversee operations as to not disrupt the well-oiled machine.  The true test of a leader, however, comes in navigating rough waters.  Leaders rise to the occasion when it’s time to disrupt to impose and manage change in adversity.  You’ll be remembered most by your resiliency.

For these reasons, I’ve been an active learner and subsequent teacher of all things resiliency.  Resilience is defined as the power or ability to return to the original form, position, after being bent, compressed, or stretched; elasticity. The ability to recover readily from illness, depression, adversity, or the like; buoyancy.

In business, I define resilience as the ability to recover quickly and advance forward from hardship, both mentally and physically, so that as leaders we can maintain a high level of performance and focus over extended periods of time.

There are three areas to strengthen in our leadership reserves so that we shine in challenging times: selfcare, delegation and mentorship.


You’ll find truth in the analogy of the airline oxygen mask; to best help others during a flight crisis, you must put the oxygen mask on yourself first.  Good leaders prioritize their mental and physical health as a part of their daily schedules. When it comes to selfcare, the little things add up and do make a difference.

  • Fuel your body properly. Track your actual food intake and reduce sugar and processed foods whenever possible.
  • Get consistent sleep. Try to get on a regular schedule of six to eight hours per night.  Limit your screen time, especially right before bedtime.
  • Move daily. Consider a standing desk, parking further away from the office entrance and taking the stairs.
  • Stay positive with mental recovery. Maintain perspective in processing concerns, uncertainty or fears through journaling, meditation, prayer or some combination.   Focusing on progress and what is going well will reset your approach and reactions.


If leaders insist on being in the minutia, the result will be a logjam of efficiencies and approvals.  Delegating to the smart, skilled leaders under you is critical during times of adversity and for their opportunities for growth and exposure.

  • Define your high-payoff activities (HPAs). It’s important to decide what is worth your focus and attention and what is best managed by other competent leaders.  Do you really need several members of the leadership team in the same meeting, or is this an opportunity for others to step up?
  • Leverage strengths. Pick the areas where you can best guide and coach while empowering others to take the lead in areas that may be a known weakness for you.
  • Be willing to trust. Teams must know that you believe in them to bring recommendations forward and see alternatives from a view you don’t have. Your people will rise to the occasion when you trust them to succeed.  Trust must be built from the top down.



Many of us have excelled in our careers because a leader served as a mentor in our path, guiding us with advice.   The reality is that you never stop learning no matter what position you hold.  When facing challenging times, it’s helpful to have mentors in place as a sounding board.

  • Find your coach. Seek out a person in your industry or city who can meet to give wise counsel and networking suggestions. Good mentors have mentors, good coaches get coached.
  • Develop a personal board. Consider bringing a few people together to give career advice and identify blindspots for advancement.


Corporate America is sailing in unchartered waters today.  Leaders at all levels are having to redirect operations to react to changing environments and global crises in record time.  The ones who will leave a positive legacy will have found balance in selfcare, delegation and mentorship.  I hope you are one of those leaders, shining in resilience.

Scott Rister

President – Budros, Ruhlin & Roe


Federal Student Loan Payment Relief During The Pandemic

The Coronavirus Aid, Relief and Economic Security (CARES) Act was created to provide financial relief for people impacted by COVID-19.  If you have federal student loans, you are eligible for payment relief and 0% interest through the end of September.

Temporary Suspension of Payments

With many suffering job transitions or loss during the pandemic, the CARES Act administrative forbearance, or temporary suspension of federal tuition loan payments, is a tremendous subsidy.  Administrative forbearance will last from March 13, 2020 through September 30, 2020. Any auto payments in place will be suspended automatically during this period.

If you want to continue making payments, contact your loan service provider to opt out of the administrative forbearance. You can also make manual payments by visiting your loan service provider’s website. Since you are not required to make payments during the administrative forbearance, you are able to make payments of less than your minimum payment amount.

During the forbearance period, interest will not accrue, and your credit history will not show the payment lull.

Types of Loans Offering Relief

The CARES Act provisions for federal student loan relief are specific to these types of loans:

  • Direct Loans owned by the US Department of Education
  • Federal Family Education Loans (FFEL) owned by the US Department of Education (DOE)
  • Federal Perkins Loans owned by the US Department of Education
  • Defaulted Health Education Assistance Loans owned by the US Department of Education

It is important to note that CARES Act provisions will not apply to FFEL and Federal Perkins Loans owned by a third-party lender outside of the DOE.

Refinancing Consideration Outside of CARES Act Provisions

If you have private student loans or student loans not owned by the DOE, you can still reduce your interest rate, reduce your payment or some combination of the two.

With current interest rates at or near all-time lows, it is a good time to investigate refinancing your private student loans with a third party like SoFi, Earnest or a handful of other providers.

However, refinancing federal student loans covered by the CARES Act is not needed with 0% interest rates in effect through September 30 and the possibility of relief being extended past September 30. These student loans can always be refinanced separately or refinanced with your private student loans at a later date.

If you are a high-income earner looking for additional guidance in debt management, investment management, tax and estate planning or asset allocation, the advisors at Budros, Ruhlin & Roe are here to help. Student loan repayment should not prevent you from having confidence in building your financial future.  Our GROWwithBRR program can help turn uncertainty into assurance in your wealth strategies.

Kevin Wuebker, CFP®

Senior Wealth Manager


More PPP Legislation Changes, Called The Paycheck Protection Flexibility Act

Yet another round of PPP legislation changes arrived in early June. 

There were a few different pieces of pending legislation circulating to address shortfalls in the existing program. The U.S. Senate recently passed the House bill that would make significant changes to the PPP loan program, called the Paycheck Protection Flexibility Act (“Act”). It is designed to help borrowers by extending the period to spend the funds and allow more spending on non-payroll costs. The end result is likely to increase the probability of forgiveness of the PPP loan.

Here is a summary of the most important changes from the Act:

Extended Covered Period

Borrowers who received a PPP loan prior to enactment of the Act can now choose whether to spend their funds over a covered period of 24 weeks or the original eight weeks. New borrowers will have a 24-week covered period, but the covered period cannot extend beyond December 31, 2020. This obviously gives borrowers more time to spend the funds appropriately, but many borrowers are in the later weeks of the eight-week covered period and have already spent or have plans on spending the funds.

Reduction in Payroll Cost Percentage

The Act reduces the percentage amount a borrower must spend on payroll costs from 75% to 60%. Recall that this percentage requirement initially began with the SBA’s guidance but now it is statutory. More importantly, the 60% requirement appears to be a cliff event for a borrower, meaning that if 60% of the loan proceeds are not spent on payroll costs, then none of the loan will be forgiven. However, it is possible that later guidance or technical corrections may change this result and make it a proportional rate of forgiveness.

New Deadline to Restore Workforce

Previously, borrowers had a safe harbor to restore employee levels or Full Time Equivalents (FTEs) prior to June 30 to avoid any reduction in forgiveness. The Act allows borrowers to use the 24-week covered period (no later than Dec. 31, 2020) to restore their FTEs.

New Exceptions for FTE Reductions

he Act allows a borrower a couple new exceptions from the FTE requirement similar to the previous exceptions regarding voluntary terminations, termination for cause or rejection of a good faith offer to return. The two new exceptions are if the borrower 1) could not find qualified employees or 2) was unable to restore business operations to February 15, 2020 levels due to COVID-19 related operating restrictions.

Loan Terms Extended

Borrowers and their lender can agree to extend the term of the loan from two years to five years. The interest rate remains at 1%. The time when interest and principal begin has be extended until after the forgiveness determination has been made by the lender.

Delay of Employment Taxes

The Cares Act permitted employers to defer half of the employer portion of employment taxes on wages in 2020 until the end of 2021 and 2022. However, the Cares Act prohibited PPP borrowers from benefiting from this deferral. The Act allows PPP borrowers to take advantage of this employment tax deferral.

Obviously, these new provisions will need some additional interpretation resulting in additional guidance. We will continue to keep you informed of any major changes and clarifications. If you have any questions regarding the PPP Loan program, please do not hesitate to contact me or your BRR team.

John Schuman, JD, CFP®, CPA(Inactive)

Chief Planning Officer, Chief Compliance Officer, Co-CEO



Translation of PPP Loan Forgiveness and May 14 Repayment for Business

Businesses desperately needed help keeping their workforce employed during the Coronavirus. In order to quickly get money into the hands of employers to pay employees during the economic shutdown, Congress established the Paycheck Protection Program (PPP) through the CARES Act on March 27. The key component of the PPP was forgivable loans made available through the Small Business Administration (SBA).  Many business owners applied right away, knowing the demand would exceed the supply.

At this point many businesses’ loan have been funded, but business owners are needing additional guidance as to how the forgiveness provisions of these loans will be administered or applied.

Based on recent announcements from the SBA and Treasury questioning a business’s certification that a loan was necessary, business owners may need to reflect and rethink whether they should repay the loan.  The SBA and Treasury have set a deadline for May 14 to repay the loans without any question or penalty of whether or not the loan was a necessary for ongoing operations. The summaries below about loan forgiveness and repayment will help business owners evaluate the best course of action under deadline and provision interpretation.


With the most PPP loan applications in process or completed, the next phase of the program will become loan forgiveness. Here is our current understanding until we get better guidance:

General Rule for Forgiveness

Within the eight weeks following receipt of the loan, employer must use no less than 75% of loan proceeds for payroll costs and 25% for rent, mortgage interest or utilities.

What eight weeks?

The eight-week window begins upon your receipt of the loan proceeds. This can create an awkward situation if this is received in the middle of a payroll cycle. For borrowers who may be impacted beyond eight weeks, this gives them money to make payroll for a time but then they will have to make a difficult decision about employee layoffs later.

75% of the Loan Proceeds Used for Payroll Costs

There are two aspects to this requirement. First, no less than 75% of the loan proceeds must be spent on payroll costs for the employees over the eight-week period. Second, no employee can be paid less than 75% of what he or she was previously paid in the prior regular quarter. This second requirement prevents paying some employees more of their salary to the detriment of other employees.

What are Payroll Costs?

This has been defined as gross payroll. So, it would encompass all of those things that are typically deducted from an employee’s gross payroll such as employee’s share of FICA, income tax withholding, 401k contribution, health insurance, etc. However, payroll costs would not include the employer’s share of FICA. An employer’s match into a 401k plan would be a payroll cost. Remember, that the maximum salary amount for any employee cannot exceed $100,000. However, the other payroll costs associated with that salary can make that amount more than $100,000. Additionally, payroll costs do not include amounts paid to independent contractors.

Use of 25% of Loan Proceeds

The borrower can use 25% of the loan to pay other business expenses, limited to rent, mortgage interest or utilities. The statute indicates that rent also includes “rent under a lease agreement”. It is possible this could include a lease of personal property and not just real estate but need additional guidance. It is important to note that only the interest component of a mortgage payment is counted, not the principal portion. Interest on other outstanding indebtedness is allowed if it’s secured by real or personal property. Utilities are specifically defined to include electric, gas, water, telephone, transportation, internet. All of these items have to be in existence or service began prior to February 15, 2020.

Requirement to Maintain Employee Count

This last forgiveness requirement is separate from previous summarized requirements related to the use of the loan proceeds. This requirement is based on maintaining the number of Full-Time Equivalent Employees (FTEs) for the period prior to February 15, 2020. Generally, it requires that the borrower compare the FTEs prior to February 15, 2020 with the average FTEs per month during the 8-week period of the loan. Ultimately, the borrower must restore any reductions in the FTEs prior to June 30, 2020 to avoid any reduction in loan forgiveness.

The SBA has clarified that an employee who has been laid off is offered to be rehired (on same terms) and refuses to return to work will not impact forgiveness. This overall requirement still needs some additional clarification from the SBA or Treasury. Questions still needing answered include what about normal employee turnover or reduction, what is the significance of the June 30, 2020 date compared to the average monthly FTEs during the eight-months, and what’s the impact of employee layoffs after June 30, 2020?

New Pressure for Repayment of PPP Loan

There have been many new developments and some change of perspective about who these loans were intended to benefit. When these loans were initially rolled out, the Act waived the requirement for borrowers to show that they were unable to obtain credit elsewhere (which is typically required for an SBA loan). The PPP loan application asked that the borrower (and any 20% or more owner) to certify, in good faith, that the “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant”. This certification is subject to certain civil and criminal penalties. The problem is there was no guidance to borrowers about the time frame to consider if the loan is “necessary for ongoing operations”. Is it eight weeks or a longer period of time? There was also no guidance on what makes it “necessary”. Is it more likely than not to be needed or absolutely necessary? Should a borrower consider other current resources or not?

SBA and Treasury’s Repayment Deadline 

On April 23, the SBA and Treasury made it clear that businesses owned by a large company with adequate sources of liquidity likely didn’t make a “good faith” certification as to the necessity for the loan. The guidance went on to state that a borrower, such as a public company with access to liquidity, can repay the loan by May 7, 2020 and will be deemed to have made a certification in good faith. Although this guidance was primarily directed at large or public companies, it left it unclear as to if this same approach applied to private companies. More recently, the SBA and Treasury made it clear that private companies with adequate sources of liquidity also need to consider if they made the certification in good faith and consider repayment of the loan by May 7, 2020.

 Treasury Secretary Steven Mnuchin’s Comments

The media has written many stories about borrowers who took PPP loans and have chosen to repay the loans. On April 28, Mnuchin proclaimed that any company that receives more than $2M of a PPP loan will be subject to an audit or full review before there is any loan forgiveness. Mnuchin went on to express that civil and criminal penalties will be enforced. Shortly thereafter, the SBA made clear that loans less than $2M will be reviewed, “as appropriate” following a borrower’s forgiveness application. Mnuchin targeted private elementary and high schools with large endowments and other resources to repay loans as being not “necessary”.

This new development around who these loans were intended for and focus on a borrower’s financial situation has created significant uncertainty. It would have been prudent to provide upfront guidance to borrowers on what financial impact warrants a loan. Congress expressed financial requirements in other relief provisions. To express a new standard in the middle of the loan program is unfair to borrowers. Although it is also appropriate to make sure that the almost $600 billion loan program is utilized by those who need it the most.

 What Should Borrowers Do?

Obviously, there are a lot of unanswered questions and interpretation issues with regard to PPP loan forgiveness as well as whether the PPP loan was “necessary” to begin with. It is hoped that future guidance that has been promised will provide additional answers and clarity. Until we have more guidance, here are some thoughts on how to consider a decision to repay the loan and best practices to maximize forgiveness.

Should I Repay the Loan?

There is an emphasis on liquidity and payroll. Is the business considered essential or non-essential? It would seem that a non-essential business would have a greater “necessity” but depending on size and access to liquidity maybe not. For essential businesses, you should analyze the businesses financial position at the time of application and throughout the shutdown.

Review and document access to liquidity at the time of application for the loan. Consider cash-on-hand, accounts receivable collectability, available credit facilities, accounts payable and potential deferrals of payments.

Review and document revenue and budget projections at the time of application. Consider impact of lost revenue, lost customers, reduced capacity, change in supply chain and how this impacts your ability to retain employees and payroll.

·         Review and document how you’ve performed against prior years.

·         Document potential risks to the business that would significantly impact liquidity and retention of employees.

·         Ownership and ownership’s access to liquidity.

Best Practices to Maximize Forgiveness

To receive forgiveness, a borrower will need to make application to the SBA. The requirements and disclosures on this application have not been identified. However, this application will likely request not only questions about how the proceeds were utilized, but also investigate and evaluate the borrower’s need for the loan. It will likely be how the SBA will determine which loans under $2m to review.

·         Place loan proceeds in a separate account to better track utilization of proceeds for designated purposes.

·         Use this separate account to pay only those payroll costs and other designated costs.

·         Attempt to rehire and restore FTEs as quickly as possible and no later than June 30.

·         Make sure that each employee is being paid at least 75% of their prior gross wages.

·         Make sure that 75% of loan proceeds are used for payroll costs and no more than 25% of loan proceed are used for other designated expenses

·         Do not make any large capital expenditures with other resources, unless necessary or previously committed.

·         Do not make distributions of profits to ownership with other resources.

·         Do not payoff other outstanding debts or obligations with other resources.

·         Be prepared to document need for the loan.

Wealth management teams at Budros, Ruhlin & Roe are here to help clients interpret the provisions of the PPP and evaluate best next steps. Generally, it would be ideal to get together with your executive team and outside advisors to review your need for the loan and steps to maximize forgiveness. In short, if you don’t believe that you can demonstrate a need for the loan, repay it by the May 7 deadline. If you can demonstrate a need for the loan, be prepared to do so, and then take the steps outlined above to maximize your opportunity for forgiveness.

John Schuman, JD, CFP®, CPA (Inactive)
Chief Planning Officer, Chief Compliance Officer, Co-CEO

An Effective Investment Weapon in an Unpredictable Market Battle

To say the stock market has been volatile lately would be a bit of an understatement.  Consider that in the month of March alone, every trading day but one saw the S&P 500 price index close 1% higher or lower than the day before.  And so far, April has been more of the same.  Given this extreme market volatility, even the most seasoned investors or financial advisors may find themselves asking, “What should I do now?”

Experienced RIAs and clients often turn to the most effective investment weapon in an unpredictable market battle: the Investment Policy Statement.

Don’t go to battle without one

An Investment Policy Statement, or IPS, is a written document, mutually agreed upon by you and your financial advisor that dictates how investment decisions are to be made.  The IPS is the “blueprint” for your portfolio construction and management and should include all the important factors and unique considerations that impact your investment plan.

Ideally, the IPS should clearly state the objective, time horizon and risk/return expectations for your portfolio.  It should establish your strategic asset allocation (as a function of your risk tolerance and goals) and note the various asset classes and asset class percentage targets that will comprise your globally diversified portfolio.

The IPS should determine how often you review your portfolio and how you measure performance. It should also state which accounts or specifically identified assets are subject to exclusion, limitations or restrictions, to eliminate any confusion around the parameters of the managed portfolio.  While a complete IPS may include more details than those noted here, it shouldn’t be much longer than two pages.

The weapon of choice in the emotional investing battle

In times of uncertainty, feelings of anxiety, fear and even panic can take over and easily cloud our investment decision-making.  Alternatively, in good times, feelings of over confidence and greed can do the same.

We often believe we are making logical decisions based on critical thinking, but really, and unbeknownst to us at the time, our emotions are taking over.  It’s not our fault; it’s human nature.  And as such, we’re all subject to our own inherent biases and behaviors based on a lifetime of observations and personal experiences.

While emotions and feelings can and should play a vital role in our daily lives, they have no place when it comes to your investment decisions.  The IPS serves as a barrier to emotional reactions and enforces discipline around your investment decisions in good times and bad.  It helps ensure consistency and clarity around your strategy, eliminates surprises, and keeps your plan in place.

Who is standing shoulder to shoulder with you in battle?

A market like we face today reminds us why every investor should always have a well-developed IPS in place.  No commander wants to develop a strategy after the conflict has already started.  An agreed-upon IPS created with an experienced, battle-tested advisor can prevent you from making decisions that “feel” right at the time, but ultimately could turn out to be significant mistakes; like selling at a market bottom or buying too much of one stock or one sector, for example.

Creating, following, referencing and evolving IPS documents is an invaluable part of the fiduciary process with our clients at Budros, Ruhlin & Roe.  Remember, you can’t control the market and it can be very difficult to control your emotions, but you can control your investment decisions. An IPS is the most effective tool in unpredictable markets.  We stand ready to help you put one in place.

Michael Kline, CFP®

Senior Wealth Manager

CARES Act Translation for Business Owners

Coronavirus, Aid, Relief and Economic Security (CARES) Act

Congress and the President designed provisions of the CARES Act to provide approximately $877 billion of relief to businesses. Since this is the largest relief package in the history of the United States, we wanted to provide a CARES Act translation for business owners. You’ll find the most relevant provisions summarized below to assist in determining applicability to your circumstances.

Key CARES Act provisions for business owners could be instrumental for recovery during our country’s current crisis. There will likely be a combination of relief options for consideration.

Refundable Employee Retention Credit

The CARES Act provides a refundable payroll tax credit to impacted employers who continue to pay employees their wages. The refundable tax credit is equal to 50 percent of the qualified wages paid by an eligible employer to an employee from March 13, 2020 to December 31, 2020. The maximum amount of wages eligible to be considered for the credit is $10,000 per employee.

Eligibility: The employer must have either:

  • Suspended or reduced business operations due to a government order regarding COVID-19; or
  • Sustain a 50% or more decline in gross receipts for the comparable calendar quarter from 2020 to 2019. Once eligible, the employer remains eligible for succeeding quarters until gross receipts during a calendar quarter are 80% or more of the gross receipts in the comparable calendar quarter in the preceding year. The credit is also available to certain tax-exempt organizations.

The credit must be reduced by any credits claimed under the Families First Coronavirus Response Act which provides paid sick leave and paid family and medical leave.

Delay of Employer Payroll Tax Payments

The CARES Act allows employers (and self-employed individuals) to defer payment of the 6.2 percent employer-side Social Security payroll tax, effective for wages paid between the March 13, 2020 and December 31, 2020. Payment ultimately would be due in equal parts on December 31, 2021, and December 31, 2022.

Net Operating Loss Carryback Allowed

The CARES Act allows taxpayers to carry back net operating losses (NOLs) arising in 2018, 2019, and 2020 to the five prior tax years. NOLs incurred in these years can fully offset prior-year taxable income or be carried forward. These provisions change the Tax Cut and Jobs Act (TCJA), which generally eliminated all carrybacks and provided that the NOLs arising in years beginning after December 31, 2017 are only carried forward and deductible against only 80 percent of taxable income.

Enhanced Refundability of Previously Generated AMT Credits

The TCJA repealed the corporate alternative minimum tax (AMT) but continued to allow corporations to recover previously generated AMT credits against regular tax before 2022. The CARES Act generally enables corporations to accelerate any remaining AMT credits they have not yet utilized into 2019.

Enhanced Interest Deductibility

The TCJA generally limited the deduction for business interest expense to business interest income plus a threshold amount of 30 percent of “adjusted taxable income” (a defined term). The CARES Act provides that, for 2019 and 2020, the percentage of adjusted taxable income threshold would be increased from 30 percent to 50 percent. The CARES Act also provides special rules for deductibility of interest expense for partnerships. This provision also allows businesses to use their adjusted taxable income from 2019 in tax year 2020 in order to deduct more interest.

TCJA Technical Correction for Qualified Improvement Property

The TCJA inadvertently failed to define qualified improvement property (i.e. leasehold improvements) as 15-year property for MACRS depreciation purposes resulting in a 39-year depreciation period. The CARES Act corrects this mistake and classifies qualified improvement property as 15-year property and eligible for current law 100 percent bonus depreciation. This correction is retroactive to the effective date of the TCJA, so a refund could be claimed for property placed in service dating back to 2018.

Modification of Charitable Limitations

The CARES Act increases a corporation’s limitation on charitable deductions for 2020 from 10 percent to 25 percent of the corporation’s taxable income. This provision applies only to cash donations and is not applicable to donations to a donor-advised fund.

Extension of Plan Funding Deadlines

Employer sponsors of qualified defined benefit plans can postpone the funding of any plan contributions with a due date in 2020 until January 1, 2021.

Small Business Loans Through the Paycheck Protection Program

The CARES Act, utilizing the Small Business Administration (SBA), creates a loan program to assist small businesses and nonprofits with payroll support (including paid sick and medical leave), mortgage payments, lease payments, insurance premiums, interest payments and utility payments.

Eligibility: To be eligible, the business must:

  • have less than 500 employees;
  • have been operational on February 15, 2020;
  • have employees (or independent contractors) to whom it paid wages;
  • have been substantially impacted by COVID-19 (not defined).

Loan Amounts and Terms: The loan amounts are 2.5 times the business’s average monthly payroll costs (including medical and retirement benefits) for the trailing 12 months. The maximum loan amount is limited to $10 million. However, it seems that these payroll costs do not include the compensation paid to an employee (or an independent contractor) who made in excess of $100,000 during the 12-month period.

The terms of the loan are very favorable and include:

  • Interest not to exceed 4%;
  • Term up to 10 years;
  • Deferred interest and principal of up to 6-12 months;
  • No personal guarantee;
  • No collateral;
  • Origination fees reimbursed by SBA;
  • No prepayment penalty.

Potential Forgiveness: Principal can be forgiven in an amount equal to the payroll costs, mortgage payments, lease payments and utilities incurred from February 15, 2020 through June 30, 2020 for. Any amounts forgiven will be reduced proportionately by any reduction in the number of employees retained compared to the prior year and reduced by the reduction in pay of any employee beyond 25 percent of their prior year compensation. Employers that re-hire previously laid off employees will not be penalized for having a reduced payroll at the beginning of the period. Most importantly, any forgiven indebtedness will not be taxable income to the employer.

The Paycheck Protection Program has a lot of uncertainties and many provisions require greater clarity. This program looks to get cash into the hands of businesses quickly, so clarifications should be available soon. It’s also being administered by retail banks, so they also may have different interpretation of how to implement this program.


We hope this CARES Act translation for business owners will be beneficial to your company. If you need further clarification about any of these provisions, please don’t hesitate to reach the wealth managers of Budros, Ruhlin & Roe.

John Schuman

Co-CEO and Chief Planning Officer

CARES Act Translation for Individuals

Coronavirus, Aid, Relief and Economic Security (CARES) Act

Congress and the President passed the largest relief package in the history of the United States into law, estimated to cost over $2 trillion. Given the breadth of the relief provisions, we thought it important to provide a CARES Act translation for individual taxpayers. There is approximately $560 billion of relief available to individual taxpayers.

Direct Cash Relief

The CARES Act provides direct cash relief to individuals in the form of “recovery rebate” checks issued through the IRS with base amounts of $1,200 for single taxpayers and $2,400 for joint filers. Those amounts increase by $500 for every qualifying child. A qualifying child is a dependent of the taxpayer who is under age 17, including a son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them.

These relief amounts begin to phase out when adjusted gross income (AGI) exceeds $75,000 for single taxpayers and $150,000 for joint filers. Payments are reduced by $5 for each $100 by which a taxpayer’s AGI exceeds the phase-out threshold, and relief phases out completely when a taxpayer’s AGI exceeds $99,000 (for single filers) or $198,000 (for joint returns).

A taxpayer’s AGI for the phase-out calculation would be based on a taxpayer’s 2019 federal income tax return if it has been filed. If a 2019 return has not been filed, AGI would be based on the taxpayer’s filed 2018 return.

Increased Access to Retirement Funds

Withdrawals: The CARES Act waives the 10 percent early withdrawal penalty (those under 59½) for distributions of up to $100,000 from qualified retirement plans to cover emergency expenses related to the coronavirus.  Income tax on the distributions is payable over three years, and withdrawn amounts can be recontributed within three years.

Loans: The CARES Act allows participants to take plan loans during the 180-day period beginning on the date of enactment and up to $100,000 or 100% of the account balance. Typically, plan loans are limited to $50,000 or 50% of the account balance. The loan can be repaid over six years, instead of the typical five years.

To be eligible for withdrawal or loan relief, an individual must be:

  • Diagnosed with COVID-19;
  • Have a spouse or dependent diagnosed with COVID-19; or
  • Experiencing financial hardship as a result of being quarantined, furloughed, or laid off; a reduction in work hours; inability to work due to lack of child care due to COVID-19; the closing or reduction in hours of a business owned or operated by the individual due to COVID-19; or other factors as determined by the Treasury Secretary.

Suspension of Required Minimum Distributions

The CARES Act suspends all required minimum distributions from IRAs, annuities under 403(a) and 403(b), retirement accounts for 2020. This applies to plan participants as well as beneficiaries of an inherited account. In addition, the year 2020 doesn’t count for any distribution requirement subject to a five-year payout.

Extension of IRA Contribution Deadline

Although not part of the CARES Act, it’s worth reminding that the IRS has extended the due date for any contributions to an IRA until July 15, 2020. It is implied that this extension applies to all various forms of IRAs, including Roth, SEP and simple IRAs.

Expanded Rules for Charitable Deductions

For 2020, the CARES Act temporarily eliminates the current 50% of AGI limitation on deductions for charitable contributions by individuals who itemize their deductions. Taxpayers can use charitable contributions to deduct up to 100% of their AGI. For non-itemizers, the CARES Act provides an above-the-line deduction of up to $300 for cash contributions to charities in 2020.

Expanded Exclusion for Employer-Provided Educational Assistance 

The CARES Act permits employers to pay up to $5,250 annually to provide a studTent loan repayment benefit to employees on a tax-free basis. The $5,250 cap applies to both the new student loan repayment benefit as well as other educational assistance (for example, tuition, fees, books) provided by the employer under current law. The provision applies to any student loan payments made by an employer on behalf of an employee after the date of enactment and before January 1, 2021.

Health Care-Related Tax Provisions

The CARES Act provides that Health Savings Accounts and Archer Medical Savings Accounts can be used to pay for menstrual care products as eligible expenses. Additionally, the CARES Act states that such accounts can be used for the reimbursement of such expenses incurred after December 31, 2019.


These highlighted provisions are a CARES Act translation for individual taxpayers and create new planning opportunities. We carefully review and discuss how they can benefit our clients and families.  If you don’t have a trusted wealth manager helping you in this way, give Budros, Ruhlin & Roe a call.

John Schuman

Co-CEO and Chief Planning Officer

Your future self says, “Don’t panic, this is temporary.”

School closings, travel restrictions, grocery store supply issues and much more time spent at home have increased uncertainty, which sparked some dramatic market volatility. We’ve seen multiple days of negative market returns over the past few weeks and as much as we’d like to pinpoint when the volatility will subside, the reality is that no one has a crystal ball.

However, what we DO know is that this is not the first time we have seen volatility in the market, and it likely won’t be the last. It is critical to remember this is not the time to panic and we are here to help you weather the storm.

Resist the urge to mess with your 401(k)

We understand that when individuals and their families experience financial strain, it may be tempting to take funds out of your 401(k) to get by. This takes the focus off long-term planning and could be very detrimental to your retirement savings.  Our guidance is to evaluate all potential sources of cash before tapping into these funds.

One of the most powerful investment concepts is the power of compounding returns. Compounding returns simply means when the money in your account grows over time, future growth is based on not only the amount of money you originally contributed, but also includes past returns. When you leave your money invested, you give your investments the chance to compound their returns and grow exponentially over time. If you take money out of your account, the magic of compounding returns disappears.

One study shows that by taking a $5,000 loan early in your career you could reduce your retirement savings by 20%.1 When you’re years away from retirement, it may feel like you have plenty of time to make up your contributions at a later time, but this should be considered a last resort in the hierarchy of financial solutions.

Let history show you the course.

Many investors try to ‘time’ the market by trying to sell as prices fall and buy back at lower prices.  The reality is that if you sell investments in your 401(k) and move them to cash equivalent funds, you are likely locking in the loses that have already taken place in your account.

The key to a successful retirement account has and always will be to invest for the long-term and to stay the course. In other words, don’t make changes to your strategy when you get anxious. In the past 20 years, six of the best ten days in the market have occurred within two weeks of the ten worst days.2 It is easy to let emotions get the best of us when we see concerning headlines on a day-to-day basis but we need to remember why we save in a 401(k).

The savings in your 401(k) are intended to give you security during retirement, when you may have upwards of 20 years of expenses to cover after you enter this stage of life. Your future self will thank you for finding other resources to cover short-term expenses during market or health crises.

Your team at Budros, Ruhlin, & Roe is here as a resource during these trying times. Please reach out to Hannah Walls or Eric Shisler if we can be of assistance with questions relating to your 401(k).

Hannah Walls, CRPS®

Retirement Plan Services Specialist



2 JP Morgan Guide to Retirement, 2020

Leverage the Fed’s interest rate cut for your financial advantage

The Federal Reserve announced an emergency interest rate cut of one-half of a percentage point, reducing the U.S. federal funds’ rate to a range of   1-1.25 percent. While the primary goal of the rate cut was to stabilize the economy after fears surrounding the coronavirus, it has an impact on nearly everything. You’ll want to understand how to leverage the Fed’s interest rate cut for your financial advantage before making a change to mortgages, auto loans, student loans, and checking and savings accounts.


Mortgage interest rates are currently at or near all-time lows. This may beg the question, should I refinance my mortgage? While the thought of a lower interest rate may be attractive, there are other factors to consider before starting the process.

Start by comparing the interest rate spread between your current mortgage and current interest rates. Refinancing can be attractive when the interest rate spread is equal to or greater than one-half of a percentage point.

Next, evaluate the closing costs and how long it will take you to break even on your closing costs. Also decide how long you plan on living in your home. If you have an adjustable rate mortgage and you plan on living in your home longer than the initial fixed interest term, it is certainly worth looking into either refinancing into a new adjustable-rate mortgage that is better aligned or a fixed-rate mortgage that provides more flexibility. If you do not plan on living in your home long enough to breakeven on your closing costs, it probably does not make sense to refinance.

Auto Loans

Auto loans have fixed interest rates that are tied to Treasury yields, however, falling rates will likely not predict what dealers and auto lenders will offer. If you are in the market for a new or used car, consider securing bank financing before going to the dealership. Bank financing may allow you to better take advantage of currently low interest rates.

Student Loan Refinancing

Do you have high-interest student loans? Has your income or credit increased significantly since you last refinanced your student loans? If you answered yes to either of these questions, now may be a good time to consider refinancing your student loans.

Interest rates being at or near all-time lows could reduce your monthly payment amount and/or your remaining loan term. If you have federal student loans, keep in mind that refinancing with a private lender may forfeit benefits such as potential loan forgiveness, lower repayment plans, deferment and forbearance.

Checking and Savings

Lower interest rates typically mean that any balances in your checking or savings accounts will earn less interest. These accounts should not see much impact by lower interest rates, as they are currently yielding next to nothing. However, if you have a high balance in your checking or savings accounts, you should consider opening a high-yield, online savings account. While these accounts are also subject to lower interest rates, they continue to yield more than one percent to one and one-half percent more than a typical checking or savings account.

Use these tips when evaluating how to leverage the Fed’s interest rate cut for your financial advantage.  If you’re a high-income earner looking for additional guidance in debt reduction, investment management, tax and estate planning or asset allocation, the advisors at Budros, Ruhlin & Roe are here to help.  Our program called GROWwithBRR can address uncertainties about building your financial future.

Kevin Wuebker, CFP®

Senior Wealth Manager